Uganda’s government has established a national mining company to manage its commercial holding and participating interests in mining operations, according to the East African nation’s minister for energy and mineral development.
Ruth Nankabirwa announced the move on Tuesday at a mining conference organized by the Uganda Chamber of Mines and Petroleum in the national capital, Kampala.
“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,” Nankabirwa stated.
Previously, licensed private firms had been in charge of all mining activities in Uganda. In 2022, the government approved a new law that allows for the establishment of a state-owned corporation as part of Kampala’s efforts to increase its mineral reserves. The legislation, which allows the government to take a compulsory stake of up to 15% in all mining operations in the country, also introduced a competitive licensing regime for extraction projects.
According to information on the Uganda Investment Authority, the landlocked state has large underexploited mineral deposits of gold, oil, high-grade tin, tungsten, salt, beryllium, cobalt, kaolin, iron ore, glass sand, vermiculite, phosphates, uranium, and rare earth elements.
Ugandan President Yoweri Museveni and his government have been encouraging sector investors to process minerals domestically to add value, rather than exporting them in a raw state.
The country opened its first tin refinery in its second-largest city of Mbarara in April by mining company Woodcross Resources. The firm processes tin ore to 99.9% purity. Earlier this year, Chinese-backed Sunbird Resources was granted a 21-year large-scale license to mine limestone for cement production in Uganda’s northeast region of Karamoja. Last October, Australian mineral exploration company Ionic Rare Earths also secured a permit for its rare earth project in the African nation.
Kampala exported gold worth $2.3 billion in 2023, compared with $201 million in 2022, despite US sanctions on a major processor in the mineral-rich country, Reuters reported earlier this year, citing Bank of Uganda data.
In 2022, Washington imposed sanctions on Belgian businessman Alain Goetz and a network of companies linked to him, including African Gold Refinery, one of Uganda’s largest gold processors. The US Department of the Treasury accused Goetz of engaging in the “illicit movement” of gold from the Democratic Republic of the Congo, which funds armed groups threatening the Central African nation’s security. Goetz denied the allegation.