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Rwanda to expedite enactment of new minerals law

8th February 2013

By: John Muchira

Creamer Media Correspondent

  

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Rwanda has announced it will expedite the enactment of a new mining law aimed at making the sector a major contributor to economic development.

Currently, the Rwandan economy depends heavily on agriculture and tourism.

“This law forms a solid basis for the regulation of the mining industry because we want it to play a major role in economic growth,” says of Department of Geology and Mines director- general Michael Biryabarema.

The Rwanda government intends to have the new law, now at the draft stage, passed by Parliament before June.

The new law is aimed at strengthening the legal, regulatory and institutional environ- ment, improving knowledge and skills, raising productivity and establishing new mines and increasing value addition.

The mining sector in East Africa’s fastest-expanding eco- nomy is in a state of transition from a publicly run to a private industry focusing on exports.

But some of the new proposals are raising concerns among min- ing companies. In particular, investors are calling for the amendment of a proposal that requires them to spend a stipu- lated minimum amount on exploration.

According to the draft law, a company will only be granted an exploration licence after it has agreed with government on the minimum amount of money it will inject into exploration.

While government contends this proposal is aimed at ensuring there will be no “idle licences”, mining companies argue this will discourage new investments in the industry.

Since 2004, when the Rwanda government embarked on the privatisation of mines, the sector’s contribution to the economy has been expanding steadily to become a major foreign exchange earner.

Statistics from the Rwanda Natural Resources Authority show that Rwanda raked in $164-million in 2011 from the sector, compared with $94-million in 2010.

Rwanda’s traditional minerals include tin, coltan, wolfram and cassiterite.

The tiny East African nation is the eighth-leading producer of unmelted tin, accounting for 1.5% of global production. The country produces 8 000 t/y to 9 000 t/y.

Rwanda believes that the new law will raise investment in the sector to $500-million and create 100 000 jobs by 2020, in addition to increasing exports to $240-million a year over the same period.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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