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Unearth Uganda’s mining potential

Interview - June 25, 2014
Uganda is endowed with a wide variety of minerals. Edwards Katto Kagimba, Commissioner of the Geological Survey and Mines Department of Uganda, speaks to United World about the history and development of the mining industry and investment opportunities for foreign investors in minerals
As the Commissioner of Geological Survey and Mines Department of Uganda, could you give to us an overview of the mining sector and exploration potential?

Uganda is surrounded by a lot of rocks that have been subjected to geological events, some as far back as 2.5 million years ago (maybe longer). The overall geology has acted on the rocks to mobilize the minerals in the earth’s crust. When mining activity started in Uganda, the British immediately set up the Geological Survey (GS) in 1918. The first mining exploration began around 1924. The British were particularly interested in the minerals that they could easily mine and take back to their country to promote their industries, especially tin, tungsten and gold. Mining exploration has been around since the early 1920's to date. By the mid-60's, mining contributed a third of the national GDP. The other top products were cotton and coffee (which were major Forex earners). In the 70's, however, there was political turmoil. There was a military government. Most foreign expatriates had to leave the country (especially those operating on the copper mine in Kilembe), and this hurt the mining industry. In 1986, when the new government came in, they found it necessary to revive the mining industry. However, they found that they did not have a Mineral Policy, so they put it in place to identify some of the constraints in the sector. One constraint was the lack of scientific data that could be packaged and marketed to companies, so they could bring in money and do some further exploration.

Most of the infrastructure was destroyed in the civil war, including processing facilities and labs. We really needed the infrastructure to handle the mining sector. The only solution was to seek funding, and support for infrastructure, human capacity, and acquire data that we can package and market. After all, the government should do exploration, and the investors should do the funding and the development of the mining operation.

The government acquired a loan from the World Bank (WB) in Washington and another loan from the Nordic Development Fund (NDF), and a grant from the African Development Bank (ADB). That project began in 2004 and ran for five years. We carried out an airborne geophysical survey (AGS) for 80% of the country. A lot of data was collected. This data has been packaged and used. It has benefitted a lot of people looking for areas for mining exploration.

During the project, we also trained a lot of geoscientists. Most of them were recruited here. They are degree holders. A lot were sent abroad to study in Canada, Australia, or London to get their Master’s and Doctorate degrees. In 2004, we had almost 200 licenses exploration and mining. Now, we have almost 870 licenses for exploration and mining.

Even some of the old mines that closed in the 70s have been revived. A Chinese consortium, Tibet Hima Co. (THC), for example, now runs the Kilembe Mines. While the mine still remains as government property, THC will be in charge of it for 25 years, before turning it over to the Ugandan government.

What other products come from the mining industry in Uganda?

We have other mining activities such as cement mines in Tororo (near the border of Kenya) and Hima, where we also have cement factories; we also have tin, wolfram, and the production of clay products (mostly medium scale).

We also produce vermiculite. It is being exported to the UK for final processing. As such, the beneficiation is done outside the country.
What can you tell us about the progress about the WB project?

Under this WB program, we have done a lot of data acquisition. We have been able to identify 16 target areas that we are looking to promote. They are earmarked for certain mineral types. They have a lot of potential. For instance, area no. 2 here is rich in gold.

The role of government is to identify promising areas and attract investors with the means to carry out more detailed exploration and development.

So when an investor comes, and he wants to do some investigation, we can minimize his risk and expenses because we have done the preliminary work. There is a starting point.

We have also identified some about 10 uranium targets. We have to think about generating power instead of depending on hydro power. We are inviting foreign investors who can come and help us develop these deposits.

Are you also marketing these areas abroad?

Yes, we are. When we go to Toronto or Cape Town, we always market them. We would like to invite investors to develop these uranium targets. Of course, like I have said before, we shall have policies in place, bearing in mind the marketability and versatility of this product.

What does the mining industry in Uganda need most at the moment in order to sustain its remarkable progress?

We would like to look into value-addition. Right now, most of the gold we produce is exported in its raw form. It would really be beneficial if an investor decided to put up a gold refinery in the country. Being able to export the finished product would have a very positive impact on the economy. As it is, when we export things in their raw form, the government loses a lot of revenue.

The same goes for iron ore. We used to export iron ore and we import steel products, which are very expensive. They only recently put a ban on the export of raw iron ore. If we can process our own raw materials, it would be better.

Is there a policy in place to address this gap?

Yes, there is. We are working on it, particularly, with regards to the borders policy. We also need to work on monitoring these areas. At the moment, we plan to develop more plants, to be able to create quality products that we will be able to especially in the eastern-most corner. We have marble. We have already licensed two companies who will begin operations here. We hope that with this kind of supply, we should have enough cement in the country. We have Lafarge from France managing the cement operations in Hima, and the Tororo cement operations managed by Indians. As you can see, value-addition requires a lot of money, and we have yet to equip the locals to do that. Some of them get loans, which they may have a hard time paying back.29.44

Where can people find out more information about doing business in the mining industry in Uganda?

We have a website that is updated regularly, and a lot of information can be found there. We also attend conferences and conventions in different countries where we share information about the different policies and incentives that we have in place.