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Uganda to set up State mining firm, take equity in licences

21st February 2023

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The Ugandan government has started to set up a national mining company that will aim to take equity stakes of up to 15% of all medium and large-scale mining operations in the country, the minister for energy and minerals said on Tuesday.

Ugandan geologists say the country has large deposits of a range of minerals including gold, cobalt, copper, iron-ore, rare earths, vermiculite and phosphates. The country is also aiming to start pumping crude oil in 2025 from fields in its west.

The establishment of a state-owned mining firm and commercial state participation in the sector are part of wide-ranging reforms under a new mining law enacted last year.

The new company will be called Uganda National Mining Company, minister Ruth Nankabirwa Ssentamu said in a statement.

"State equity participation will be in medium and large-scale mining of up to 15% participatory equity interest at no cost to the government," she said.

The State-owned firm will help the government get as much value as possible from minerals, Ssentamu said. She did not say when the government would complete setting up the company.

Under the new law, all mining licences are to be awarded on a competitive bidding basis as opposed to the previous 'first come, first serve' criteria, she said, adding that applications would be filed online, a move that would improve efficiency and transparency.

Last year, Uganda said aerial exploration, followed by geophysical and geochemical surveys and analyses, had showed the country had an estimated 31-million tonnes of gold ore, from which an estimated 320,158 tonnes of refined gold could be extracted.

Edited by Reuters

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