Rwanda has introduced a new law on mining and quarry operations, effective from June 26, 2024. The law introduces tougher penalties for offense or fault deterrence, including government exclusive rights on strategic minerals, new requirements on the transfer of mining licenses, registration of land to the state, and the government’s ability to acquire free shares in mining or quarry operations.
The law also stipulates that landowners or lawful occupiers have full rights on their land, and when a mineral deposit is discovered, the land owner or a lawful occupier is provided with fair compensation before commencing mining operations. The government may also acquire shares in mining or quarry operations on terms agreed upon between the holder of a license and the government.
Offences and penalties related to mining operations range from a minimum of Rwf25 million to Rwf150 million for both individuals and legal entities. These penalties are far tougher than those in the 2018 law, which provided for imprisonment for a term of not less than two months and not more than six months and a fine of not less than Rwf1 million and not more than Rwf5 million.
Some specific offences and penalties in the law include allowing mining activity on land without permission, undertaking mining operations without a license, possessing illegally extracted minerals, and trading in illegally extracted minerals.
The law also includes provisions for the dissolution of legal entities, such as companies or cooperatives, and for the issuance of free carried interest. The government has also urged youth to engage in national affairs and uphold unity, and the introduction of the Alternative Dispute Resolution (ADR) system.
Rwanda has introduced a new mining law aimed at improving regulation, enhancing sustainability, and attracting investment in the country’s mineral sector. Here are five key aspects of the legislation that stakeholders should be aware of:
1. Strengthened Environmental and Social Standards
The new law places a strong emphasis on environmental sustainability and social responsibility. Mining companies are now required to implement stricter environmental management plans and adhere to community development obligations. This includes land rehabilitation after mining activities and ensuring that operations do not negatively impact local communities.
2. Improved Licensing and Compliance Procedures
The updated legal framework streamlines the licensing process, reducing bureaucratic delays and improving transparency. It introduces stringent compliance requirements, ensuring that only serious investors with the necessary technical and financial capacity can obtain mining permits. Regular audits and inspections will be conducted to monitor adherence to these standards.
3. Incentives for Value Addition and Local Processing
To boost economic benefits, the law encourages value addition by offering incentives for local mineral processing and refining. Companies that establish processing facilities in Rwanda will enjoy tax breaks and other benefits, reducing the country’s reliance on raw mineral exports.
4. Enhanced Investment Climate and Foreign Participation
The legislation provides greater clarity and security for investors by defining rights and obligations more explicitly. Foreign investors are given clear guidelines on ownership structures, profit repatriation, and partnerships with local firms, making Rwanda an attractive destination for global mining players.
5. Stricter Measures Against Illegal Mining
To combat illegal mining and smuggling, the new law imposes heavier penalties on unlicensed operators. Authorities will enhance enforcement measures to curb illegal activities and ensure that mineral resources contribute to national development.
Rwanda’s new mining law is designed to promote sustainable mining, attract investment, and enhance economic benefits for the country. With improved regulatory clarity and incentives for value addition, the sector is poised for responsible growth and long-term success.
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