GMC to invest $2.5 mln in Rwanda ore exploration

By Hereward Holland

KIGALI, Feb19 (Reuters) - South Africa's Gatumba Mining Concessions (GMC) will invest $2.5 million exploring for tin and tantalum in Rwanda this year, the company has said.

This week drilling began on a 28,000 hectare concession in the west of the small central African country, which if successful, GMC hopes to boost tin production to 100-200 tonnes per month from just 5 tonnes per month at the moment.

GMC signed a 25-year tenure agreement in 2006 as part of a joint venture between the Rwandan government (49 percent share) and another South African firm, Mineral Processing Association percent (MPA) (51 percent share).

"We spent on our exploration campaign in excess of $2.5 million last year in Rwanda and we anticipate a similar amount into exploration this year," MPA chairman, Alan Smith, told Reuters in an interview late on Wednesday.

Smith said if the drilling "panned out", they would invest a further $15-20 million into the Gatumba site later this year.

The Gatumba concession was originally exploited by colonial power Belgian, but a lack of investment since independence saw tin production at just 400 kg per month when GMC took over in 2007, Smith said.

"I think Rwanda is still seriously under-explored. If I look at Gatumba, those concessions have been mined for 50 years with very little exploration being carried out," he said.

MPA are in discussions with the government to reopen a tin smelting plant in Gisenyi which the company was forced to close in 2006 because of expensive and unreliable electricity supply.