FEATURE: East Africa, led by Rwanda, is 'frontier' for technology metals: mine developers

London — East Africa is a new frontier for the discovery and exploitation of so-called "technology metals," including tin, lithium cobalt and gold, but this will require investment in local processing, along with regulatory clarity, for communities, governments and developers to benefit, mine investors and consultants say.

Rwanda, one of world's biggest producers of the 3Ts -- tin, tungsten and tantalum -- came out tops as a regional mining location due to its stability and investor-friendliness, with Tanzania and Ethiopia lagging behind, mainly for regulatory reasons, according to a poll among speakers and other participants in an Aug. 6 webinar hosted by Mining Review Africa and Africa Mining Forum.

"We're at the beginning of an energy revolution which has enormous relevance to technology metals, and also at the beginning of an major supply-demand dislocation" in the minerals and metals required, said Brian Menell, chairman and CEO of Ireland-based TechMet, which owns 25% of Tinco, the largest tin and tungsten producer in Rwanda, with four producing tin mines and one tungsten mine.

According to Menell, technology metals are expected to "consistently outperform other commodities over coming years."

Geopolitics and the possible emergence of a new cold war may create a "fight for dominance" between Chinese and other parties in East Africa for dominance of the mineral wealth of this "frontier" land, he said.

Tin was ranked No. 1 in a Massachusetts Institute of Technology report of metals most impacted by new technology, according to TechMet. Primarily used as a solder, it is a fundamental ingredient for EVs, energy storage, renewable energy, advanced robotics and computing.

"There are seven times the amount of tin in an electric vehicle as in an internal combustion engine vehicle," Menell said.

New Rwanda mine directives

The Rwanda Mines, Petroleum and Gas Board (RMB) unveiled new strategies in June to help the mining sector to recover from the coronavirus pandemic, Mining Review Africa reported.

Rwanda now targets becoming a regional mineral hub, focusing on downstream processing and trading. Webinar speaker Marcus Courage, CEO of London-based Africa Practice, an Africa-focused strategic advisory firm, noted that progress on regional integration has moved faster in East Africa than in the rest of the continent.

Rwanda established its first-ever gold refinery last year, with capacity to process gold from around the continent, boosting African efforts to add value to minerals before export. There is a Rwandan-owned tin smelter in Kigali, East Africa's sole tin smelter, recently certified as conflict-free, and there are plans to establish a tantalum smelter.

RMB's strategies also involve reorganizing small scale mining operators into licensed collective companies to be supported with international investment.

Mining equipment and explosives are now to be made locally; mining and mineral exploration defined as a priority in the investment code, and a Mineral Exploration Support Fund set up.

"The aim is to attract international mineral exploration companies, and de-risk exploration investments, key to achieve industrial scale mining operations," Mining Review Africa said.

Menell said Tinco is looking at establishing tin smelting operations in Rwanda to make ingots, but that tungsten is more difficult to beneficiate locally as it is more energy intensive.

Rwanda also has "interesting lithium hard-rock potential," he said. "It is a low-value commodity in its raw form and would be interesting to look at processing locally."

Ethiopia: Emphasis on local beneficiation

Courage noted that Ethiopia is also emphasizing local processing, with a "10-year home-grown economic agenda which brings more clarity of expectation in terms of manufacturing and other related industries, and the impetus they place on local beneficiation."

The coronavirus pandemic is nonetheless expected to depress exploration and investment levels for one-three years throughout the region, he said.

Andrew Smith, president and CEO of East Africa Metals, a Canadian junior mineral explorer, noted that the Ethiopian government aims for mining revenues to account for 10% of the country's GDP by 2025, up from 3% in 2010.

Smith highlighted the "great potential" of Ethiopia in both coal and gold. East Africa Metals has spent $30 million in exploration in the country in recent years and has gold prospects "robustly economic at current prices" near the Queen of Sheba's Palace, where it has identified 1.8 million oz with a discovery cost of just C$15/oz ($11.21/oz), a fraction of recently stated world discovery cost averages. It has signed agreements with Chinese developers on two of its three projects in the area which are expected to move ahead in Q4 this year, and is optimistic it will start bringing its third project in Ethiopia and a project in Tanzania -- projects with 2.8 million oz gold potential -- on stream in 2021.

Tanzania government seen moderating position

Rocky Smith, CEO of Peak Resources, an Australia-based mineral explorer focused on rare earths, said Tanzania's 2017 mining law changes have "reoriented processes and reduced clarity" which has led to no new mines being developed since then.

However, Smith sees recent positive developments with a framework $300 million payments settlement drawn up between Canada's Barrick Gold and the Tanzanian government for restart of the Acacia gold mine, which resumed exports in May, and a separate financial accord struck by Black Rock Mining and the government. Peak considers these will favor its ability to gain financing for its various projects which have so far "taken a lot longer than expected."

There has been "a significant lack of trust between operators and regulators" in Tanzania in recent years, said Courage, noting the mining ministries in both Ethiopia and Rwanda have made efforts to improve investment transparency.