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Investing in a smelter in Rwanda

Exclusive interview with Dr Radoslav Miskiewicz, CEO of Luma Holding Ltd and President of the Supervisory Board of LuNa Smelter in Rwanda. LuNa Smelter is a gold sponsor at the upcoming East & Central Africa Mining Forum where Dr Miskiewicz is part of a session on “International players who added value to their mining industry”.

Let’s start with some background on the history, development and capacity of LuNa Smelter.

LuNa Smelter’s history goes back to early 1980s when the facility was developed  by SOMIRWA (“Société des Mines du Rwanda”). The smelter was established within close vicinity of SOMIRWA biggest cassiterite mine, Rutongo, which today is still in operation. It’s worth mentioning that the plant was unique for the East Africa, a strategic one for Rwanda and its production has been restarted after the Rwandan Genocide and the Liberation War. 

Luma Holding, as a strong industrial and metallurgical player on the European scene, was analysing several acquisition options in Africa, and after a careful due diligence process and negotiations with our partner – Ngali Holdings, we have decided to participate in the purchase tender for the Smelter. Luma Holding and Ngali Holdings jointly won the tender and created a JV company – LuNa Smelter Ltd. – dedicated to developing the plant and its operations.  

The smelter is equipped with an electric arc furnace which can currently process ca. 300 tonnes of cassiterite concentrate. The furnace was upgraded and renovated by our Group metallurgical team which worked intensely with Rwandan workers on the knowledge transfer processes and implementation of metallurgical processes standards. The plant has a complete refining and casting equipment as well as its own beneficiation facility with gravity and magnetic separators.  

Luna Smelter’s production capacity is 1800 t of the pure tin metal per year, with the quality which exceeds the LME standards. However, we are determined to reconstruct and renovate the second furnace to increase our production to 5400 t/a and prepare it for the production of special 99,99% Sn tin metal.  

Any specific projects that LuNa Smelter is involved in currently that you are particularly excited about at the moment?

Recently, Luna Smelter has been granted with two essential exploration licences, located in the Eastern Rwanda, in Gatsibo and Kayonza districts. These concessions are known to be endowed with Sn-Ta deposits, tin dominating over tantalum. Obtaining our own licences was a natural step towards vertically integrated growth of the company. 

The exploration strategy foresees conducting an advanced and holistic exploration campaign, using not only traditional methods, but also modern and innovative ones, such as Geo – IT, as a new approach which is to limit a negative impact on environment. Exploration stage will involve not only high experienced geologists and professors from Europe, but also educated and experienced Rwandese experts, as well as local consultants. This cooperation will create a good opportunity for knowledge and experience exchange between these two countries, as we are willing to engage students from University of Rwanda during geological works. Our Group has initiated and implemented several educational programmes dedicated for the mining sector, we do plan to also implement them in Rwanda. 

Planned exploration path will lead to resource estimation of existing ore deposits and discover new potential mineral occurrences. 

In addition to that, Luna has opened negotiations on the JV partnership with several mining units in Rwanda. Our strategy is to be an active player within the complete mining value chain in Rwanda and boost this sector and support its growth. 

How important is sustainability, responsible mining and eco-friendly practices on the ground for the company? 

Responsible sourcing as well as traceable minerals sourcing along with the best mining practices are of a strategic value for us. That is, LuNa Smelter is a full official member of ITSCI and intends to implement a risk – based audit program for smelters in the Responsible Minerals Assurance Process (RMAP, formerly Conflict – Free Smelter Program, or CFSP). We acknowledge the importance of responsible material sourcing, therefore we are fully engaged in mine site visits and review of supply chain due diligence processes. LuNa’s staff in charge of traceability and due diligence implementation ensures good and intact collaboration between LuNa and our suppliers. It is also a way to streamline, improve, and build capacity, and to find reasonable and adequate solutions when risks are identified or an incident occurs. 

