Rwanda has pressed upon the US the need to lift the restrictions under the “conflict minerals” rule, blaming it for the losses in its mining sector.
The government said the country is now stable, and should be spared the application of the Dodd-Frank Act, a US law that has made mineral traceability, auditing and certification compulsory for the Democratic Republic of Congo (DRC) and nine neighbouring countries, to ensure that their minerals are not from conflict regions.
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“Currently, more money is spent complying with conflict mineral regulation than is spent on government taxes. We would like Rwanda to be considered as conflict-free because there is no conflict in Rwanda,” Evode Imena, State Minister in charge of Mining told US legislators.
Mr Imena was last week attending a hearing held by the Monetary Policy and Trade sub-Committee of the US House of Representatives, which is assessing the Dodd-Frank Act, five years after it was signed into law by President Barack Obama on July 21, 2010.
Section 1502 of the Act requires mining companies to disclose whether they source “conflict minerals” — tin, tungsten, tantalum and gold — from the Democratic Republic of Congo and nine neighbouring countries, including Rwanda.
The US legislation intends to control the illegal mineral trade over fears that proceeds could be spent to fuel instability.
The same Act requires all US and foreign firms that use minerals in the production of products such as cellphones and other electronic devices to trace the supply chains and audit production facilities of their suppliers to ensure that they are conflict-free.
The regulations mean local mining firms must undergo costly tagging processes to meet the international market requirements, pushing up the cost of processing.
It is estimated that the tagging process alone consumes up to 40 per cent of miners’ profits.
READ: Miners now protest stringent tagging process
However, despite the changes in the country’s traceability system and strides in ensuring its minerals are conflict-free, Natural Resources Ministry officials blame the Dodd-Frank Act for listing Rwanda together with the nine other countries.
“Putting the countries in one group and applying a ‘one size fits all’ regulation is not only an impediment to efficient implementation of the regulations, but further, such an approach fails to recognise efforts made and challenges faced by individual countries,” Mr Imena said.
The situation, coupled with the current instability in global mineral prices, could negatively affect the national mining sector revenue targets projected at $400 million by 2017.
SOURCE: THE EAST AFRICAN