Rwanda: Fast Mining Development Backs Steady GDP Growth

modern_mining in Rwanda

VENTURES AFRICA – Rwanda’s hearty GDP growth of 8.6 percent last year owes much to growth of almost 60 percent in the country’s export of minerals, driven by entry to world markets, soaring commodity prices and galloping mining development.

Last year was a year of bounce-back for Rwandan mining, after the country’s mineral exports fell by some 11 percent in 2010, only to rise by a full 58 percent in 2011 – as the country broke into the international markets.

Mineral export earnings of $164.7m last year were up from just $96.4m the year before following the government’s moves to make the mineral business comply with international standards, through a code of practice and mineral certification programme.

This meant Rwanda’s minerals could be traded on the international markets, as it brought the local industry in line with the International Conference on the Great Lakes Region (ICGLR) Mineral Certification Initiative.

The country also discovered 21 new mineral-rich sites, contributing to making the country’s mining sector an attractive prospect for the type of foreign investment that can help Rwandan mining boom even further. Director General for Mines and Geology at the Ministry of Natural Resources Michael Biryabarema says the discoveries have “boosted the industry further and made it lucrative.”

Foreign companies are not wasting time in seeking to take advantage of the opportunities. “The mineral sector gets competitive every year due to the entry of new players, particularly new investors, which has facilitated growth,” said Biryabarema. More than 140 companies and cooperatives are registered to mine in Rwanda across some 400 mines.

The country’s mineral wealth includes cassiterite, coltan, wolframite and gold, vital for the manufacture of mobile handsets and other electronic equipment. Over 6.2 million kilogrammes were exported last year. High prices have played their part in Rwanda’s speedy growth. Wolframite is currently selling for $330 per ton. Biryabarema attributes the sector’s mercurial growth in part to the favourable prices.

Yet government investment has also played its part in bringing the sector up to international standards and providing a strong source of capital to Rwanda. Aside from introducing the international standard, the ministry has launched various other initiatives in order to boost the sector and protect the environment. The industry has been streamlined through new mining laws over the last three years and Rwanda has become the first country in the region to introduce a mineral traceability system. Meetings between government and stakeholders resulted in agreement to work in association.

In spite of the discovery of the new mineral-rich sites, there are no plans to rest on laurels. Further research projects are already underway, with every new mining opportunity discovered an extra enticement to foreign investors. Rwanda National Resources Authority (RNRA) Director of Regulations Francis Kayumba says the development of proper frameworks and a delivery plan have created a very favourable environment for foreign firms looking to mine in Rwanda, both independently and through investments in local firms.