Falling worldwide mineral commodity prices are the recent obstacles to the mining sector’s profitability, threatening to overshadow the profits obtained over the years.
Local miners voiced concern about the trend stating it would harm their activities and the industry.
Jean Malic Kalima, president of the Rwanda Mining Association, said they were concerned about the dropping rates and their effect during the general assembly of the association.
“The continued fall of the prices of minerals continues to worry us and it threatens profits and the country’s mining sector’s performance and other operations,” he noted.
Faida Jean Marie-Vianney, a mineral trader owned by Blue Change Mining Ltd, a mineral processing and trading company, informed The New Times that price falls were starting to impact revenue.
“A kilo of coltan, for instance, was $60 when the prices rebounded last year. Today, price has dropped to somewhere between $40 and $45 per kilo. We are already feeling the impact,” he said.
“If this continues, we shall have to cut costs and lay off a number of workers for us to be able to stay in business”.
Minerals that Rwanda uses to export products such as coltan, cassiterite and wolframite have encountered sharp falling rates on the global market in the last six months alone.
According to global market prices, coltan (tantalum) rates fell by more than 15 percent between January and June, wolfram (tungsten) fell by 18 percent and cassiterite (tin) fell slightly by 3 percent.
During the assembly, Francis Gatare, Chief Executive of Rwanda Mines, Petroleum and Gas Board (RMB), said there was little optimism that the trend would change quickly.
“There is short term uncertainty associated with the global trade wars among the big markets. We are not sure whether this trend will change anytime soon,” he said.
He added that this had already affected the country’s expectations of export profits. It has compelled the government to keep its mineral export perspective at $300 million for the present financial year.
The nation missed its mineral export objectives in the last economic year – export profits stood at $306 million against the $600 million target.
Gatare said the plan was to work with local processing firms, especially smelting firms, to start adding value and selling to domestic markets.
In many respects, he added, it will save transportation- related local firms expenses and assist them get activities refinancing very rapidly
“What I think will help is to diversify operations because there has been concentration on the so-called 3Ts (tin, tantalum and tungsten),” he noted.
Rwanda no longer enjoys the monopoly on tin, tungsten, and tantalum on the worldwide market as it has been for the previous century.
The nation has been a significant exporter of these minerals for the last ten years, but Gatare said it was changing.
Rwanda is now home to an operating gold refinery and numerous other gold deposits. Companies are urged to diversify and bring their professional activities into mining and increase the supply to the local refinery.
The government also encourages businesses to diversify into valuable gemstone – a mineral that Rwanda has lately embarked on supporting.
At present, behind tourism, mining is the second biggest contributor to the economy, employing more than 37,000 individuals.