Rwanda has Built its First-ever Gold Refinery in an Effort to Combat the Exploitation of Africa’s Natural Resources.

The race to refine and clean up Africa’s gold rush!

Posted by: Nicky Verd Comments: 0

The race to refine and clean up Africa’s gold rush is on and Rwanda, once again, is taking a lead by establishing its first-ever gold refinery to combat illegal activities and discourage the export of raw minerals from leaving the continent unprocessed.

Some of Africa’s best gold refineries are in South Africa, a major gold producer with an already large refining industry. However, the rest of the continent is still lacking behind in processing what is being mined on the continent.

More refineries on the continent will discourage the export of raw minerals as well as solve the so-called resource curse that has befallen some of the richest nations in sub Saharan Africa.

The African continent loses a lot when natural resources are exported in their raw state. And so, this move by Rwanda is an effort to halt raw minerals from leaving the continent and to ensure that value is added to raw materials.

This is a great move by Rwanda because processing minerals right here on the continent means adding value to our minerals instead of selling them in its raw form at a throw-away price.

The newly built refinery has the capacity to process gold from all over Africa and boost efforts to ensure that the continent adds value to its minerals before exporting.

The refinery will also transform Rwanda into a precious metal manufacturing and trading hub across Africa.

The Rwandan government says this is an important development and a critical investment for the country.

Africa is heavily rich in natural resources. Natural capital underpins the continent’s economy and it’s the getaway to wealth creation and investments.

Africa as a continent has been exporting raw commodities since the dawn of time and the continent loses a lot of revenue by exporting these commodities in their raw form.

A New Dawn for Africa

At the beginning of 2021, Ghana announced that they will no longer be exporting raw cocoa to Switzerland but will process their own cocoa beans.

For many decades, cocoa has been exported from Africa in its raw form but producing bars at home, rather than exporting raw cocoa, is one way to break neocolonial trading patterns.

And the question many are asking is: will Ghana survive the trade war over cocoa exports? Well, time will tell.

The economic growth of Africa as a continent hinges on the sustainable management of its natural capital. The continent holds a huge proportion of the world’s natural resources, both renewables and non-renewables:

  • Africa is home to some 30% of the world’s mineral reserves.
  • 8% of the world’s natural gas and 12% of the world’s oil reserves.
  • The continent has 40% of the world’s gold.
  • South Africa alone accounts for 90% of global platinum.
  • The largest reserves of cobalt, diamonds, uranium and platinum in the world are in Africa.

In most African countries, natural capital accounts between 30% and 50% of total wealth. But sadly Africa loses an estimate of about $195 billion annually of its natural capital through illicit financial flows, illegal mining, illegal trade in wildlife, unregulated fishing and environmental degradation. This is according to data report by the United Nations Environment Program

Collectively, the continent has a lot to gain in coming together and harnessing its vast natural resources through innovative solutions to fight against the exploitation of natural resources and to finance the development agenda toward greater prosperity of the continent.

Gold worth billions is smuggled out of Africa every year without being captured into records.

Meanwhile, China, the UAE and other countries are cashing in on Africa’s lack of refineries and unregulated environment.

And so, having multiple refineries in Africa is one way to capture, record, add value and fight the exploitation of natural resources.

It’s time those in positions of power and leadership be really concerned about these natural resources leaving the continent.

It is no longer acceptable for mineral producing countries to just mine and export raw commodities without first extracting some value from their own mineral wealth.

Many African leaders are failing to address these issues and develop the manufacturing sector properly and that’s why many African economies grow very slowly inspite of their natural resources.

However, His Excellency President Paul Kagame is a leader with ambitions to build Rwanda to be the Singapore of Africa. Rwanda is Africa’s most inspiring success story with bold developments and visionary leadership.

Many African leaders are comfortable with the exportation of raw materials to Europe, the Western world, Dubai, Switzerland and Turkey. But Rwanda wants to change that by building a refinery with the same standards as those in Europe and Asia to combat illegal activities and to ensure that the continent adds value to its minerals before exporting them.

The Naysayers

I came across some online arguments and debates about this conversation where Some people were asking why Rwanda is building a refinery when Rwanda itself has very limited natural resources. Some were questioning why a country with so little gold should be concerning itself with refining gold.

Well, there’s no denying or disputing that Rwanda produces very little gold of its own and has very limited natural resources.

But the argument that they shouldn’t have a gold refinery just because of their lack of gold is irrelevant. There is no law that says only countries with lots of gold can have a gold refinery. Or is there?…mmhh

Let’s take Switzerland for example. Switzerland is the world’s gold refinery hub but Switzerland has very little natural resources just like Rwanda.

Switzerland does not mine gold but they are the gold refinery capital of the world. The Swiss don’t mine the gold they refine in Switzerland

Switzerland is on the top 10 list of countries with the highest gold reserves in the world yet Switzerland has no active mines.

Getty Images

Switzerland is a country whose name is synonymous with gold, but not because of the amount of gold that is found naturally in the country. And so, if Switzerland can do it, why can’t Rwanda do it?

Switzerland is the world’s gold refinery hub while China is the world’s biggest gold consumer. Dubai is also top of the list of gold consumers and the majority of this gold comes from Africa.

My question is, why do we turn a blind eye to certain activities done by the Europeans or the Western world but criticize an African nation for trying to do something similar that’ll bring value to the entire continent?

If gold from Africa is refined outside the continent, Africa doesn’t benefit. But if all gold leaving the continent is refined here on the continent, there’s a great benefit and value to that.

Rwanda may not have as much gold as other African countries but that shouldn’t stop them from creating innovative solutions that’ll help solve some of the regulatory problems the continent is facing with natural resources.

Europe and other parts of the world have been refining and trading minerals and natural resources which they don’t have for centuries.

So, why should it be a problem if Rwanda doing the same thing? Why should gold be refined elsewhere when it can be done right here on the continent?

Africa has 40% of the world’s gold but no country in Africa is on the list of top countries with the largest gold reserve. Think about that for a moment!!!

What Rwanda is doing is very commendable. They identified a problem and came up with an innovative solution to extract value from their own mineral wealth rather than just exporting raw commodities.

This is what visionary leadership is all about!

The precious metal in Africa is sometimes illegally produced and smuggled out on a vast scale, sometimes by criminal operations, and often at a high human and environmental cost.

So, the main initiative of Rwanda’s gold refinery is to combat these illegal activities by buying gold from all across Africa and processing it before exporting

The only way to stop smuggling is to have multiple refineries in Africa

Rwanda is a stable(peaceful) country and fosters a good environment for investment and ease of doing business hence the uptick in all manner of industries popping up in the country.

I think many more gold refineries and manufacturing plants should be popping up all across Africa. As a continent blessed with so much natural resources, we can only control our economy if we control our resources.

It makes no sense for the continent to keep exporting raw materials only to import them as finished products.

There is something about Rwanda that the rest of Africa can learn from. Rwanda continues to prove to the world that it’s possible to bounce back from adversity.

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