Mining: State takes a belated interest in minerals

Each time Joseph Mbaya takes a photograph of a mine in Rwanda, he switches on a special GPS function just to prove where it is.

"People in Congo don't believe there are mines here," says Mr Mbaya, head of a tin industry traceability scheme intended to stop smuggling through Rwanda and the rest of the region of minerals that fund conflict in the Democratic Republic of Congo.

The country has, after all, for years been accused of profiting from Congolese minerals, either smuggled out across the border or legitimately re-exported.

As a result, few believe in the prospects for the underinvested mining industry.

Yet, according to records held by Mr Mbaya, whose job with the tin industry association (ITRI) is to ensure every 50kg bag of minerals sourced in Rwanda is tagged and exported as such, the country has 450 mine sites, producing tin, tungsten and tantalum.

While there has been little management or investment to date - and the country's mines rely on about 25,000 artisanal diggers who carry sacks of rock on bent backs - official figures regularly show mineral exports outweigh those of coffee and tea put together.

While banks back everything from construction to manufacturing with soaring credit to the private sector, not a single bank in the country recorded a loan for mining and quarrying last year. "At the moment there's a problem ... we don't have clear plans and, from the beginning, it wasn't seen as something that had big potential," says John Rwangombwa, the finance minister.

"But today we see there's big potential. We've taken up mining as one of the key strategic sectors; we're recruiting experts."

Latest statistics suggest Rwanda exported $164m in minerals last year from just over 8,000 tonnes of material, up from $67.85m and 5,466 tonnes the year before, due to a spike as traders tried to clear their stocks ahead of an April 1 deadline that required them to trace the origins of their material or risk forfeiting their business.

New US legislation, alongside a raft of policies from the UN, the Organisation for Economic Co-operation and Development and industry bodies, is intended to ensure that minerals from sites controlled by rebels and militias in Congo do not end up anywhere near an electronic accoutrement that relies on even the tiniest amount of metal mined from central Africa's conflict zones.

Pockets of foreign investment in some of the country's top 10 or so mines, suggest there is room for growth in the sector.

But the top two mines that have garnered foreign investment in the past four years have already hit a snag. Less than an hour's drive from the capital, 688 workers heave filthy rock out of tunnels. Blasts shudder every afternoon, dislodging wolframite - tungsten ore - that is then bagged for processing the next day.

Peet Muller, general manager at the Nyakabingo mine for Tinco Investments, says the 28 tonnes a month it produces could double with as little as $14m investment that would help mechanise production and build a processing plant.

But he says short-term licences that extend production for only three months at a time make raising money for long-term investment impossible. "We've been asking for a licence since April last year," he says.

Rwandan authorities say the company, which operates for now under a dual exploration/exploitation licence, has failed to meet its obligations to explore the deposit over the past four years and furnish the government with the results. The company rejects the claims, arguing it is impossible to determine the size of the resource.

Tinco also operates Rutongo mine, the country's largest, where 3,332 artisanal diggers deliver more than 100 tonnes of 71 per cent tin concentrate a month to Malaysia for smelting.

"We want to put in $40m and we would be able to increase production immediately by 50 per cent, but no one is going to invest a cent with a two-year or four-year licence," says Martin Kahanowitz, executive director for Tinco in Rwanda.

Mr Rwangombwa says he wants formal mining companies to come in and upgrade artisanal sites, but nevertheless insists mine operators should explore in full before they win a long-term production licence.

The hitch may slow Rwanda's already belated prospecting hopes further. "The government is scared they're giving away an asset, but we are the ones putting our money where our mouth is," says Mr Kahanowitz. "We want to make both these mines into sustainable world-class mines."

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