Rwanda’s vision for growth remains unchanged

Rwanda’s mining industry may still be in its infancy years (by comparison with many other jurisdictions in Africa), but under the leadership of FRANCIS GATARE, CEO of the Rwanda Mines, Petroleum and Gas Board (RMB), there is great potential for growth. Having implemented the necessary measures to control COVID-19 in the country, the vision to establish a thriving mining sector remains a key priority, he tells LAURA CORNISH.

COVID-19 has infiltrated the entire globe, and even small, more  Rwanda has not remained untouched. 

“Our country took this pandemic extremely seriously and in addition to putting in place the necessary precautions to reduce new cases and control those already infected, we also took the view that understanding the virus was critical,” says Gatare.

Having listened to advice from professionals including the World Health Organisation and Rwanda’s ministry of health, the correct safety measures were put in place and the necessary communication shared with the population to educate and inform them – thereby empowering them to take charge in applying their own personal preventative measures.

“A behavioural-based change approach has delivered positive results in controlling this virus,” Gatare affirms.

Unfortunately, Rwanda’s mining industry was also impacted by the country’s lockdown rules – causing a decrease in production (necessitated by social distancing measures).

Since the ease of movement and resumption of economic activity, the sector has been quick to resume activity, albeit at lower volumes – something particularly difficult in a country which has yet to introduce much mechanisation, and therefore still relies heavily on labour and man power.

“Fluctuations in mineral prices have further resulted in reduced income and the consequence of being a 100% export orientated country has delayed the turnaround period since starting up again which mining companies rely on,” Gatare outlines.

“Nonetheless, our mining sector is resilient and thanks to their already stringent safety measures, were quick to safeguard themselves against the virus – which has to date meant that we have not reported a single COVID-19 positive case from the sector,” he highlights.

Rwanda’s mining vision still intact

RMB’s vision, although impacted by COVID-19, remains intact and the country is determined to build a strong and profitable mining industry that contributes on a larger scale towards Rwanda’s GDP, while aligning with the Africa Mining Vision (AMV).

The AMV was adopted by heads of state at the February 2009 AU summit following the October 2008 meeting of African ministers responsible for mineral resources development. It is Africa’s own response to tackling the paradox of great mineral wealth existing side by side with pervasive poverty.

The AMV advocates thinking outside the “mining box”. It is not just a question of improving mining regimes by making sure that tax revenues from mining are optimised and that the income is well spent – although that is clearly important, but rather it is a question of integrating mining into development policies at local, national and regional levels.

In other words, how mining can contribute better to local development by making sure workers and communities see real benefits from large-scale industrial mining and that their environment is protected.

It also means making sure that nations are able to negotiate contracts with mining multinationals that generate fair resource rents and stipulate local inputs for operations. And at regional level, it means integrating mining into industrial and trade policy.

“Fortunately, we have found the silver lining to the impact COVID-19 has had on our country, and through lessons learnt, our potential for faster growth is within our immediate reach,” Gatare notes.

“We have learnt that we need to increase the equipment mix into our operations so that we are less impacted by diseases and even human error. We have also identified the need for local and regional supply chains that reduce the waiting period for product imports such as explosives and spare parts.

“This needs to be further supported by in-country downstream and beneficiation opportunities and as such we are injecting capital investment into growing this part of the value chain – which we hope to achieve not only within our own country but at a regional level and in collaboration with regional partners.”

In order to the grow the industry, the RMB understands the primary need to encourage investment which it is doing by:

Streamlining the business environment in the country – removing administrative red tape and reducing administrative layers to have a single stop for supporting businesses.

The country has furthermore been streamlining administrative and policy legislation for the mining sector.

“We reviewed our Mining Code in 2018 to ensure its globally competitiveness. We understand that miners must get value for their investment while still complying with environmental and fiscal policies in the country,” Gatare points out.

The RMB has recently reviewed its Mining Code again to encourage investment in exploration and encourage downstream processing. Naturally this is extremely important to the junior mining sector which the country is primarily targeting.

Junior investment drawcards

“The junior mining sector is very important to Rwanda and the review of our Mining Code has incorporated changes that pertain particularly to this market segment,” Gatare notes.

Rwanda has granted any junior mining company (both in exploration and development) a 10-year period loss carry over – in other words a decade to write off any losses incurred – necessitated by the fact that this industry segment does not often generate profits in this period. It also offers capital gains tax.

“We have also invested in technical institutions to train operators so that junior miners don’t have to source skilled labour from outside of the country and last but not least we have worked in conjunction with our local banking sector to offer an exploration support facility to provide incentives to invest their own cash and work with local financing institutions to get additional financing. This will help investors find Rwanda attractive,” Gatare emphasises.

Staying relevant

The RMB was honoured to host the inaugural Africa Mining Forum event in 2019 – which brought companies, government representatives and international financiers together to unpack the mining opportunities in Rwanda.

“It was an extremely successful event and opened our eyes to the potential development we can realise in our country – which starts with collaboration,” the CEO states.

While COVID-19 has prevented the country from hosting its second event, it has been eager to embrace the new digital world to continue leveraging off of opportunities to connect and collaborate.

As such, the board is co-hosting and sponsoring the 2020 Africa Mining Forum digital event taking place from 16 – 20 November.

“Adaption is key to the survival of anything – including businesses. Technology gives us that opportunity to adapt but we must use it effectively to benefit from it. Through the digital sphere we also have new opportunities – a chance to connect with more companies and individuals, at a significantly reduced cost – over the entire year and not just for a few days.”

Gatare is excited and looking forward to the digital event and highlights the three key messages he will be sharing with the audience:

  1. COVID 19 continues to be a problem around the world. “I want to encourage our partners to take care of themselves. This virus will end and there are highly skilled scientists who will find a vaccine.”
  2. Until that happens, live must go on and businesses must continue to flourish despite the challenges. “Technology plays an important role in our lives and Rwanda has an abundance of technology metals – tin, tungsten and tantalite as well as lithium and speciality minerals like rare earths – all important for the emerging technology boom emerging. We want Rwanda to be a source for these materials.”
  3. While the pandemic continues, Rwanda has relaxed its travel restrictions. A negative COVID-19 test is the only requirement once in the country.

This article first appeared on www.miningreview.com