Mining Corner, issue 1, May 2015

THE MINING CORNER

Newsletter

Issue 1 May 2015

ALL ABOUT DEVELOPMENT STORIES IN MINING SECTOR

Historically, the Mining sector

in Rwanda has played a key

role in contribution to the

country’s macroeconomic

stability.

Mining sector currently

contributes significantly to the

exports from Rwanda. It is

ranked the second highest

foreign exchange earner after

tourism, and the biggest export

earner.

Realizing the need for

exchange of information among

all key stakeholders as an

enabling factor for the

development of this industry,

the Department of Geology and

Mines of the Rwanda Natural

Resources Authority in the

Ministry of Natural Resources

introduces the Newsletter

which will be providing latest

information and various

untapped opportunities in the

mining and quarrying sector.

EDITORIAL NOTE

Mining corner March 2015

INSIDE THIS ISSUE 1

BACKGROUND OF MINING SECTOR......................................

TRANSPARENCY IN RWANDA”S MINING SECTOR.............

MAJOR ACHIEVEMENTS...........................................................

CELEBRATION ON INTERNATIONAL MINING DAY............

RWANDA HOSTED EAC 7TH PETROLEUM SUMMIT..........

Produced by communication unit www.minirena.gov.rw

MINIRENA

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Table 1: MINERAL EXPORTS, YEAR 2014 (in Kg)

Source:BNR,RNRA; December 2014 statistics The total volume exported from January to December 2014, is 16,357 tons of Cassiterite, Coltan and Wolframite and other kind of minerals like Iron Ore

Table 2: EXPORTS VALUE, YEAR 2014 (IN USD)

Table 2: EXPORTS VALUE, YEAR 2014 (IN USD) Source: BNR,RNRA;December 2014 statistics The total income from exports from Jan. to December 2014 is $210.6Million .

MINERALS

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec Total

cassiterite 510,700 463,804 461,223 483,771 614,022 576,490 383,585 724,946 456,812 512,640 457,149 284,798 5,929,940

coltan 106,145 137,060 224,940 116,297 184,913 211,885 252,391 254,736 184,013 258,661 201,721 169,758 2,302,520

wolframite

237,432 221,373 194,877 36,590 154,312 286,416 162,521 116,007 288,779 185,176 119,707 162,978 2,166,168

Other minerals

0 0 15 140,010 2,240,014 1,316,017 1,820,006

316,735 112,742 22 26 13,263 5,958,850

General Total

854,277 822,237 881,055 776,668 3,193,261 2,390,808 2,618,503

1,412,424 1,042,346 956,499 778,603 630,797 16,357,478

MINERALS Jan Feb Mar Apr May June July Aug Sept Oct Nov Dec Total

cassiterite 5,942,653

5,929,453 5,668,580

6,117,163 7,937,128 7,191,738 4,569,099

8,797,033 5,299,508 6,113,002 4,928,385

3,139,247 71,632,989

coltan 3,874,304

4,687,174 8,949,709

5,058,358 8,185,701 10,094,765

12,084,187

12,832,963 9,212,943 12,426,568

9,227,117

8,146,544 104,780,333

wolframite

3,014,455

2,836,504 2,598,762

412,569 1,705,255 3,249,694 1,907,341

1,309,217 3,617,757 2,227,610 1,339,450

1,937,686 26,156,300

Other minerals

0 0 601,761 421,411 718,629 765,014 321,277 202,625 451,177 800,462 878,874 2,949,464 8,110,694

General Total

12,831,412

13,453,131

17,818,812

12,009,501

18,546,713

21,301,211

18,881,904

23,141,838

18,581,385

21,567,642

16,373,826

16,172,941

210,680,316

Rwanda’s mining sector has demonstrated the potential for meaningful contribution to the country’s economy. Rwanda’s mineral exports have considerably increased over the past few years with the sector emerging as a major foreign exchange earner with much higher prospects. Today Rwanda ranks eleventh in the world for tin which translates into 1-5 per cent of global tin production. Rwanda is the first country within the East African region that is implementing the traceability and tagging of minerals. The journey has not been easy. Over the course of years, policies have been put in place to provide mining a room to boost and propel the country’s economy.

