Mining in Uganda
Background to the Mineral Sector
Uganda lies within the African Plate which is a continental crust. Precambrian rocks ranging from Achaean, Lower Proterozoic to Middle Proterozoic (4500 - 600 Million Years) dominate the geology. Close to the eastern border with Kenya, lies a number of Cretaceous to Miocene (145.5 - 5.3 Million Years) intrusive alkaline carbonatite complexes. The Rift Valley contains Cenozoic (65 - 0.01 Million Years) to Recent sediments up to 4000 metres thick. These rocks are endowed with a wide variety of minerals as evidenced by past mining records and the numerous mineral occurrences in many parts of the country.
The mining industry in Uganda reached peak levels in the 1950’s and 1960’s when the sector accounted for up to 30% of Uganda’s export earnings. However, political and economic instability experienced in the country in the 1970’s and the recent global economic slowdown led the sector to decline drastically. Currently, the energy sector’s contribution to total GDP, at current prices, was the lowest in (Financial Year) FY2009/2010 with a share of only 0.3 percent. It should be noted therefore that the decline is not a result of resource depletion but rather due to the bad governance at one time but recently due to poor world prices of cobalt and copper, among others.
Uganda mineral potential remains untested due to very little exploration to date - the country has the potential to host gold, tantalite, copper and cobalt potential.
The period after 1986 has been marked by a favourable business climate in Uganda and many mining companies have taken up licenses in the mining sector. Over the last ten years the sector has been growing positively with growth rates peaking 19.4% in FY 2006/07. In FY 2009/2010, the sector grew by 12.8%. In terms of licenses taken, in 1999 there were 66 licenses issued in the exploration and mining license categories combined; by the beginning of 2010 there was a total of 517 licenses issued. gives a breakdown of the categories of these licenses between January and December 2009. Table 1: Mineral Licensing Status January – December, 2009
These licenses cover the entire country but are generally concentrated in the more prospective areas in southwest and southeast Uganda. The fact that parts of north and central Uganda are to some extent under forest cover and at the same time have thick soils as a result of tropical weathering, limited geological data render them not conducive for mineral investment.
In May 2004 the government of Uganda announced that it aims to inject $42m in the restructuring and development of the mineral sector to double its mineral exports. The Government is planning to develop a comprehensive five-year Mineral Sector Development Programmes to address constraints that have hitherto hindered the sector's progress. In July of the same year the government announced that it would invest sh9b in development of roads and power lines linking mineral deposits to ease transport and enhance production for export. The projected revenue from these strategic areas is estimated to be sh145b.