Sources: , AMHOF.
Uganda possesses an abundance of critical mineral resources, such as gold, uranium, limestone, marble, graphite, iron, copper, and cobalt, which hold significant potential to facilitate the nation’s transition to a green economy. These resources were instrumental to Uganda’s economy in the past, contributing up to 35% of the country’s export earnings during the 1950s and 1960s. However, the mining sector’s contribution has diminished markedly, falling to below 3% and accounting for only 2.3% of Uganda’s GDP in 2021, as per the Ministry of Finance. This decline can be attributed to several factors, including the export of unprocessed minerals, the prevalence of artisanal mining, and issues related to illegal mining and smuggling.
In response, the Ugandan government, under President Museveni, enacted a ban in 2015 on exporting unprocessed iron ore and other minerals. This measure aimed to stimulate local industry growth and create job opportunities. Despite this, the mining sector’s contribution has not returned to its former prominence, partly due to inadequate legislative support. In an effort to revitalize the sector, the Ugandan Parliament passed the Mining and Minerals Bill, 2021, leading to the Mining and Minerals Act, 2022. This legislation focuses on value addition and seeks to leverage Uganda’s natural resources more effectively.
Irene Batebe, Permanent Secretary for the Ministry of Energy and Mineral Development, emphasized the benefits of processing minerals domestically. She highlighted that value addition could significantly enhance employment opportunities, with a typical mine employing between 3,000 to 5,000 Ugandans, and facilitate the provision of goods and services related to mining. The government is supporting companies that are moving towards value addition and is preparing to launch a tin processing facility in Mbarara, which will refine tin to over 99% purity. This initiative is part of a broader strategy to process other minerals like rare earth elements and copper domestically.
To reinforce this direction, the Minister of Energy and Mineral Development, Ruth Nankabirwa, introduced new regulations to increase the minimum purity level for tin exports to 99.85%. This move is expected to transform Uganda’s tin mining and processing industry significantly. Tin is extensively mined in western Uganda and is used in various applications, including soldering, plating, and as a component of various alloys.
The emphasis on value addition represents a strategic pivot towards maximizing the benefits derived from Uganda’s mineral wealth. This approach not only aims to boost revenue from mineral exports but also to build domestic manufacturing capacities. For instance, companies are being encouraged to produce transformers using locally processed copper. This policy is expected to generate employment opportunities and support the private sector in achieving value addition goals, which are central to Uganda’s mining and minerals policy and legislation.
Moreover, Uganda is investing in capacity building for its mineral experts, geoscientists, and economists, in collaboration with the Africa Mineral Development Centre of the African Union. This initiative aims to enhance the country’s ability to classify and estimate its mineral and energy resources more accurately. The Ministry of Energy is also finalizing an exploration program to quantify the country’s mineral wealth, thereby informing future mining and processing efforts.
This strategic focus on domestic value addition and processing, mirrored by similar policies in countries like Nigeria, underscores a significant shift from the traditional export of unprocessed raw materials. By prioritizing local processing, Uganda is poised to fully harness its mineral resources, stimulate industrial development, and achieve sustainable economic growth.