The EDPRSII targets to earn 400M USD in 2017-2018 from the mining sector. This is achievable due to the fact that a variety of inputs are emerging to support the mining sector. Most importantly, investors have shown interest in the sector and bidding on a considerable scale. Since the new law was gazetted, much progress has been witnessed and emphasis has been put in to facilitate mining practitioners to get a long term license which was not the case with the previous law. Furthermore, we have found that quarries also carry big investment opportunities as they are needed in construction materials. It is in this regard that we are enforcing investment in quarries in order to get as much potentiality in primary construction materials such as tiles, glasses, just to mention but a few. The Government’s strategy to develop the mining sector will raise revenue and increase the sector’s contribution to the economy. The Government has attracted several investors including eight major foreign companies exploiting for mineral deposits. The Mining sector is already among the top two foreign exchange earners and the government of Rwanda is devoted to processing the country’s raw materials wealth to add value. The results from the work being done regarding mining and quarry sector, provide hope that the targeted 400M USD is not just feasible but achievable.

FOREWORD BY THE MINISTER OF STATE FORMINING

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Geology and Mines Department/Rwanda Natural Resource Authority

The growth of the mining Sector has over the last decade been very remarkable. The export earnings in 2006 were USD 40M and this figure had grown to USD 226M in 2013. In the last several years the sector has become the largest export earner and the second largest foreign exchange earner after tourism. Economic Development and Poverty Reduction Strategy (EDPRSII) has a target of the sector growing by 300% in five years from 2012. This growth is considered achievable because most of the bottlenecks to optimum production are in the areas of (i) improving the regulatory framework (ii) introducing efficiency in production and (iii) introducing effective monitoring and evaluation, all of which are achievable in a relatively short period of time as compared to finding and developing new deposits. Mining is already taking place at more than 600 mine sites, many of them being worked by artisans whose capacity is being upgraded through formalization and building partnerships.

It is important to note that some forward looking decisions are being made to maximize efficiency in the present circumstances. Efficient and modern methods of production are already being promoted and before long they will be the minimum requirement for a company to keep its mining license. In building efficiency in the minerals licenses (rights) management, a national minerals license data bank, more commonly known as a mining cadastre online portal has been developed. This covers all the transactions that take place during the life cycle of the mining title from the initial application, through the granting of the license, payment of annual fees, tracking of the necessary annual reports, reassignment or lapsing, and final relinquishment of the title. It also allows the collection of annual statistical data, total fees collected and alerts where annual reports or fees have not been received.

However, we are learning that the involvement of all stakeholders in (i) providing them with information on the performance of the sector and in (ii) receiving support services in the sector, where applicable, will be very essential to help in realizing the projected quick and sustainable growth in production. For example we are putting additional focus on improving management and efficiency through increasing effective coordination with different government entities (in order to overcome regulatory, capacity, responsibility and resource gaps) and other stakeholders. The objective of this newsletter is to provide development stories and various information from the sector, share with our stakeholders, partners and general public. We hope the publication will be an interactive forum that would enable us

capture variety of comments and questions.

Dr. Michael Biryabarema Deputy Director General, RNRA/GMD/

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The key minerals currently being mined and traded in Rwanda are Cassiterite (tin), Coltan (niobo-tantalite), Wolframite, amblygonite, and some gemstones like tourmaline and Amethyst. There is a strong focus on increasing domestic production and revenue from mining. Since 2007, the sector has been transformed from a publicly-run sector into a private industry. The current vision for the mining sector is “to ensure the optimal and sustainable utilization of the mineral resources”. In Vision 2020, Rwanda’s Minerals Industry is targeted to contribute both to Rwanda’s economic growth in general and the trade balance in particular, as well ascontribute to off-farm employment. In the EDPRSI, there were two targets set out by the government for the sector: (i) Increase mineral exports by 250% from $US 38 million in 2005 to $US 106 million by 2012 and (ii) Increase employment in the sector from 25,000 in 2005 to 37,000 in 2012 of which 20-30% should be women. The Sector surpassed its EDPRSI targets in export earnings: Mineral exports for 2011 totaled USD 164,656,786, which comprised 158,800,000 from domestic production. Currently, there are up to 700 licensed mining companies and cooperatives with mineral licenses either carrying out exploration or mining in Rwanda .

