Uganda must spend big on mineral exploration if it is to realise maximum benefit from the vast resources it has, a former minister has said.
In an interview last week, former Energy Minister Richard Kaijuka told The Observer that to attract bigger players in the sector Uganda had to first establish the amounts and commercial potential of its deposits – so as to give serious investors confidence.
“Uganda’s mineral sector is still so much on the exploration stage. What that means is that yes, we may have had aeromagnetic surveys… and therefore able to say we have potential of various minerals,” said Kaijuka, chairman of East African Gold plc, Uganda.
“But until we spend good money through exploration to define what resources of each element we have, we have a long way to go before we establish mines and talk about exporting minerals and creating wealth and employment.”
Both patience and focus are crucial at this stage, Kaijuka said. Uganda has vast mineral resources across the country, according to the Uganda Investment Authority (UIA). There are gold deposits in Arua, Hoima, Masindi, and Buhweju districts, as well as Karamoja sub-region. Karamoja has more precious stones, including limestone, uranium, marble, graphite, gypsum, and iron.
In two weeks’ time, Uganda Chamber of Mines and Petroleum (UCMP) will host the third annual mineral wealth conference, where local and international players are expected to share information and experiences on investment opportunities. Kaijuka, also UCMP’s vice chairperson, said the conference was intended to create awareness about Uganda’s mineral riches, but also woo investors into the sector.
At last year’s conference, Bridgette Rudebe, the executive chairperson of South Africa’s Mmakau Mining, said Uganda’s future was bright, describing the present period as a “a defining moment for the unique years to come”. In recent years much of the focus on the mining sector has gone to oil and gas – with Uganda warming up to start pumping crude within the next four to seven years. However, experts say there is much more to the sector than oil.
Geologist David Kyagulanyi, the director of Kweri Ltd, has said huge deposits of aluminium clays in Iganga district alone could be worth $500bn, an incredible amount, when compared to Uganda’s current GDP of $22bn. However, all this potential could take ages to realise if there is still very little investment in the sector, said Kaijuka.
“Should we focus on the [mineral] sector, the contribution could very much match what the oil sector could produce and in the long run, it could actually exceed [oil],” said Kaijuka, whose company is heavily engaged in the Karamoja sub-region.
Last year, a Chinese consortium, Tibet Hima Co Ltd, won a contract to revive Kilembe mines in western Uganda, which had been lying idle for three decades. And last month, President Museveni flagged off a $600m phosphate plant in Osukuru, Tororo district -perhaps an indicator that all is not lost for the sector.
Some Ugandans and a few firms have acquired licences to explore different places, but have no capacity to do so. Analysts say this could be a racket of speculators waiting to cash in by selling their licences to foreigners. Kaijuka disagrees, arguing that some Ugandans have succeeded in attracting serious players in the industry.
“That’s being unfair to Ugandans who smell opportunities. Everyone is free to apply for involvement in the sector. So, what is the crime of anyone saying: ‘I hear there is this opportunity, let me try’,” he wondered.
However, he agrees that those who hold licences for long without doing anything should surrender them to capable people. In future, he said, regulations in the sector would be much more rigid and stricter, so that to get a licence would be based on performance. The sector faces a lot of challenges, not least the artisanal miners’ struggle to survive, while landownership also remains thorny.
Kaijuka said government and UCMP were encouraging a situation where small miners co-existed with big companies. Yet in February, a report by Human Rights Watch (HRW) accused some big companies and powerful individuals in government of being hostile to artisanal miners and perpetuating land grabbing in Karamoja sub-region, casting a dark shadow on the industry.
In Mubende, this month hundreds of people could be evicted by one of the firms exploring for gold there, claiming they encroached on its land.
Kaijuka urges bigger miners to help smaller ones by getting them modern tools.
“That’s what is being aised of Mubende and Busitema because they [artisanal miners] also want to earn,” he said. “Land is a very big problem and my aice to Ugandans is that they must understand that we must make a decision whether or not we want to promote this sector. There is no short cut.”
He said mining companies – even for the case of Mubende – can allocate some land, where the local people carry out artisanal mining or live instead of evicting them.
At the mineral wealth conference, slated for October 1 and 2 at Sheraton hotel, such thorny issues are expected to take centre stage.
Source : The Observer