Small-scale mining firms in Rwanda are set to merge their operations into collective investment groups in order bolster their productivity and drive recovery from the Covid-19 effects.
Narcisse Dushimimana, the Head of Mining Regulation and Inspection Department at Rwanda Mines, Petroleum and Gas Board (RMB) revealed the report and said the merger is being piloted in Muhanga District, and if it proves to be successful it will be implemented countrywide.
“Merging will ensure that operators gain financial and technical capacity to increase productivity. So far, the piloting is being carried out in five mining sites. Two operators in one mining block of the selected five blocks have merged and licensed. Others are in the process and we are still assessing the feasibility,” Dushimimana said.
New shareholding structure
The merging includes firms getting a new shareholding structure. The government says it will be easy for mining firms to secure investors. Rwanda has 113 mining companies and cooperatives of which 31 are in mineral exploration.
The miners are grouped in three categories; large, medium, and small scale miners. Dushimimana said that the majority of the mining firms in the country operate at small-scale and use artisanal mining practices. Very few of them have standard machinery.
More than 30 small scale concessions have so far been identified and could be placed under new collective investment schemes. Jean Malick Kalima, the Chairman of Rwanda Mining Association, said that results from the pilot phase will inform mining operators on their next move.
“The idea of consolidation is good but many mining companies still have the mentality to operate alone in their businesses,” he said.