Monday, 20 May 2024

Impact of Gold Refinery in Rwanda

Since 2019, Rwanda has gone a step further into improving the flow of foreign currency receipts by investing in Gold Refinery for the benefit of the economy and the people. Rwanda opened its first gold refinery to process gold from all over Africa and to discourage the export of the minerals from the continent. The new refinery, built at a cost of $5 million by Aldango Company is located at the Kigali Special Economic Zone in Gasabo District.

Gold-mining and refinery are a major source of income and economic growth, with an important role in sustainable socio-economic development.

Aldango Ltd (Gold Refinery) is a legal entity registered in Rwanda, doing business in the gold and precious metals industry in Rwanda and throughout the African continent. The company hopes to add tremendous value to the emerging gold industry in Rwanda and other regions to change the face of the region's mineral wealth and solve the so-called resource curse that has befallen the wealthiest countries in sub-Saharan Africa. This is achieved through strong KCY (Know Your Customer) and strict compliance policy of the company. Aldango can process 200 kilograms of gold per day.

The idea behind the establishment of this refinery is to be able to process Gold from across the continent, thus reducing the price of refinery of African Union states, whilst boosting exports for the country. As Mining Review Africa put it, this is "transforming Rwanda into a precious metal hub", this is a real gamer changer.

The gold refinery, which was opened in June 2019, will help boost the current gold processing export capacity to about $8 million. The government hopes that the total revenue generated by the refinery will add up to $200 million a month. Speaking during the opening of the refinery, Finance Minister Claver Gatete said that the government is already using 50 percent of gold in monetary reserves and expects it to increase to 55 percent by December this year. "We are using 50 percent of our deposits to purchase gold" he told journalists at the opening ceremony. With this refinery, we should be able to process more than 2 tons [of gold] per month.

Speaking to The New Times, Rwanda, Jean de Dieu Mutunzi, the company’s chairman said, “We have built an advanced factory with enough capacity to process large quantities of gold from all around Africa. What we are doing is not new but people have been used to taking gold to Europe, Dubai, Turkey, Switzerland, and Belgium. Now we have the same factory with the standards as those in Europe and Asia". This does a long way in creating corridors of gold refining in Africa, and boost production output for the country. 

Rwanda Gold Production was reported at 300.000 kg in Dec 2018. This stayed constant from the previous number of 300.000 kg for Dec 2017. Rwanda Gold Production data is updated yearly, averaging 15.000 kg from Dec 1990 to 2018, with 29 observations. According to the Ministry of Trade and Industry, Rwanda exported some $500 million worth of minerals – albeit in raw form, in 2018. The country targets $1.5 billion in revenue from mineral exports by 2024.

With the advent of the Refinery, Rwanda is set to grow its output and boost its economy further. As the Kigali Special Economic Zone is a Free Trade (FTZ) zone, the country will enjoy expeditious procedures of importing and exporting capital goods for the establishment and operations of the refinery.

The refinery has three major objectives: to make Africa self-sufficient in refining gold; to reduce illegal exports of African gold; and to create jobs in Rwanda. In order to foster regional trade, an intra-African gold trade agreement was signed by member states. As such, it will be easier for African countries with under developed mineral industries to process their gold locally.

In Rwanda we have two types of Gold which are Placer gold and Alluvial gold. The two types are both available in the concessions owned by Ngali Mining Ltd (NML) in different areas such as Bweyeye and Miyove. NGALI Mining Ltd is a Private Limited Company registered in November 2015 under the Rwandan law, fully owned by NGALI Holdings and the latter being a public-owned enterprise. It’s located in Kigali City, Gasabo District, Kimihurura Sector; It has been created for investment purpose and improving the Mining service delivery basing on best practices internationally accepted. NGALI Mining Ltd comes to ensure benefits of shareholders as well as the Rwandan Community.

The foundations of NGLI Holdings begin date back to 2000. In 2000, the Government of Rwanda developed Vision 2020 which aims to transform Rwanda into a middle-income country, one in which its citizens are healthier, educated and prospering. To realize the goal of Vision 2020, the Government of Rwanda required the participation of Private Sector companies, to develop the skills and technology needed to achieve competitive advantage. In 2010, a development company Digitech Solutions was registered to execute various projects in the energy, IT and healthcare sectors, these were eventually established as individual subsidiaries. During 2012, Digitech Solutions was rebranded and restructured to form an investment holding company Ngali Holdings.

Through this holding company, the Government of Rwanda has invested in gold mining, and related minerals, from exploration, extraction to refining, in countries such as Kenya, Tanzania, Uganda, Angola, Congo-Brazzaville, Gabon, Cameroon, and Nigeria. The government has invested in joint ventures and reserves in these countries, through the private sector to execute projects. In addition to gold mining, as part of for its Vision 2020, the Government of Rwanda will start mining other minerals such as Iron, Copper, Lead and Zinc.

The refineries offer miners and states a way to extract value from their own mineral wealth rather than just exporting raw commodities, thus enabling easy of trade and ownership of the value chain.

Sources: Business Live, CEIC Data, The African Courier, Mining Review, New Times