Uganda Creates State-Owned Mining Company

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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Uganda is hoping to rapidly grow its mining sector by establishing its first state-owned mining company to oversee the government's interests in mining operations.

The East African nation is aiming to emulate the growing success of its neighbor Tanzania by putting in place a regulatory system to attract outside investors. The new National Mining Company gives the government a free 15% stake in all mining operations in the country and the option to invest beyond that to a 35% level. Speaking at a recent mining conference, Ugandan Minister of Energy and Mineral Development Ruth Nankabirwa Ssentamu told Reuters: "This company will manage the state's commercial interests in the mining industry. It will do so through strategic partnerships with young developers in the private sector." Today, mining contributes 2.2% to the country's GDP, but the government wants to accelerate the rollout of large-scale mining to take advantage of its mineral wealth and boost that figure to 10% by 2040. That would take its GDP contribution from US$55 billion in 2022-23 to US$500 billion by 2040. Mining currently contributes more than 10% of GDP in Tanzania.

Uganda has notable commercial-scale deposits of 27 key minerals, including deposits of gold, copper, high-grade tin, tungsten/wolfram, salt, beryllium, cobalt, kaolin, iron ore, glass sand, vermiculite, phosphates, uranium, and rare earth elements. The government introduced a new Mining and Minerals Act in 2022, creating new classes of mineral rights that can be acquired by developers: large-scale, medium-scale and small scale mining licenses as well as artisanal mining licenses. Other measures include tax breaks and exemptions from import and export tax in certain cases. The creation of small-scale licenses and artisanal mining licenses is designed to formalize both sectors, which are presently unregulated and account for most of the country's mining in certain sectors, including gold. This summer, the government published exploration surveys that estimated vast gold deposits of around 31 million tonnes. Of that, more than 320,000 metric tonnes was classed as refined gold, with an approximate market value of $12.8 trillion.

A license for the production of part of the gold deposit has been granted to China's Wagagai Gold Mining Company (Kampala, Uganda), which is operating a mine in the Busia region. Industrial Info is tracking a US$60 million expansion project by the company. Subscribers to Industrial Info's Global Market Intelligence (GMI) Project Database can click here for the report.

Other international companies that have been awarded licenses recently include China-backed Sunbird Resources and Rwenzori Rare Metals Limited, backed by Australia's Ionic Rare Earths Limited (Melbourne). They were the first to receive new 21-year large-scale class mining licenses. Sunbird is planning to construct a 6,000-tonne-per-day clinker line and 1 million-tonne-per-year cement factory in Rupa Sub-County, Moroto District, following the discovery of 67 million tonnes of clinkerable limestone reserves. Ionic's license covers its mining Makuutu heavy rare earths project, which the company estimates has a mineral resource estimate of 617 million tonnes of ionic adsorption clay deposits, made up of more than 70% magnet and heavy rare earth content. A demonstration plant has been running successfully, and a larger operation is planned.

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