Rwanda is underlain with the system of rock types known in the scientific circles as the Kibaran belt rocks. These extend from Tanzania, Southwestern Uganda, through Rwanda, Burundi, and the Democratic Republic of Congo (DRC) up to Angola. This belt is well known by geologists to be rich in minerals especially tin, tungsten, tantalum, niobium, lithium, nickel, beryl, uranium, thorium phosphorus and others. Mining activities in Rwanda started in the early 1930’s, developed by Belgian companies such as MINETAIN, GEORWANDA, SOMUKI and COREM,MARSHALL, STINGLHAMBERT, GREENS, CARDINAEL, DE BORCHGRAVE etc. In 1973 a new public mining company SOMIRWA (Société Minière du Rwanda) was created, grouping together all existing private mining companies in trying to strengthen the industry. The Government of Rwanda held minority shares of 49%. It was declared bankrupt in 1985. Later in 1988, the new cooperative, COOPIMAR (Cooperative Industrielle Minière Artisanale) was formed to organize and assist small mining artisans to develop and increase production. By 1989, REDEMI (Régie d’Exploitation et de Développement des Mines) was created to maintain the existing mines till new investors were found. Since 1999, the mineral export kept a steady growth upward trend over the course of years. The average growth of export value over that period is at least 10% per year. In the last five years, mineral exports recorded impressive growth: USD 96.4M (2010), USD 158.4M (2011), USD 136.1M (2012), 226 M (2013) and 210.6 M (2014).

Evolution of minerals export value since 1995

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Cumulative growth of mining licenses (2007-

2014)

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2007 2008 2009 2010 2011 2012 2013 2014

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BACKGROUND OF THE MINING SECTOR

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Over the last 5 years, Government has worked to reform the sector and has made several progressive steps to maximize the sectors potential and ensure that mining is able to propel economic growth. Major successes include: (1) Developing a vision, legal and institutional framework and delivery plan for the sector (there is a new policy, a new mining law, and a strategic plan), (2) Increase in production and export earnings; (3) Enhanced measures to implement an internationally recognized mineral traceability system, which started in 2011. Currently Rwandan minerals are accepted in many markets in the world; (4) Some measures in enhancing geological knowledge to ascertain Rwanda’s mineral potential are in place notably through (i)government funded exploration projects and (ii) privately funded exploration

programs (5) Strategic Capacity Building Initiative(SCBI) currently being implemented in the sector etc.

Mining Cadastre and licensing unit

Rwanda is implementing the Flexi Cadastre System, which

assists in the reception and analysis of mineral licenses

applications, granting, and management using the flexi

cadastre system. In details, the system is endowed with

capacity of tracking free areas which are potential for

investors; who then can apply for a specified free location

for mining activities. The system has started working and

can be accessed at http://portals.flexicadastre.com/rwanda/

Regulation and inspection unit ________________________________________

Regulation and inspection unit regulates mining

companies and cooperatives on mining best practices

including safety, security and environmental aspects at

all mine sites in Rwanda.

Inspectors regularly conduct inspections to monitor

mining sites according to Rwanda and ICGLR standards,

then after inspection, mining sites are given advices on

best practices, and when found working against

regulations and laws, they are stopped from working for

a certain period to assess and improve activities as

indicated in the mining law no13 0f 20 May 2014, article

25 determining the suspension and cancellation of a

mineral license.

Mining traceability and certification

mechanisms

Picture: Certification officer certifying minerals before shipment Traceability comes at the stage of ensuring transparency in minerals produced in Rwanda in partnership with other stakeholders, including ICGLR, OECD through tagging minerals from the mine sites to the export

level….Continuation on the last page

TRANSPARENCY IN RWANDAN MINING

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Map showing the location of mineral licenses

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Honorable Minister of State in charge of Mining, Evode Imena

On the 4th December 2014, the Ministry of Natural Resources celebrated the International Mining Day, under the theme “Professional mining as a pillar to growth and sustainable development”. At the occasion, miners exulted the progress made by the mining sector and its contribution to poverty alleviation, economic growth and reduction of rural unemployment. The President of Rwanda Mining Association, Mr. Jean Malic KALIMA, emphasized the importance of Mining and pointed out that it was an occasion to celebrate their achievements as they take stock of the challenges and opportunities in the mining sector. Mr. Malik enumerated some of the challenges which include access to banks loans, lack of skills and training among others. He urged banks to offer loans to the mining sector and not view the sector as a risky business. The Minister of Natural Resources, Dr.Vincent Biruta, who was the Guest of Honor said that the sector is currently experiencing growth and that the Government of Rwanda is committing resources both human and financial to realize its full potential.

