Rajesh Exports Ltd. (RJEX), India’s largest jewelry maker and exporter, said it may invest as much as $1 billion in Rwanda over the next five years developing the country’s gold industry and building a diamond-trading business.
The company, based in Bangalore, India, is in talks with Rwanda’s government about proposals that include establishing a gold refinery in the East African nation within six months, Ravi Chandra, the company’s chief executive officer for mining, said in an interview on May 10 in Kigali, the capital.
Most of the gold mined in Africa is currently exported to South Africa or Europe for processing, Chandra said. Rajesh Exports is seeking to make Rwanda a continental hub for gold processing over the next three to five years.
“Our aim is to try to bring the gold from most of Africa to Rwanda,” Chandra said.
Rwanda is seeking to diversify its economy as the country recovers from a genocide in 1994 in which 800,000 ethnic Tutsis and moderate Hutus were killed in a 100-day slaughter that left a 10th of the population dead. The East African nation, which makes most of its foreign currency from tourism and the export of coffee, doubled the size of its economy in the nine years to 2010, according to the World Bank.
Rajesh has begun exploring a 2,000 square-kilometer (772 square-mile) gold concession in Rwanda that it wants to increase to 15,000 square kilometres, Chandra said. Eventually the company plans to export products including jewelry and coins. It also intends to set up a diamond business that may involve importing and exporting the gems as well as cutting and polishing, he said, without providing further details.
Rwanda produced 20 kilograms (705 ounces) of gold in 2009, according to the website of the U.S. Geological Survey. Diamonds aren’t mined in the country.
Talks between the company and the Rwandan government are “still very exploratory” and may take six months to complete, Clare Akamanzi, chief operating officer of the Rwanda Development Board, said in an interview on May 9. The projects envisaged by the company may cost $500 million to $1 billion, she said.
Rajesh Exports is also working with the Rwandan government to establish a legal way to import gold from neighboring Democratic Republic of Congo. In March, Rwanda banned the purchase of so-called conflict minerals including gold, tungsten, coltan and tin from Congo after the U.S. passed a law aimed at halting the trade.
The Dodd-Frank law will require American companies to report any purchases of gold, tin, tungsten and tantalum that might have come from conflict zones in Congo, according to a draft of the regulations on the U.S. Securities and Exchange Commission’s website. Fighting has raged in eastern Congo for more than 15 years and armed groups often support themselves by taxing or trading in minerals.
“We are hopeful to find a legal solution,” Chandra said.
Minerals can only be legally imported into Rwanda if they are tagged and certified “conflict-free,” Forestry and Mines Minister Christophe Bazivamo said on April 27.
Congo produced 3,300 kilograms of gold in 2008, the latest data available on the U.S. Geological Survey’s website.
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