By Staff Writer
In a drastic move aimed to control gold mines, Uganda has announced a new levy of U$200 per kilogram of refined gold on export and also banned the export of non-refined gold.
The development comes after the Mining and Minerals (Export of Refined Gold) Regulations 2024 became effective on May 24, 2024, and after two meetings between the Gold Refiners Exporters and Dealers Association, represented by their lawyers, the Kampala Associated Advocates (KAA), and President Yoweri Museveni about the future of the sector.
The newly gazetted instrument comes at a time when the previous statutory regulation expired on June 30, 2023. Unlike its predecessor, the new law mandates that all exported gold must meet an international purity standard of 99.9%.
This measure aims to ensure value addition within the mining industry, aligning with Uganda’s broader policy on enhancing the value of its natural resources.
Uganda is rich in essential mineral resources, which could drive its transition to a green economy boasting of large deposits of gold, uranium, limestone, marble, graphite, iron, copper, and cobalt, among others.
While these minerals significantly boosted Uganda’s economy in the 1950s and 1960s, contributing up to 35% of export earnings, the mining sector’s contribution has now dropped to below 3%.
In 2021, the sector accounted for 2.3% of Uganda’s GDP, according to the Ministry of Finance.
This decline is partly due to the export of unprocessed minerals, the prevalence of artisanal miners, especially in gold mining areas like Buhweju and Mubende, as well as the influence of foreigners, government insiders, illegal miners, and smugglers.
In December last year, the Minister of Energy and Mineral Development, Ruth Nankabirwa, signed a new regulation setting higher purity standards for tin exports.
This initiative backs President Museveni’s directive to stop exporting unprocessed minerals, including tin.
The new regulation raises the minimum purity level for tin exports to 99.85%, up from the previous range of 67% to 70%. This is expected to significantly impact Uganda’s tin mining and processing industry.
New geo-data shows that Uganda has large underexploited mineral deposits of gold, oil, high grade tin, tungsten, salt, beryllium, cobalt kaolin, iron ore, glass, glass sand, vermiculite, phosphates, uranium and rare earth elements.
The different mineral deposits in Uganda include gold, cobalt, graphite, limestone, iron, uranium, copper, and marble.
Uganda has close to 27 mineral types in commercially viable quantities including iron ore, gold, copper, cobalt, uranium, marble, limestone, phosphates and graphite, among others. In the 2022 /2023 financial year, mining contributed 2.2% to the national GDP, according to data from the Uganda Bureau of Statistics.
According to Maks advocates, Uganda is a mineral rich country with vast deposits of gold, uranium, limestone, marble, graphite, iron, copper, and cobalt, among others.
Whereas its mining sector once accounted for 30% of the country’s export earnings in the 1950’s and 1960’s, today the sector’s contribution is about 0.8%. This decline has been attributed to a weak legislative framework to award, protect and enforce mineral rights; a significant informal mining sector; a paucity of foreign investors; environmental degradation; and human rights abuses.
To boost the mineral sector, the Government of Uganda introduced a new mining and mineral policy in 2018 whose goal is to develop the mining industry through increased investment, value addition, national participation, and revenue generation.
The policy was followed by the recently passed Mining and Minerals Act, 2022 (the “MMA”) which came into force on13th October 2022, replacing the Mining Act, 2003. The MMA aims to fill the gaps identified in the repealed law to align Uganda’s legislative framework with global trends.
