RMB’s Gatare on how the mining sector can drive Rwanda’s recovery

Rwanda's mining sector has emerged as a key player in driving the country's economic recovery, particularly after the tourism industry took a hit due to the global pandemic. In an exclusive interview with CNBC Africa, Francis Gatare, the CEO of Rwanda Mines, Gas & Petroleum Board, provided insights into the sector's performance and the government's strategies to stimulate growth and attract investments. The mining and quarry sector in Rwanda employs over 80,000 people and serves as a crucial source of export revenue, contributing significantly to the domestic construction industry. Despite the challenges posed by the COVID-19 pandemic in 2020, the sector exceeded expectations with international revenue earnings reaching $730 million. This was attributed to the sector's agility in adapting to market fluctuations and the rebound of commodity prices in the second half of the year. Gatare highlighted the resilience of small and medium operations, which were able to meet international market demand when larger operations faced closures. The sector's traditional focus on the '3T's – Tin, Tantalum, and Tungsten – proved beneficial in 2020, with Tin prices experiencing a significant increase of over 25%. While Tantalum and Tungsten prices fluctuated, they remained stable compared to pre-pandemic levels, ensuring continued revenue generation for the sector. Recognizing the importance of diversification, Rwanda is exploring new minerals such as gold, gemstones, lithium, and battery minerals to enhance its mining portfolio. The surge in gold demand in 2020, with prices soaring by more than 30%, drove increased investments in gold mining and refineries, further boosting the sector's growth. The government's reforms in the mining sector have aimed at attracting new investments, modernizing operations, and promoting value addition within the country. These reforms include streamlined licensing processes, monetary incentives for equipment investment, and tax incentives to encourage exploration activities. Gatare expressed optimism about the positive impact of these reforms, despite the challenges of 2020, and anticipated a growth in fresh investments in Rwanda's mining sector in 2021. To incentivize exploration, the government is providing fiscal incentives and guarantees for exploration companies, aiming to reduce investment risks and enhance the sector's growth prospects. Gatare elaborated on the importance of balancing incentives and risk reduction strategies to attract exploration investments in Rwanda's promising mineral landscape. Addressing the issue of minimum wage in the mining sector, Gatare acknowledged the complexity of the topic and emphasized the need for fair compensation for mining workers. While advocating for a minimum income level for miners, the government is encouraging a hybrid employment model that combines salaried and seasonal workers to ensure equitable pay for all workers. Companies are urged to provide fair compensation for mined minerals and transparent deductions for inputs to enhance workers' income and satisfaction. Gatare underscored the ongoing efforts to improve labor conditions and ensure a socially responsible mining sector that benefits both investors and workers. The dialogue around minimum wages for miners reflects Rwanda's commitment to fostering a sustainable and inclusive mining industry.