31 August 2014 – The value of Rwanda’s mineral exports dropped by almost a fifth in the first half of the year, even as the volume of sales rose, because of a fall in tantalum prices, State Minister for Mines Evode Imena said.
The East African nation generated $93.5 million from shipments of minerals compared with $114.9 million in the same period last year. The volume exported climbed 13 percent to 5,200 metric tons.
“Tantalum prices will definitely affect this year’s mining revenue,” Imena said in an e-mailed response to questions on Aug. 29 from the capital, Kigali.
Rwanda is one of the world’s biggest producers of tantalum, a metal used in mobile phones and video-game consoles, accounting for about 15 percent of global production in 2011, according to the U.S. Geological Survey. Prices of tantalite, a tantalum-bearing ore, declined to an average of $80 a pound at the start of this year from $124 a pound in June last year before recovering to about $100 a pound by the end of June 2014, according to data compiled by U.K.-based Metal-Pages and Argus Media Ltd.
Rwanda is struggling to meet its goal of increasing total foreign investment in mining to $500 million by 2018 from $150 million in 2012 and more than triple the industry’s contribution to the economy to 5.3 percent, the World Bank said in a report last week. Mining is the largest source of foreign exchange for the $7.5 billion economy, according to the bank.
Manual Labor
The government has issued 548 mining permits to 213 companies, though most operations are small investments valued at less than $100 million each. All rely on manual labor to extract the metals with only a few using equipment such as bulldozers and explosives, according to the World Bank. Five operations are owned or jointly operated by foreign investors, it said.
The mining industry’s performance in Rwanda is “intrinsically vulnerable to fluctuations in international commodity prices, which is evident in the results” from the first half, according to the World Bank.
Revenue from tantalum dropped to $40.9 million in the first six months of the year from $69 million in the same period of 2013, while sales of cassiterite, or tin ore, fetched $38.8 million from $31.4 million last year.
*Saul Butera in Kigali at sbutera2@bloomberg.net
