Interest in Uganda’s mineral potential has been increasing substantially since the country has made efforts to improve its mining and investment code. The mining industry in Uganda reached a peak in the 1950’s when mining accounted for up to 30% of the country’s exports. Revenues from mining increased 48% between 1995 and 1997. Uganda mineral potential remains untested due to very little exploration to date – the country has the potential to host gold, tantalite, copper and cobalt potential.
Small deposits of placer tin occur in southern Uganda and in southwest Uganda, tungsten mineralisation is found in two main zones, as wolframite and ferberite in quartz veins associated with graphitic shales, and as wolframite in beryl-bearing apatites.
Uganda also has a large columbium-tantalum resource associated with the countrys carbonatite intrusions, notably at Sukulu in eastern Uganda where pyrochlore occurs in eluvial soils. Gold is mined by artisans and on a semi-commercial basis at a variety of locations but production is difficult to quantify.
In May 2004 the government of Uganda announced that it aims to inject $42m in the restructuring and development of the mineral sector to double its mineral exports. The Government is planning to develop a comprehensive five-year Mineral Sector Development Programmes to address constraints that have hitherto hindered the sector’s progress. In July of the same year the government announced that it would invest sh9b in development of roads and power lines linking mineral deposits to ease transport and enhance production for export. The projected revenue from these strategic areas is estimated to be sh145b.
In September 2004 the Ugandan government scrapped import and COMESA duties on limestone and other raw materials used to manufacture cement. According the Finance Amendment Bill 2004, the items will carry no tariffs from the original duties of 4% and 7% respectively.
All mineral rights are vested in the Government and the exploration and exploitation of minerals can only be carried out by granting of one of the following licences.
Prospecting Licence (PL)
A Prospecting Licence is a prerequisite for any mineral exploration activities and can be granted to any individual or agent of a company. The licence is granted by the Commisioner, Department of Geological Survey and Mines on the payment of a prescribed fee. The licence is valid for a period of one year and can be area specific or mineral specific.
Exclusive Prospecting Licence (EPL)
An EPL can be issued with the authority of a PL, whereby an area can be pegged up to a maximum area of 20.48 square kilometers. The Minister may also grant a Special Exclusive Prospecting Licence (SEPL) for a minimum area of 76.8 square kilometers. Both the EPL/SEPL can be area or mineral specific and is valid for one year and is renewable upon application and subject to a performance review.
A developer may peg an area and apply for a mining license either as a Location or Mining Lease. A Location Lease is generally issued for small scale operators and is limted to a maximum area of 16 hectares and is valid for one year (subject to renewal). A Mining Lease is granted for areas not exceeding 256 hectares and is valid for a period of up to 21 years (renewable, depending on programme).
Mineral Dealers Licence
This licence is granted by the Commisioner and is valid unitl the 31 December of the year of issue. It allows one to purchase, process and trade is specific mineral/s.
A permit is required to utilise any natural water resources for mining purposes. With the exception of gold, a royalty shall be paid for all minerals extracted. However, the Mining Act is undergoing revision, with some of the major propsosals including increasing the duration of licenses, size of exploration areas and lower royalty rates.