Rwanda Mining Revenue to Decline on Lower Tantalum Export Prices
By David Malingha Doya and Saul Butera May 23, 2014
businessweek.com
Earnings from Rwanda’s mining industry will decline this year as lower metal prices will counter an increase in production, State Minister for Mining Evode Imena said.
The East African nation’s minerals exports will earn less than the $228 million generated last year, Imena said in an interview on May 21 in the capital, Kigali. He declined to provide a specific forecast for 2014 earnings. The volume of metals, including tantalum, which accounts for about 60 percent of the country’s total mining output, tungsten and cassiterite may rise to 10,000 metric tons from 9,000 tons, he said.
“The revenue from this year will not be good as those of last year unless there is a tremendous increase in prices in the last six months of the year, and we don’t expect that,” he said.
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.
The price of tantalite fell to as low as $88 a pound yesterday from as high as $130 a pound at the start of last year, according to data compiled by London-based www.metals-pages.com.
Rwanda has been promoting that it produces conflict-free minerals as the U.S. prepares to enact a law forcing companies to disclose their use of metals from African nations, said Imena. More than 5,000 U.S. companies that use tantalum, tin, tungsten or gold in their products will by June 2 have to report whether they source from the Democratic Republic of Congo and nine adjacent countries, including Rwanda.
Conflict Mineral
For more than a decade, armed groups and some members of the Congolese army have funded their rebellions and enriched themselves through mineral sales. Rwanda is a primary transit point for smuggled minerals, U.K.-based advocacy group Global Witness said in 2012, even after it started tagging and tracing programs.
“Companies have been reluctant to buy tungsten from Rwanda because of reasons related to conflict minerals. Tungsten buyers have returned but with bad prices,” said Imena.
Revenue from mining should rise to as much as $400 million by 2018 as a tin smelter owned by Phoenix Metal Ltd. now being upgraded comes online probably next year. Imena declined to provide details on the production capacity of the facility.
The smelter, located about 7 kilometers (4 miles) outside Kigali, was built in 1980 by the Belgian government and sold to private investors in 2002, according to Phoenix Metal’s website. |
