Economic Growth Through Mining
Minerals mined: Gold, tantalum, tin, gold and tungsten
Independence: 1 July 1962
Area: 26,338 km2
Mining fact: In 2014, the country earned $203.32 million from mineral exports
With an agrarian subsistence economy, Rwanda remains one of the poorest countries in Africa. The primary mineral resources of Rwanda include: arable land, hydropower, methane, gold, tin ore, and tungsten ore. Some 90% of the Rwandan population is involved in agricultural work, and 75% of the land is suitable for growth of crops. Rwanda continues to battle against the elements with periodic droughts plaguing the country.93% of water is primarily used for agricultural purposes, while 2% is used for industrial applications and 5% for personal consumption.
Mining Potential and Natural Resources
Despite the great challenges facing the country, Rwanda does have significant mineral reserves and a more importantly, potential to use mining and mining related activities to provide much needed stability in the economy. The mining industry at present contributes around $80 million to the economy, just under 15% of total exports, and there are a number of untapped, unexploited mineral reserves in the country. In a controversial decision taken in 2012 the Rwandan Ministry of Natural Resources suspended all mining in the region around the Sebeya River in west Rwanda. The reason for the suspension was due to the negative environmental effect on the ecologically sensitive area. The decision however, cost the jobs of thousands of Rwandans.
Challenges notwithstanding, the mining sector in Rwanda continues to grow and the regulatory and governmental organizations continue to improve their capacity for negotiating contracts, issuing permits and in lowering the export and transportation costs from the sometimes remote mining areas to global markets.
Coltan and Tin Ore
The mining of casserite (tin ore) and coltan are the two largest contributors to the mining sector and the economy of Rwanda. The country produces around 4000 tons of tin ore for export each year. Around 900 tons of coltan is extracted annually, followed by around 850 tons of extracted tungsten ore. Rwanda produces around 4% of the world’s tungsten. Coltan is exported and used in the manufacture of cellular phone and other electronic equipment.
Natural Resources in Rwanda
The untapped peat deposits in the southwestern regions of Rwanda remain an untapped opportunity for economic growth. Though the agricultural sector remains the strongest contributor to the economy it is heavily reliant on the weather as well as sensitive to dips in the demand and final price for these goods in global markets.
Coffee and Tea Production in Rwanda
Exports from Rwanda declined to $44.32M in June 2015, from $45.61M in May 2015. Between 1998 and 2015, Rwandan exports averaged $94.78M, with a record high of $590.8M in December 2012. The government body responsible for reporting all exports in the country is The National Bank of Rwanda. The export market of the country is dominated almost entirely by tea, coffee and various minerals. These include wolfram, coltan, tin and cassiterite. The country has strong trading relationships with the US, China and Germany. Rwanda’s balance of trade figure was last reported at -$182.61 million. This is a result of the country’s $226.93 million in imports and weak exports of $44.32 million.
Rwanda Remains Plagued by Civil War and Slow Economic Growth
Rwanda is a resource poor country which is primarily involved in subsistence farming. This African country has an inflation rate of 4.2% and Foreign Direct Investment inflows of $110.8 million. The unemployment rate is 0.6% and the population is presently 10.6 million. Rwanda’s Gross Domestic Product is $16.4 billion and the economy sports a growth rate of 5% per annum. The per capita GDP is $1,538. In terms of economic freedom, Rwanda is ranked at 64.8, which effectively places this country’s economy in 65th place in terms of economic freedom for 2015. There has been a significant decline in business freedom of late, but the country has improved in 50% of the listed economic freedoms sectors.
Mining Companies operating in Rwanda
Piran Resources, Gatumba Mining Company, TINCO Investments Ltd, Piran Resources LTD