Rwanda: Africa’S up and Coming Mining Destination
Total Page:16
File Type:pdf, Size:1020Kb
Rwanda: Africa’s Up and Coming Mining Destination Rwanda Mines, Petroleum & Gas Board (RMB) RWANDA AT A GLANCE Population size Govt. & Parliament 12.1 million Presidential republic Bicameral parliament Official languages GDP per capita Kinyarwanda, USD 703 per capita French, English, Swahili Literacy/Employment GDP (6 yr growth) 70.5% / 83.3% USD 8.1bn (7.3% p.a.) Currency/exchange rate Ratings Rwanda Francs (RWF) B+, “stable” - Fitch ~RWF 847/USD B, “stable” - S&P 2 Sources: World Atlas, World Bank, Fitch, S&P - all 2016 except: population and Fitch rating 2017, exchange rate 2018 RWANDA IS … Safe and secure – 5th safest country to walk at night worldwide Stable – lowest debt ratio in region; stable ... low risk credit ratings High level of governance - #1 govt. transparency inAfrica 2nd fastest growing economy in Africa; 2nd FDI/GDP inregion ... fast growing Most improved nation in human development in the world 2nd for doing business in Africa; 6hr business registration Growing bilingual and educated workforce (~47,000 ... business friendly grad./yr) Modern – 95% network coverage; 4th in global genderequality and modern Free trade agreements with ~50 countries ... a regional Preferential access to immediate proximity market of 60m Strong African hub potential; highly connected platform African airline 3rd MICE ranking in Africa; +18 ranks in 3 years ... home to rich Rich raw material availability; 17+ agri-inputs natural advantages Highest gorilla population in Virunga Massif; 1.2m tourists 3 Source: Rwanda Development Board (RDB), 2018 ECONOMIC PROFILE RWANDA DISPLAYS STRONG ECONOMIC GROWTH AND HIGH LEVEL OF INVESTOR CONFIDENCE Second highest growth in East African region ... ... with strong level of FDI versus GDP Average GDP growth 2010-2016 (%) FDI/GDP in 2016 10.2% 2nd inAfrica 4.3 3.9 3.8 7.3% 3.4 6.8% 6.0% 5.7% 5.3% 2.3 4.0% 1.6 Ethiopia Rwanda Tanzania Kenya EA Uganda SSA Tanzania Rwanda Uganda Ethiopia Kenya Burundi average average Source: World Bank 2017 4 ECONOMIC PROFILE HIGH STABILITY REFLECTED BOTH THROUGH BOTH REGIONAL AND INTERNATIONAL STABLE CREDIT RANKINGS Lowest debt ratio in the region ... ... with stable international credit ratings Public debt to GDP (%) Credit ratings 52.7 48.6 40.5 38.4 35.4 34.6 2017: B+ (stable) Kenya Ethiopia Tanzania Burundi Uganda Rwanda 2016: B (stable) 5 Source: World Bank, Fitch 2017 rankings, S&P 2016 rankings BUSINESS ENVIRONMENT Business friendly Multiple incentives – Efficient, Commitment to regulation largely for exporters supported processes foreign ownership ✓ #2 in Africa for Ease of ✓ Preferential corp. ✓ Highly digitalized and ✓ No restrictions Doing Business1 and income tax rate (15% efficient to foreign Global if 50% exported) administration (6 ownership 2 Competitiveness ✓ Accelerated first year hours to register a ✓ No restrictions ✓ #4 least corrupt depreciation rate business) on capital flows Country in Africa 50%3 ✓ Free business ✓ Total effective tax ✓ Exempt capital gains registration lowest in East African & 0% tax if HQ in ✓ One-stop center for Community region Rwanda investors with ✓ Duty-free imports dedicated of machinery & investment inputs4 acceleration team 1. World Bank; 2. WEF; 3. Subject to investing USD50k in business assets; 4. In accordance with EAC customs reg. Source: RDB Investors Presentation 6 MINING FRAMEWORK IN RWANDA RWANDA COMMITTED TO PROMOTING THE MINING INDUSTRY Strong legal and regulatory framework in place for the mining sector; Legislation and policies attractive to investors and supportive for foreign direct investment; Strong government support and a willingness to improve the mining sector; Ambition to become a regional hub for mineral services, such as processing and beneficiation. 8 INTERLOCKING REGULATORY FRAMEWORK COMBINATION OF REGULATORY BODIES CREATING A TRANSPARENT MINING CODE Policy RWANDA MINES, PETROLEUM, GAS, BOARD (RMPGB) Drafting ✓ Responsible for the development of policies, laws, and regulation ✓ Responsible for implementation of the national Policy mining policies and strategies Implementation Environmental RWANDA DEVELOPMENT BOARD (RDB) Protection ✓ Responsible for supporting sustainable economic growth and development Economic RWANDA ENVIRONMENT MANAGEMENT AUTHORITY (REMA) Development ✓ Responsible for implementation of environmental policies and laws 9 SUSTAINABILITY AND TRANSPARENCY RWANDA IS AT THE FOREFRONT OF SUSTAINABILITY AND TRANSPARENCY OF THE MINING SECTOR SUSTAINABLE DEVELOPMENT OF MINING IN RWANDA (SDMR) ITRI SUPPLY CHAIN INITIATIVE (ITSCI) 3-year technical assistance programme to help support the sustainable growth of “ITSCI’s purpose is to create responsible mineral supply chains that avoid Rwanda’s mining sector, with a focus on