Rwanda sees mining receipts falling 40 pct in 2009

By Hereward Holland

KIGALI (Reuters) - Rwanda's mining revenues may fall 40 percent to around $56 million this year, down from a record $94 million in 2008, as demand contracts and prices drop on the world market, a government minister said on Thursday.

The global slowdown has throttled demand for Rwanda's high-end minerals such as tin and tungsten but sales of tantalum, a rare metal used in electronics, are stable, said Vincent Karega, Minister of Minerals and Natural resources.

In response to the slump in global commodity prices, mining companies are cutting production and watching the market carefully for signs of a price rebound, he said.

"On average we are talking about a drop of about 40 percent ... but the good news in Rwanda is that nobody has stopped investing," Karega told Reuters in an interview.

Volatility is common in commodities markets and had not deterred serious long-term investors, he said.

Rwanda's political stability and comparatively better infrastructure has made it a major transit and processing point for minerals from its war-torn neighbour Democratic Republic of Congo.

Karega said he was hopeful Rwanda's mineral sector would boom as soon as the world economy recovered.

"The minerals produced in Rwanda are part of the rare minerals. It's not like steel or copper which takes a lot of time to recover," he said.