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Rwanda’s mining moves

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Pegmatite mineralisation across the region is prospective for lithium, tin and a range of other minerals. Image credit: Leon Louw for WhyAfrica

Rwanda’s mining moves

Rwanda hosts several minerals that will be in high demand in the future as the world moves towards a green energy transition, but allegations about the illegal export of minerals, continue to sour relationships between Rwanda and its neighbour the Democratic Republic of the Congo (DRC).

By Leon Louw owner of WhyAfrica and editor of the magazine WhyAfrica

Several early-stage mineral exploration companies are currently doing preliminary work in Rwanda. They are all positive that initial results indicate the presence of economically viable lithium and tin and justifies further drilling.

Pegmatite mineralisation especially in the Gatumba area, 50km west of Kigali looks prospective for lithium, tin, and a range of other minerals.

Demand for lithium is currently at an all-time high and the market is heading for a supply deficit. Dubbed as “white gold” for electric vehicles (EVs), lithium plays a critical role in the cathodes of all types of lithium-ion batteries that power EVs, although it is also used in the batteries of laptops and cell phones, as well as in the glass and ceramics industry.

In 2018, the Rwandan government called on investors to invest in exploration and processing of lithium in a bid to brand the country as a destination for mining investment.

A probable producer of lithium (Rwanda’s mining moves)

According to Luke Rogers, COO of London listed Aterian, the company is positive about the potential presence of lithium in Rwanda and is confident that the country will be a producer of lithium concentrate in the next ten years.

“Areas with lithium potential in Rwanda include Rwamagana, Huye, and Muhanga,” says Rogers. “Currently, there are companies in Rwanda that produce amblygonite, a mineral that contains lithium. However, amblygonite is not highly regarded on the international market, and its production is relatively small.”

The more exciting story, according to Rogers, is the potential of finding better lithium-containing minerals like Spodumene and Lepidolite, which can be mined in abundance and are easier to process.

A key goal in Aterian’s strategy in Rwanda, is to operate in partnership with artisanal miners who have been working in the area for decades.

Rogers says that partnership discussions have begun with parties to improve artisanal mining productivity through mechanisation, and to provide material to Aterian’s metal trading business.

Aterian has engaged an online stakeholder management tool called 1Villager.com to support Whistleblower management, social license reporting, and stakeholder engagement, as part of the ongoing obligation by the company to ethical supply chain management as a member of the International Tin Association’s Supply Chain Initiative (ITSCI) Programme for responsible mineral supply chain compliance.

Aterian’s wholly owned Rwandan subsidiary, Eastinco is currently engaged in an initial three partnerships with local entities to explore and develop tantalum, niobium, tin, and lithium opportunities.

Eastinco holds a Trading Licence, which will also facilitate the trading of metal concentrates within the region. Cassiterite occurrences (prospective for tin) are abundant in Rwanda, Burundi and in the DRC.

The importance of cassiterite (Rwanda’s mining moves)

The outlook for tin is extremely positive as it is used in solder for new technology, electric vehicles, and renewable energy. Exploration for and the exploitation of cassiterite in Rwanda started in the 1930s. During the early decades, production came from eluvial and alluvial workings, but mining progressively went underground on the quartz veins.

According to Dewaele et al. (2010), cumulative production from different deposits in the Rutongo was about 30,000 tonnes of cassiterite between 1931 and 1982, with an average annual export between 2009 and 2013 of 4,955 tonnes, while Melcher et al. (2014) suggests that between 1958 and 2005, about 60,000 tonnes of cassiterite and 5,000 tonnes of coltan were produced.

Historically, tin has been mined extensively in both Rwanda and in the east of the DRC, as has gold (Au), tungsten or wolfram (W), tantalum (Ta) and coltan (columbite-tantalite).

Unfortunately, these natural resources are also labelled as conflict minerals and is said to be sustaining the current conflict in the Great Lakes Region and especially in the eastern parts of the DRC, where Rwanda has been accused of playing a prominent role.

Reports about the “smuggling” of minerals between the porous borders of Rwanda, DRC, Burundi, Uganda and Tanzania persists and suggestions that Rwanda’s expansionists tendencies in the Great Lakes region is fuelling a regional conflict continues to be a talking point.

Unfounded accusations persist (Rwanda’s mining moves)

Accusations that Rwanda is exporting gold, coltan, tin, tungsten and tantalum illegally obtained in the Democratic Republic of the Congo (DRC), continue to sour relationships between the two neighbours.

Earlier this year, Nicolas Kazadi, the DRC’s finance minister, told delegates at the Financial Times’ Commodities Global Summit in Luasanne, Switzerland that the DRC is losing almost USD1-billion a year in minerals that were being illegally smuggled into Rwanda. Kizadi said he had sufficient evidence to prove that Rwanda is benefitting from the DRC’s natural resources and called for international sanctions against the Kigali government.

Kinshasha has long accused Rwanda of backing the M23 rebels in the eastern parts of the DRC to strengthen its position in the region and to plunder the DRCs natural resource.

