Government, through the Ministry of Energy and Mineral Development will next month hold celebrations to mark the 100th-anniversary of the establishment of the Directorate of Geological Survey and Mines (DGSM).
Uganda’s mining story dates back to pre-colonial times, but gained momentum during the British colonial administration between 1902 and 1939. The sector once earned the country millions of dollars from the 1920s to early 1970s when political and economic chaos set in, and eventually ground to halt in the 1980s. At the time of independence, the copper/cobalt accounted for 5 per cent of the value of Uganda’s exports and the mining sector generally performed modestly.
Towns such as Kasese in the southwest enjoyed the benefits of copper/cobalt and limestone mining; Tororo in the east bustled with activity of limestone and phosphate mining; Kabale and Kisoro with wolfram, tungsten, tin and beryllium, and Buhweju was a hub for gold mining. In fact, each region was famed for at least one or two minerals.
Currently, the Directorate regulates the mining sector. The commercial aspects are left to the miners i.e. they can look for the market and undertake their own mineral processing. DGSM houses a phenomenal data set. Potential uses include, but are not limited to, identifcation of mineral occurrences and deposits and characterization of deposits according to potential volume and value, determining feasibility for extraction and processing, identifcation of different hazards and risks and assessing suitability
for different mineral deposits for different products and uses.
In the Ugandan laws, the commissioner for the Geological Survey and Mines Department has several duties regarding mining licences and leases and as such has the powers of granting, transferring, cancelling, suspending and renewing mining licenses.
Officials noted that past years have seen a lot of interest in Uganda’s mining industry, with a number of commitments to spend in the exploration stages.
Government formalising the sector
According to Ministry of Energy statistics, foreign direct investment in the sector rose from Shs18b in 2003 to Shs3 trillion in the financial year 2015/2016, particularly in gold, tin, phosphates, copper mining and processing projects. This excludes new minerals exploration projects.
According to the available Information, over 90% of the mining in Uganda is done by Artisanal and Small-Scale Miners (ASMs), estimated to be more than 390,000 countrywide. It’s also estimated that the ASM subsector indirectly sustains close to 2000,000 Ugandan across its value chain both backward and forward linkages.
The mineral sector is documented to have at one point contributed close to 30 per cent of GDP in the 1960s and 1970s.
In May 2018, a new Mining and Mineral Policy was approved by the cabinet, and an accompanying law is in the draft stage – with public consultations expected this July.
The new system recognises artisanal miners as players and intends to make working conditions safer and ensure the sector contributes to Uganda’s economic development, although most of these benefits are yet to be seen on the ground.
Karamoja takes centenarian centre stage
In 2019, the government contracted a South African company – Xcalibur Airborne Geophysics to conduct a mineral survey and mapping exercise in a northeast region that may hold substantial deposits of gold, copper and other lucrative minerals.
Karamoja, a sprawling and parched area on the border with Kenya, missed out on earlier surveys because of security concerns caused by clashes between armed rival cattle-rustling tribes.
The region accounts for around 20% of Uganda’s entire landmass. Artisanal mining, mainly of gold, has been growing in the area.
“The survey will help confirm the various minerals that exist in the area, location of those minerals and estimated size of deposits among other data,” said Hanns Kyazze, communications consultant at the ministry of energy.
Why the Geological Survey and Mines Department is shining
The government is eager to boost investment in its minerals sector to ramp up output. In recent years it has attracted foreign interest in exploration for a range of minerals including cobalt, copper and iron.
The government’s objectives concerning infrastructure development, employment generation and
economic transformation are explicitly linked with the Development Minerals sector. The Ugandan
construction sector, which is experiencing annual growth of 6%, demands multiple “building
minerals” including sand, clay, limestone, marble, kaolin and sources of stone aggregate. What is
more, the sector is also a huge contributor to employment.
President Yoweri Museveni remains a keen follower of events in the mining industry and has chaired roundtables to hold discussions with different mining companies about the future of the sector.
Uganda boasts a diversity of Development Minerals that include a broad range of construction minerals including clay, sand, limestone, marble, kaolin and sources of stone aggregate and dimension stone that are essential to meeting demands of both the rapidly growing population and public infrastructure investments. Among a range of industrial minerals, sectors such as plastics production, pharmaceuticals and oil well drilling all rely on mineral inputs including salt, kaolin and bentonite, respectively. Development Minerals also include agro-mineral inputs such as phosphates, vermiculite and lime, which have signifcant potential to spur agricultural production,
counter depleting soil fertility and maintain food security.
In September 2019, DGSM purchased and installed a 3.37 cu.m Large General Purpose (LGP) Carbolite Gero Oven used for drying of geochemical samples from mineral exploration. The equipment has greatly reduce turnaround time and also reduces the risk of sample contamination since samples are no longer be dried in the open.
Directorate sources intimate that the acquisition of this equipment and other ongoing interventions, including ongoing competence development of the its laboratory staff is part of the implementation of Government strategic guideline for the mineral subsector for the medium term of putting in place a modern laboratory at the Directorate so as to be able to quantify minerals in delineated areas. Other ongoing interventions are also aimed at ISO/IEC 17025:2017 Accreditation for the laboratories, which is a requirement for laboratories providing services to exploration companies listed on International Stock Exchange.
TheUgandan website understands that large players like Australia’s Jervois Mining Limited have come into the market and the return of world-class companies like Rio Tinto. Many other companies are bringing in money in the industry, and Ugandans will cash in, especially through offering different support services to the sector.
In May 2018, Sipa announced a Farm-in and JV Agreement with Rio Tinto to develop the accelerated nickel-copper exploration project in northern Uganda, where Rio Tinto can fund up to $59 million of exploration expenditure to earn up to a 75 per cent interest in the project.
In the latest company report, Sipa quotes a total spend of more than $15 million in direct exploration costs and taxes to the Ugandan government since exploration commenced in late 2012.
And after 100 years, different financial institutions could reconsider their position of shying away from funding the mining industry. The possibility of arranging financing for the mining sector could soon be realised if the current growth in the sector is further supported.