“It is also important to note that the Rwandan Government together with the private sector committed all the necessary resources in this regard. The reason for this is to quickly overcome the challenges posed by the market requirement of the verification of minerals trading and tracking through the initiation and the comprehensive implementation of the tagging system,” the Minister quoted. He emphasized the need for environmental protection at the mining sites. “The balance between resources extraction maximization and the protection of the environment will require synergies from all stakeholders. This wi ll mean using the right methodologies and technologies in mining and processing and having in place appropriate standards to guide safe, secure, environment friendly and profitable extraction.” At this event, companies with best practices and well performing student from the Department of Mines at IPRC were given awards. Jean Malik Kalima, the owner of Wolfram and Mineral Processing (WMP Company Gifurwe) was given the Miner of the Year award.

Rwanda celebrated the International Mining

Day

Photo of panellists during the 2015 International Mining Day, held at Serena Hotel In the picture from right to left: Carolyn Turk/World Bank Rwanda Country Manager, Dr.Rose MUKANKOMEJE/DG

REMA, Dr.Michael BIRYABAREMA/RNRA-DDG for Mining and Mahmoud Salem/RAP Rwanda Managing Director

At the event, companies with best practices and best performing student from the Department of Mines at IPRC were given awards

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Rwanda hosted the 7th East African Petroleum

Conference and Exhibition 2015

The Right Honorable Prime Minister, Anastate Murekezi speaking at the EAPCE15

From 4th-6th March 2015, Rwanda hosted a

regional petroleum conference, the 7th East African Petroleum Conference and Exhibition 2015(EAPCE15). The conference brought together over 600 participants from international oil companies, oil industry service companies, government institutions, academic institutions, international geo-scientific journals representatives, non-oil and gas

institutions and the media.

While officially opening the conference, the Prime Minister of the Republic of Rwanda, Rt Honorable Anastase Murekezi said, “The East African Community is giving very high priority to the development of infrastructure and energy and in the petroleum sector, plans are in place to link all the EAC partner States with oil products pipeline which will facilitate access to the oil resources discovered in the region as well as imports from the international markets.”The Prime Minister reiterated, “Prequalification of contractors for the construction of Eldoret-Kampala-Kigali pipeline has been completed. Preparation work for extending the project to Bujumbura, are also set to commence soon following the securing of funding for feasibility studies for the Kigali-Bujumbura section.” “This oil pipeline network will be linked to the United Republic of Tanzania from a hub in Mbarara (Uganda) with a pipeline to Mwanza, Isaka and finally to Dar es Salaam. The infrastructure and energy projects that are being implementing are estimated to cost $100 billion over the next 10 years as capital costs and $500 million in the next three to four years in project preparation costs covering required studies, project packaging and promotions, and transaction advisory costs.”

Right Honorable Prime Minister of the Republic of Rwanda, Anastase MUREKEZI posing for a group photo with ministers from the East African Community

Group photo takenat the 7th

East African Petroleum

Conference and Exhibition 2015,

held in Kigali

Rwanda.

The EAC is committed to the provision of sufficient, reliable and affordable electricity. “This is why Rwanda is developing methane gas-to-power projects, Uganda is developing major hydro power projects, Kenya is developing geothermal and Tanzania is developing natural gas to power projects,” the Premier said. Murekezi said, “We are then linking all the Partner States with high voltage transmission lines and developing the necessary framework for power exchange and trade amongst all Partner States.” The conference is held every two years. Since it started back in 2003, impressive achievements have been reported in every subsequent conference. “It also helps us to promote investment in the oil and gas sector by demonstrating to the world the potential that lies within the region and sharing information on the status of development of the sector in each Partner State, thereby harnessing Petroleum Potential and Investment opportunities in the East African Region,” the premier added as he concluded his opening remarks.

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Mining traceability and certification mechanisms

At the export level, Certification unit certifies shipments of minerals (3Ts) to ensure that they are conflict free according to International Conference for Great Lakes Region (ICGLR) standards and ascertains the chain of custody and due diligence according to OECD- Due Diligence Guidance, to ensure that the origin of minerals is known and credible. Since it started issuing certificate in 2003 in Rwanda, more than 50 ICGLR certificates have been issued to three companies. Because of the good progress in the development of mineral certification procedures in Rwanda, the conflict free smelter (CFS) auditors have allowed Karuruma tin smelter to start operations. Soon the country should be able to export tin ingots.

ICGLR certificate issued before shipment

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