artisanal and small mines. Intended contributing to conflict, human rights abuses, or other risks such as bribery.” results include: Managed by the ITA (formerly ITRI) and Tantalum-Niobium International Study • A more professional, open and transparent mining sector; Center (TIC) • A more efficient and economically viable mining sector, in line with More than 21kt of mineral concentrate are being exported under ITSCI’s “bag and environmental best-practice; tag” monitoring programme each year from the region • Increased level of private investment in the sector; and ITSCI is monitoring 342 companies in Rwanda that cover 955 sites, 308 of which are ‘active • Improved incomes of artisanal miners Funded by the British Government’s Department for International Development (DFID) as part of the UK’s aid programme and is being implemented by Cardno Emerging Markets (UK), Ltd 10 RECENTLY REVISED MINING CODE TO SUPPORT GROWTH CHANGES TO THE MINING CODE RECENTLY UNDERTAKEN TO STRENGTHEN MINING INDUSTRY IN RWANDA MINING POLICY OBJECTIVES INCLUDE… Promoting scale and Improvement in environmental, sustainability social and health and safety practices Facilitating the transition to Promoting value additive modern and efficient mining processing to increase revenue methods Promoting domestic industry to Encouraging greater become a regional hub for mineral foreign direct investment services 11 EFFICIENT LICENCING PROCESS SIMPLE ROUTE FOR EXPLORATION AND EXPLOITATION LICENCES Ownership EXPLORATION LICENCE REQUIREMENTS Licence Term Size Renewal Multiple Licenses Permitted Requirements ✓ Minimum requirements for geological, geophysical, geochemical or resource analysis Yes with Exploration 4 Years 400ha None YES activities relinquishments EXPLOITATION LICENCE REQUIREMENTS Yes with Large scale 15 years 400ha None relinquishments YES Mine ✓ Minimum requirements for proving the economic value of mineral resources ✓ Mine design and planning, ore treatment and processing Yes with Medium Min 40% local ✓ Social and environment management plan 10 years 100ha relinquishments YES scale Mine shareholding ✓ Infrastructure development plan ✓ Health and safety plan ✓ Employment, skills and technology transfer plan ✓ Compensation and resettlement plan Yes with Small scale 100% local 5 years 50ha relinquishments YES Mine shareholding 12 TRANSPARENT FISCAL REGIME RWANDA’S MINING POLICY FRAMEWORK’S FOCUSES ON THE OPTIMIZATION OF FINANCIAL BENEFITS THROUGH TRANSPARENCY OF TAXES, ROYALTIES AND OTHER PAYMENTS THAT REFLECT THE VALUE OF MINERAL RESOURCES TO SOCIETY CORPORATE INCOME TAX ROYALTIES ON BASE METALS 30% 4% ON GROSS VALUE ROYALTIES ON PRECIOUS METALS ROYALTIES ON GEMSTONES 6% ON GROSS VALUE 6% ON GROSS VALUE 13 INFRASTRUCTURE RWANDA OFFERS ROBUST INFRASTRUCTURE WITH AN EXTENSIVE ROAD NETWORK, GRID POWER AND GOOD AVAILABILITY OF WATER GOOD ROAD NETWORK ACROSS THE COUNTRY FURTHER INVESTMENT A KEY PART OF RWANDA’S ECONOMIC DEVELOPMENT AND POVERTY REDUCTION STRATEGY KIGALI-DAR ES SALAAM PORT US$2.5BN PROJECT TO CONNECT TO TANZANIA’S STANDARD GAUGE LINE, PRESENTLY BEING BUILT IN TWO PHASES; DAR ES SALAAM TO MOROGORO, AND MOROGORO TO MAKUTUPORA ENHANCED POWER AVAILABILITY & CAPACITY INCREASED CAPACITY AND IMPROVED NETWORK RELIABILITY, ‘PRODUCTIVE USERS’ (INCLUDES INDUSTRY) USAGE FROM 72% TO 100% AS PART OF THE ENERGY SECTOR STRATEGIC PLAN (ESSP) 2018/19 TO 2023/24 WATER WIDELY AVAILABLE 14 GEOLOGICAL ENDOWMENT OF RWANDA INDUSTRIAL AND PRECIOUS METALS KNOWN MINERALISATION INDUSTRIAL METALS, PRECIOUS METALS AND GEMSTONES AS WELL AS POTENTIAL FOR BATTERY METALS AND RARE EARTH ELEMENTS World-class 3T mining Precious metals and Gemstones Battery Metals & Rare Earth Elements 73 74 50 97 3 28 Ta W Sn Au Li Ni REE 181 184 119 197 7 59 ✓ #1 global Tantalum (Ta), #7 global ✓ Regional gold trend hosts large deposits ✓ Known lithium mineralization in the country Tungsten (W) & #12 global Tin (Sn) ✓ Trend continues across Rwanda, with with good potential for significant discoveries ✓ Dominated by artisanal /small scale known deposits and long mining history ✓ Known world class nickel deposits in the region operations ✓ Limited modern exploration with Eastern parts of Rwanda having potential ✓ Opportunity to consolidate and undertake ✓ Country wide gemstone potential ✓ Region host economic Rare Earth Elements (REE) modern exploration deposits with known REE mineralization in Rwanda 16 RWANDA MINING AREAS AND GEOLOGY Bugarama Miyove (tungsten) (gold) Gifurwe Bugarura- (tungsten) Rutongo Kuriti-Bibare (tin) (tin-tungsten) Gatumba (tin-tungsten Rwinkwavu (tin) Rutsiro-Sebeya- Giciye (3Ts) Bisesero (tin-coltan) Musha-Ntunga (tin-coltan) Nyakabingo Nyungwe Nemba (tungsten) (gold) (tin) Birambo (gold) 17 Source: ResearchGate.net GEOLOGY OF RWANDA Rwanda’s tin-tungsten-tantalum (3Ts) and gold mineralisation is related