´╗┐’President Museveni’s Aisors Misleading Him On Value Addition’ [interview]

Sasiirwe Jonny is the National Chairman of the Artisanal and Small Scale Miners Association in Uganda. He has been involved in mining for over 26 years and owns the Kasita Mining Company in Mubende District. He talked to Oil in Uganda about working in an industry that he joined at the age of 24, shortly after the NRM regime came to power through a guerrilla war that he took part in.

What is the difference between artisanal and small scale mining?

The difference is that artisanal miners use sticks and axes to work while small scale miners use some better equipment like tractors and bulldozers. But in Uganda, there isn’t a big difference.

There is a location license that can be issued to small scale miners where the requirement is that you must invest 10 million shillings. Now if you look at 10 million shillings in terms of equipment, one can only buy a generator and some few other things making his operation so limited.

The investment is very small to make viable business. So you find that they (government) want to give you the license but also make you very poor. For instance when you go to the Mubende mines, by law, the equipment they are using is illegal because it is a little bit mechanised yet they (government) do not want you to mechanise anything. You cannot give me a license then you limit me on how much money I should invest in the mine if you want me to make money.

I have proposed to government to consider issuing artisanal licenses, small scale licenses and large scale licenses so that the difference is clear.

As the National Chairman, what does your job involve?

I was elected in 2001 and since then, there has never been any meeting or election that has taken place. The Association does not collect money from people so it means there is no way it can function as an association without resources. But what I have been trying to do is use my own resources to reach miners in Karamoja, Busia, Mubende and some parts of Ankole who want our support.

How many registered members do you have?

We tried to register but it was difficult. An artisanal miner who is in Busia has been doing that job for 20 or 30 years and does not really see your role or what you are going to improve in his life. So even if you go to government and talk about artisanal mining challenges, he is not concerned. By the way, a number of artisanals do not even want to be registered.

If you go to Bushenyi, mining is seasonal if it is a dry season they will mine and if it is a rainy season they farm. You can reach there and find nobody in the mines. They will only return to the mine when they have finished their harvest. Others will even go to the mines at 10 a.m. and leave by 1 p.m., unlike some miners in Mubende and Busia who rely on mining as full time jobs.

So what sort of issues do you help artisanal miners with?

Mostly it is conflicts with the license owner.

The artisanal miners claim the license holders are not doing anything…

There are many speculators. People normally acquire licenses thinking that they are going to get investors. You find that people have very big licenses but they cannot develop them because even taking one sample of soil costs about $50. Now if you have a license that is 200 square kilometre, it will be costly.

I normally tell the owners of the licenses that artisanals are the sniffer dogs who will do a lot of work for you because there is no way you can walk each metre of the license. A lot of gold has been found by local people and artisanals.

For me I use the artisanals a lot on my licenses. I take my samples to the communities and they will tell you that they know areas that have such kind of soils.

What are your thoughts on value addition?

Adding value on a mineral is very difficult in most cases. For instance, if you are going to add value on Tungsten, the power in terms of electricity you need, Uganda cannot produce it. Then even the quantity of raw material that you need to produce, Uganda does not have it. In the whole world there are only three smelters, two for Tungsten and one for Tantalum. So you can see how impossible it is even if you wanted to do it locally.

But for Gold, it can be easily turned. You can turn gold into wedding rings but you find that the value which you have added on is really small. The people who want a lot of gold like the Indians, will force you to sell it as it is.

This gold that you see is sold at international prices so why would one bother making a ring? You will have entered into another business of expensive jewellery which is complicated and needs a lot of money. Personally I do not think you can add value. Maybe it is not even necessary because if you change one kilo of gold into jewellery it will be about $200,000. Where will you get buyers from in Uganda?

At times the President also talks innocently because he does not know it is not possible. He thinks for the case of iron ore, everybody can bring a smelter which is not possible. His Aisors fear him so they do not aise him properly. Now for example how many years has he talked about adding value to coffee? How many instant coffee factories do we have in Uganda? Zero. This is because if you look at Uganda, how many people drink coffee? You cannot add value on something you do not use yourself.

What are some of the challenges that you have encountered in mining?

Mining has a lot of challenges and it needs a lot perseverance because it is not a get-rich-quick business. You can find a lot of gold at one time then take up to three months to be lucky again.

There are a lot of challenges especially relating to inadequate capitalisation and lack of support from government, but if you are focused you can continue with your business and thrive.

When you look at the so-called ‘companies’, there is no difference between them and us. There maybe 3000 licenses but how many mines are operational on international standards? None. Yet when you look at Uganda’s production data, artisanal miners produce about 4 tonnes of gold a year and maybe 50 tonnes of Tantalum. That is why one time the United Nations put a ban on Ugandan gold. They thought we were smuggling gold from (Democratic Republic of) Congo because we do not have a big mine here. So if there is no big mine, where is all the gold coming from? When you travel all over Uganda, you will find artisanal miners who are producing this gold.

But some of the gold was being smuggled in from Congo…

Very little, and by the way I don’t call it smuggling, I call it trading. There are even people who take gold from Uganda to Kenya.

Well it is smuggling because it goes across the border undeclared

At the border in Busia they do not even know that it is gold and at times when you declare it to the border officials they can steal it from you. So why do we need to do that?

For me I think it is pure business because if I take gold to Kenya, I buy Kenyan products which are taxed when I return. So where is the problem? This gold being smuggled from Congo is because the banking system there has collapsed and if one has his gold, it is as good as having dollars. Normally once in Kampala, they sell it to Indians and then go straight to Arua Park and buy five trucks of merchandise which will be taxed upon return to Congo.

What is in Congo is that the United Nations are also buyers of gold and are trying to cut off competition.

Questions put by Beatrice Ongode and Chris Musiime

Source : Oil in Uganda


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