IFC to invest in local mining industry

More than 30,000 jobs are said to have been created by the mining sector last year. Currently, the workforce is estimated at 50,000 people, 70 percent of whom are employed in small scale mining, which is largely still artisan. The International Finance Corporation (IFC), the private sector arm of the World Bank Group is set to invest in Rwanda’s mining industry. According to Ignance Bacyaha, IFC’s Senior Operations Manager, the corporation, this year conducted a study on the mining industry in Rwanda and that the study revealed needs for investment and advisory services in the sector. The IFC fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing capital in the international financial markets, and providing advisory services to businesses and governments. It helps companies and financial institutions in emerging markets to create jobs, generate tax revenues, improve corporate governance and environmental performance, and contribute to their local communities. Bacyaha said, “Over the next months our colleagues will visit Rwanda to explore further opportunities for investment and subsequent linkages programs.” He was speaking during the cerebration of the ‘International Mining Day’ at Kigali Serena Hotel on Tuesday. The cerebration was organised under the theme “strengthening the mining sector for economic growth and job creation”. Without mentioning the size of the investment that could be committed, Bacyaha said IFC is considering making both equity and debt investments into the sector. He added that through the Rwanda Entrepreneurship Development Program (REDP), IFC’s skills development program that aims to strengthen entrepreneurship and small enterprise development in the country, players in the mining sector will be equipped with necessary industry skills and knowledge. This will not be the first time IFC is investing in mining in Sub-Saharan Africa. Last year it invested a record of $150m (Rwf88.98b) with $50m (Rwf27.7b) options for equity stake and $100m (Rwf55.3b) as a standby loan in South Africa’s Lonmin SA, the world’s third platinum producer. IFC’s intentions of investing into Rwanda’s mining sector comes when the country’s minerals industry is on a steady growth, considered as a potential export contributor and job creator. Sector performance Last year, minerals receipts amounted $71.5m (Rwf39.5b), mainly driven by Cassiterite which fetched $31.9m (Rwf17.6b), Coltan $19.2m (Rwf10.6b) and Wolfram $19.4m , representing growths of 103.7 percent, 101.5 percent and 72.1 percent respectively. More than 30,000 jobs are said to have been created in the year 2007. Currently, the workforce in the mining sector is estimated to employ 50,000 people, with about 35,000 of them employed in a largely artisan, small scale industry. According to the Ministry of Land, Mines and Natural Resources, as of October this year, foreign export earnings from mining were $89m (Rwf48.7b) and the National Bank of Rwanda (NBR) has estimated more than $100m (Rwf55.3b) from the sector by the end of the year. Stakeholders in the minerals industry have also estimated cumulative receipts of $387m (Rwf76.3b) over the next three years for public sector investments worth $14m. Howeverv the sector is said to be facing some challenges which could undermine its perfomance and slow investment inflows. Sekagilimana Célestin head of Foreign Exchange Operations and Balance of Payment Department in National Bank of Rwanda (NBR) said that some of the challenges include high lending interest rate in the local financial market, non availability of mining concessions, and high rate of government taxes and lack of skills in mining sector. He said that mineral products, price volatility in the international market, lack of mineral deposits knowledge and high cost of power, were also big hindrances to the development of the sector. “Policy makers should address those constraints to boost the mining sector productivity in close collaboration with private sector,” Sekagilimana added. But despite such obstacles he said that the biggest share of the mining sector is distributed in the national economy up to 68 percent of the total mineral export revenues. The mining sector’s share of the Gross Domestic Product (GDP) is also estimated at 10 percent. Ends

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IFC to invest in local mining industry