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Rwanda : New Mining law will check idle investments
Posted by: peter
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Posted date:
January 18, 2013 |
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Mining in Rwanda
The department of Geology and Mines in Rwanda has said that the new bill to turn into law has been designed to check idle investment in the mining industry.
According to the Director General of the Mining authority Dr. Michael Biryabarema, the law has been designed to protect the industry from ‘idle’ investors, who acquire concessions but carry out no activities.
Biryabarema says that the department has been facing several cases of investors, who get mining concessions but leave them idle.
The new draft law will be adopted this year.
“The law is trying to prevent companies from sitting on potential exploits, yet they have licences to hold them for over years.”
The same view is held by John Gara, the chairman of the National Law Reform Commission, he also explained that the law allows potential investors to temporarily stop exploration activities once they inform the minister on time, with justifiable reasons.
However, mining firms in Rwanda want the government to amend a section of the mining draft law that requires investors to spend a certain minimum amount of money on exploration activities.
The firms, which include Rogi Mining Rwanda, believe that if the article is not revised, it will discourage investments into the sector. Rogi Mining Rwanda is one of the country’s largest gold explorers.
According the draft law, if a company does not spend the stipulated amount, the balance is considered a debt to the government.
In the new law, a company is granted an exploration license when it agrees with the government on the minimum money it must inject into exploration activities, among other requirements.
“Any monies required to be spent under the provisions of the license and which are not spent shall, on failure to give justifiable reasons for the shortfall, be a debt due to the government, recoverable in a court of competent jurisdiction,” the draft law says.
Oleg Moiseev, the Rogi Mining Rwanda MD, said: “When companies agree on a minimum investment, sometimes they inject half of it after realising the concession has no tangible minerals.”
He said the law had to insulate investors so that once a firm finds no mineral quantities of commercial value; it does not have to spend more money on it.