Mineral Legislation
The Mining Act 2003 repealed and replaced the Mining Act 1964, Cap. 248, with a new legislation on mining and mineral development, which conforms, and otherwise gives effect, to the relevant provisions of the Constitution; to vest the ownership and control of all minerals in Uganda in the Government. The Act also provides for the acquisition of mineral rights; and other related matters. Subject to the provisions of this Act, a person may acquire the right to search for, retain, mine and dispose of any mineral in Uganda by acquiring such right under and in accordance with the provisions of this Act.
In order to operationalise the revised Mining Act, new regulations were introduced in 2004. They contain procedures/application forms for acquiring the various licences like: prospecting, exploration, retention, location, mining lease, export/movement permits, mineral dealer’s license, Goldsmith’s license, certificate of amalgamation of location/mining lease, certificate of cessation/suspension/curtailment of working obligations, among others. Applications for these licenses are made to the Commissioner, GSMD and in many instances through the Office of Chief Administrative Officer at the district level.
Other important laws enacted by the Government of Uganda that affect mining and exploration, besides the Mining Act 2003 and Mining Regulations 2004, include:
• The National Environment Act 2003
• The Land Act 1998 (currently under revision)
• The Land Regulations Act 2004
• Registration of Titles Act 2000
• Contracts Act 2000
• The Arbitration and Conciliation Act 2000
Licensing regime
Licensing for exploration and mining activities follows same procedures. It involves filling of forms available at the office of the Commissioner of the Department of Geological Survey and Mines (DGSM) and submitting them for assessment, paying assessment fees to the bank, getting a Uganda Revenue Authority (URA) receipt invoice, and then submitting it to the Commissioner for granting the license.
Types of mineral rights:
• Prospecting Licence - the licence is granted to the holder to prospect for minerals around the country and the licence is non-exclusive. It is granted for one year and is not renewable.
• Exploration Licence - the licence area is to a maximum of 500 sq. km and duration of 3 years, renewable for two terms of 2 years each. On each renewal, half the area is relinquished.
• Retention Licence - the licence is a new feature in the law. It is granted to the holder of an exploration licence in cases when the identified mineral deposit cannot be exploited due to economic reasons. Its duration is 3 years, renewable once for 2 years.
• Mining Lease - the licence is for mining operations and is granted for 21 years and is renewable for 15 years.
• Location Licence – the licence is for mining operations of a smaller investment where expenditure to achieve production will not exceed 500 currency points (a currency point is worth 20,000 Uganda shillings). It is granted to citizens of Uganda or in case of corporate, only where citizens of Uganda hold at least 51% of ownership. Its duration is 2 years, renewable for other terms of 2 years each.
Royalties - All minerals obtained from any mineral right are subjected to royalty payment for example: precious stones - 10% of the gross value, precious metals - 5% of the gross value, base metals and ores - 5% of the gross value, and industrial minerals vary from 500 to 10,000 Uganda shillings per tonne.
Adequate Compensation - the law provides for fair compensation upon disturbance of surface rights of landowner or lawful occupier.
Mineral Agreements – the law provides that the investor and government sign agreements relating to operations in order to stabilize legal, social and economic obligations of either party.
Environment - the law has provisions on environment protection peculiar to mining operations.
Taxation: Due to unique nature of the sector, a variable-rate income tax that ranges from a minimum 25% to maximum 45% has been put in place based on the level of profitability of a particular project in the sector.
