Mining sector in Uganda

Uganda’s mining sector presents great potential for UK companies. In 2012, the government acquired geoscientific data in over 80% of the country.

Market overview

The mining industry in Uganda is under the oversight of the ministry of energy and mineral development was at peak levels in the 1960’s when the sector accounted for up to 30% of Uganda’s export earnings. However, political and economic instability experienced in the 1970’s and the recent global economic slowdown led to drastic decline in the sector. The decline was not a result of resource depletion.

With a favourable business climate in Uganda for over 2 decades, 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. 

These licenses cover the entire country but are generally concentrated in the more prospective areas in southwest and southeast Uganda.

Mineral resources have been identified and are already being informally mined in the different parts of the country areas; there are several mineral potential formations most especially gold in the Karamoja region and other areas, copper in Kasese, extensive marble formations in Eastern part of the country (Moroto), phosphates in Tororo and huge deposits of iron ore in central Uganda. New iron smelting factories are being set up and government’s negotiation for iron ore mining is underway and commercialising the mineral is key government priority for this year.

Key opportunities

The Mining Sector presents opportunities that are metallic and non-metallic minerals which investors can prospect and mine. Recent geo surveys and mineral resources assessment under Sustainable Management of Mineral Resources Project (SMMRP2012) identified potential mineral target areas for exploration and development that include:

  1. Limestone, P, Fe, Ti, vermiculite and REE in Eastern Uganda

  2. Ni, Cr, PGE, Fe potential in Masindi Karuma Falls area

  3. Diatomites in Pakwach area – Diatomites have been formed in the Quaternary beds of the Western Rift, on the western side of the Albert Nile.

  4. Kaiso kaolin and bentonite clays

  5. Mayuge iron ores – There are ironstone prospects outside the town of Jinja in Lake Victoria .The iron content is quite high, about 70% Fe but so is also the P2O5 content (1-2%).

  6. Gold Potential in:

    • Kitaka –Buhweju area, West Nile – Arua – It has been postulated that the Kilo-Moto gold fields in the DRC extend to Uganda, since similar Archaean greenstone formations have been observed in the West Nile.

    • Kaliro-Ivukula gold in quartz veins – In the south Eastern Part of Uganda (Kaliro) gold has been detected in weathered outcrops of Archaean gneisses in connection to quartz and dolerite veins with indicative grades of up to 2 ppm gold.

    • Hoima area stream sediment survey (gold potential)

  • Exploration and development that include:

    • Limestone, P, Fe, Ti, vermiculite and REE in Eastern Uganda

    • Ni, Cr, PGE, Fe potential in Masindi Karuma Falls area

    • Diatomite in Pakwach area – Diatomites have been formed in the Quaternary beds of the Western Rift, on the western side of the Albert Nile.

    • Kaiso kaolin and bentonite clays

    • Mayuge iron ores – There are ironstone prospects outside the town of Jinja in Lake Victoria .The iron content is quite high, about 70% Fe but so is also the P2O5 content (1-2%).

    • Gold Potential in: Kitaka –Buhweju area

    • Marble resources in Eastern Uganda (Moroto area, Karamoja)

    • Kimberlites in South East Uganda

    In addition to above, mineral resources have been identified and are already being informally mined in the different parts of the country areas. There are several mineral potential formations most especially gold in the Karamoja region. The most potential are the extensive marble formations in Eastern part of the country (Moroto) and other occurrences in the north.

    Studies by the Geological Survey of Uganda indicate that northern complexes host mineral commodities which could prove to be economically exploitable, such as limestone, phosphates, vermiculite, iron-titanium ores, REE minerals and base metals.

    Other opportunities in the area include:

    • Supply of mining services such as drilling, airborne geophysical surveys; or refining. This also includes supply and/or hiring of equipment for large and small scale miners as well as contract mining.

    • Infrastructure development- Roads

    • Establishment of Capacity building centres of human resources to handle geoscientific data.

    • Establishment of an industrial scale quarrying operation

    • Exploration work, using detailed geological mapping together with hammer drilling, Soil geochemistry and ground geophysics for structural interpretation are recommended in this area with potential for gold and base metals.

    Latest export opportunities in the Mining sector

    Latest export opportunities in Uganda

    Getting into the market

    Uganda occupies a strategic position in East Africa, which gives it the advantage for the eventual development of exports of mineral products of Sudan, the Democratic Republic of Congo, Rwanda, and Burundi, Kenya and Tanzania and the COMESA region as a whole.

    Under the Income Tax Act, Cap.340 mining companies are given special consideration through a Variable Rate Income Tax (VRIT). The rationale for this arrangement is to capture a competitive share of net cash flows for the government at different mine profitability levels while at the same time providing suitable tax relief for projects.

    Other incentives are:

    • Investment protection under the Multilateral Investment Guarantee Agency (MIGA)

    • Mineral exploration expenditures are expensed 100%

    • Import taxes such as customs duty for all mining equipment is zero-rated

    • There is externalisation of dividends and profits

    • Generous depreciation allowance at 30% for all depreciable mining assets.

    More about Doing Business in Uganda

    Contacts

    Market intelligence is critical when doing business overseas, and UKTI can provide bespoke market research and support during overseas visits though our chargeable Overseas Market Introduction Service (OMIS).

    To commission research or for general advice about the market, get in touch with our specialists in country – or contact your local international trade team.

    UKTI Events

    UKTI runs a range of events for exporters, including seminars in the UK, trade missions to overseas markets and support for attendance at overseas trade shows.

    Latest events in the Mining sector

    Major Events

    Uganda Mineral Wealth Conference

    Date: 2nd October 2013

    http://mwc2013.ucmp.ug/?p=340

    Useful links

    More about OMIS and other UKTI services for exporters

    Sectors: Mining & Quarrying
    Countries: Uganda
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