Some win, some lose out in Rwanda mine licensing

Tuesday November 6 2018

 Workers filter minerals at a mine in Rwanda. A

 Workers filter minerals at a mine in Rwanda. A new law bans artisanal mining in the country. PHOTO | FILE 

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Rwandan has renewed 27 licences for mining companies in an exercise that will also see some lose their contracts.

Rwanda’s stringent new controls which are similar to Tanzania’s, are seen to rid the mining sector of artisanal miners and reward investments that spur growth. The goal is to make the sector the country’s predominant foreign exchange earner.

Rwanda seeks to collect $1.5 billion from mineral exports by 2024, over four times what it collected in 2017, and has reviewed its laws and regulations in the sector, and set up a new institution that is focused on mining.

Of the licencees, three are large scale miners, 15 medium scale, three have exploration licences and six have industrial quarrying licences.

Due to its stringent mining measures, Rwanda faces an international arbitration suit filed by two American firms contesting the cancellation of their mining concession.

Environmental damage

The suit was filed in June by Bay View Group and the Spalena Company at the International Centre for Settlement of Investment Disputes, which is funded by the World Bank.

Bay View Group’s mining licence was cancelled in 2016 after eight years of operation, after the government accused it of investing less than expected and for indulging in illegal mining activities that damaged the environment.

Tanzania has overhauled its mining sector regulations to ensure that exploitation of natural resources is as beneficial to the country as it is to corporations dealing in minerals.

In July, the Tanzanian government cancelled 1,000 mining licences after the holders failed to comply with mining regulations.

Kenyan miners early last month also called for a review of the country’s 2016 Mining Act, saying that the current law is unfavourable to investment

Mining contributes four per cent to Tanzania’s GDP; The country is Africa’s fourth largest producer of gold.