Uganda sets up state-owned firm to take stakes in mining operations

Kampala, October 2 –Uganda has formed a state-owned mining company to manage the government’s equity interests in mining operations, minister for energy and mineral development, Ruth Nankabirwa, said.

All mining activities in this country have previously been done by private firms after obtaining exploration and mining licenses.

Under a new mining law approved in 2022, the government can compulsorily take a 15% free carry stake in all mining operations in the country.

The move is part of broader efforts to expand Uganda’s share of the value from its mineral wealth, following in the footsteps of other African countries such as Tanzania.

“This company will manage the state’s commercial interests in the mining industry. It will do so through strategic partnerships with young developers in the private sector,” Nankabirwa told a mining conference in Kampala on Tuesday.

President Yoweri Museveni’s government has also been pushing investors in the sector to process minerals and add value domestically instead of exporting them in raw form.

In April, Uganda launched its first tin refining company by mining firm Woodcross resources, which refines tin ore to 99.9% purity.

Chinese-backed Sunbird Resources has also been licensed to mine limestone for cement production in Karamoja region in Uganda’s northeast region, while Australia’s Ionic Rare Earths has been licensed to mine and process rare earths.

Ugandan geologists say the country has large deposits of a range of minerals including gold, cobalt, copper, iron ore, rare earths, among others.