Sustainability and environment protection are our priorities. We aim at full compliance with all applicable laws and other regulations regarding environmental protection and requirements of the ISO 14001 standard, which is voluntarily adopted by all our manufacturing companies. We undertake to constantly introduce measures in order to minimise the negative impact on the environment and to observe the principle of continuous improvement of environmental management system and take “green” actions. 

As an example of our practices, we are happy to share a success story of one of our companies: Re Alloys – the Polish leading ferro alloys smelter. In 2014 Re Alloys completed implementation of the project named: “Modernisation of the de-dusting installation of the III furnace building “. Within the project, energy supply systems of 6 gas extraction fans in the III and IV furnace buildings were modernised. The undertaking allowed changing a fans efficiency adjustment method by changing their rotational velocity. The effect of the conducted modernisation is reduction of electricity consumption, as well as CO2 emission reduction. In the first five years of using the implemented solution, the company achieved energy saving of approx. 26,900 MWh and CO2 emission reduction by approx. 23,900 Mg.

Also, while implementing eco-friendly practices, we are constantly looking for innovative solutions. This is confirmed by other pioneering projects implemented also by Re Alloys: “Development and implementation of a technology of electricity production from post-production gases heat” co-financed by the European Regional Development Fund within the Innovative Economy Operational Programme. One of the key aspects of the implemented project is its environmentally-friendly nature which is reflected in reducing of gases and dusts emission (NOX, SO2, CO2) and atmospheric emission of heat energy, in using renewable fuels in the production of silicon alloys or acquiring the status of the waste less energy production.

How excited are you about the mining opportunities in Rwanda and the region?

Rwanda is still considered as the country with unexplored minerals potential and I believe it can offer several interesting opportunities within 3T minerals, gemstones, gold and battery minerals. Our own exploration projects are our key concern, as our main goal is to develop the concessions into full working mines. 

It’s worth mentioning, that Rwanda is definitely becoming a crucial player on the East African mining scene. With recently developed production facilities, such as gold refinery, tin smelter and upcoming tantalum refinery, its position as a regional minerals and metals hub is confirmed. 

I believe it is of a significant importance that countries in this region cooperate closely and conduct joint efforts leading towards development and production of the added value here in Africa. Rwanda is a fantastic example and it can, and even should, offer its processing capacities to neighbouring countries. 

We would be very interested in working closely with partners from Tanzania, DRC and other countries, in order to develop good business relations, which might bring us to further investments within the region. 

What advice would you give a prospective investor in this sector in the region?

The East African mining sector is truly underestimated by new investors. There is great potential, both in human and natural resources. My advice is to visit such events as East & Central Africa Mining Forum or other industry events to meet and explore the first-hand knowledge.  

How important is your relationship with the Rwandan government?

LuNa Smelter was created as a JV company, with 25% of its shares belonging to a state-owned holding company – Ngali Holdings. Therefore, the ongoing dialogue with Rwandan government is a key element of the company’s daily business and its further growth. 

We have an outstanding cooperation with the Rwanda Mining Board and we do appreciate their support in the development of the processing sector in Rwanda. 

LuNa Smelter is also a member of the Rwanda Mining Association, where we not only learn from others’ experience, but also share our knowledge and best practices. 

What is your vision for mining in East Africa?

Regional mining sector is still based on the artisanal operations, which are unfortunately not safe and do not bring expectable benefits to the communities and the state. 

Detailed exploration, customised mining solutions, determined investors are needed to change this situation and take regional mining sector to safer, more efficient and sustainable level. I am sure that mining will become a driver for regional industrialisation and the upcoming projects will definitely transform lives of the local community and improve their well-being. We, as the investors, will contribute to evolution of the region by creating more jobs and providing sufficient staff training. 

Why the decision to partner with the East & Central Africa Mining Forum in October?

We recognise this event as the best place to share our experience and meet our local friends and potential future business partners. We appreciate the possibility to be the event’s gold sponsor and naturally, we consider becoming a long-term partner for future occasions. 

Annemarie Roodbolhttp://www.miningreview.com
Annemarie Roodbol is a communications practitioner based in Cape Town.