Tension between the two countries flared up again when M23 resumed fighting in early 2021. The armed group got close to occupying Goma, the capital city of the North Kivu province of the DRC, in November last year.

The rich mineral resources of the DRC have historically been mined by small scale artisanal miners, who flock to the region from all corners of the African continent.

DRC President Felix Tshisekedi has accused Rwanda on several occasions of plundering the DRC’s mineral resources in the east and exporting it as Rwandan minerals.

Rwandan President Paul Kagame and his administration have denied all accusations. “Despite the rumours, allegations and reports, there is no hard evidence that directly links Rwanda’s government with illegal trade in minerals,” says Dr Nicolaas Steenkamp, a mining consultant that has worked in the region.

“Most allegations cannot be fully substantiated due to monitors not able to enter the conflict zones. However, there is a huge gap between the ore mined in Rwanda and the volumes that are being exported, and that leaves some questions unanswered.

Economist do question the quality of reporting not only in Rwanda, but also in the rest of Africa. The refineries and smelters in Rwanda and Uganda seem to be marred in controversy.

Traceability processes with limited success (Rwanda’s mining moves)

To make it harder for armed groups to benefit from trading gold, tin, tantalum and tungsten, the US and European Union have branded them as conflict minerals.

But despite several international traceability and transparency processes that have been introduced, these efforts have had limited success. According to a recent report by a group of United Nations experts, conflict minerals still find their way from the DRC through Rwanda, Uganda, Tanzania and Burundi to markets in places like Dubai in the United Arab Emirates (UAE) Hong Kong and the Far East.

It must be said though that the introduction of the Dodd Frank Act in 2014 made a significant contribution to improve the governance of the mining sector in the eastern part of the DRC. Dodd Frank sent a clear message to the authorities that if they do not clean up this sector, the world would not buy their minerals.

Rwanda on the move (Rwanda’s mining moves)

Rwanda, under President Paul Kagame, has achieved remarkable progress and success since 1994. The country has developed world class infrastructure, established strong institutions and effective governance that will allow stability to prevail long after Kagame is gone.

Rwanda has a strong business sector that relies heavily on support from government, thus sound government practices and strong institutions allows for a favourable business environment. However, the country is located in a volatile region of the continent.

According to George Rautenbach, mediator, strategy consultant and conflict management coach who has worked in the Great Lakes Region for almost 30 years there is no quick fix to the situation in the eastern parts of the DRC.

“A quick short-term solution will not resolve the instability in the future. One should thus be prepared for a continuation of the current instability for a prolonged period until such time that effective government and strong institutions are established in the DRC. This should go hand in hand with the development of effective infrastructure,” says Rautenbach.

Steenkamp says that the mining sector in Rwanda could experience a boom on the back of energy mineral prices increasing over the last three years, specifically driven by coltan and cassiterite.

“The mining sector contribution to the country’s economy was just short of USD800-million in 2022, with approximately 18, 658 tons of ore exports. Focussed exploration efforts since 2018 have resulted in the discovery of several deposits of wolfram, cassiterite, gold, colombo-tantalite (coltan), lithium, beryl, rare earth minerals and various gemstones.

“The economic mineralisation is predominantly associated with pegmatite and mineralised veins. The same mineralised lithologies extend over the western border of the DRC and the northern border of Uganda,” says Steenkamp.

Rwanda has made significant investment in developing the infrastructure required to achieve domestic beneficiation of ore. This includes the construction of the Gasabo Gold Refinery at the Kigali Special Economic Zone, which refines raw gold and sells silver as a by-product.

The Luna Tin Smelter is in Karuruma and processes cassiterite and sells coltan as a by-product. The new POWER- X coltan refinery has also started to refine coltan ore and separate tantalum and niobium.

Luring foreign investors (Rwanda’s mining moves)

According to Warren Beech, CEO of law firm Beech Veltman, Rwanda’s mining ambitions will soon be met because of increasing, and systematic, investment in productivity, exploration and value addition.

“First, owing to increased mines productivity and mineral value addition through enhanced investment, overall export of minerals increased last year to 18, 658 tons from 7,343 tons in 2019.

“Second, the increase in global commodity prices of coltan, to USD48.82 per kilo in 2022 compared to USD33.7 per kilo in 2019. Similarly, cassiterite prices doubled from USD9.7 per kilo to USD17.3 in the same period. By investing in refining and smelting, Rwanda has been able to add value to the ores that it mines as well as the by-products have created even more value,” says Beech.

Stable, consistent, and progressive mining regulations that are well understood and communicated, will lure investors to a country already known in the market to be business friendly. The fact that it’s easy to set up a business in Rwanda, combined with great mining potential, a stable political and business environment and exceptional geology with great opportunities for lithium, gold and tin discoveries, will attract junior exploration companies and investors alike.

Rwanda’s mining moves

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Rwanda’s mining moves

 

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