Moving towards a golden future

The country is working hard to boost up its economy with gold mining

Since the early twentieth century, gold resources have piqued prospecting attention in Uganda. Nonetheless, there was no large-scale gold mining and very limited medium-scale gold mining in the past, leaving gold extraction to artisanal miners.

Within the ‘Uganda Vision 2040,' the government has identified mining as a key industry. A new Mining and Minerals Act (2019) has been approved, as well as a revised Mining and Minerals Policy (2018). Placing emphasis on the development of an industrial mining sector, the formalisation of artisanal and small-scale mining is encouraged. In light of this, and a rise in the international price of gold, national elites and foreign interests have turned their attention to gold's productive potential.

In 2017, the first industrial ‘African Gold Refinery' opened in Entebbe backed by Belgian gold mogul Alain Goetz. A ‘gold boom' has resulted from refined exports, with gold being the top foreign exchange earner in 2019. However, an estimated 90 per cent of refined ore is produced outside of the nation.

Due to the lack of large-scale multinational mining corporations, the gold sector attracts smaller investors, both Ugandans and foreign (Ethiopia, Kenya, South Africa, India, Russia, Australia, UK, and China). Along with gold mining investors, there is a thriving Artisanal and Small-Scale Gold Mining (ASGM) industry in the southwest (Kigezi, Buhweju), west (Kanungu), center (Mubende), east (Busia, Namiringo), and northeast (Busia, Namiringo) (Karamoja). The majority of ASGM gold extraction is alluvial, with some manual hard rock mining.

According to the study, Uganda exported 2,470 kg of refined gold in May, up from 1,180 kg in April, the highest amount in three years. Uganda's gold exports peaked in June 2017, when the country exported $120 million worth of gold, mostly from small-scale wildcat miners. The majority of Uganda's gold is sold to the Middle East, mostly to the UAE. The increase in Uganda's gold exports can be linked to gold's safe haven appeal among investors, who saw investing in the yellow metal as a safer alternative than holding currencies during the coronavirus outbreak. Common uses of gold from the mining sector is on gold bullion, followed by jewellery and electronics, particularly for use in computers.

Uganda has recently constructed three additional gold refineries, boosting the country's processing capacity and allowing Uganda to gradually establish itself as a regional gold trade centre. The gold for the four refineries comes from surrounding nations including the Democratic Republic of Congo (DRC). Uganda's Central Bank stated in March that the country transported $1.25 billion in gold in 2019, more than double the $514.8 million it exported in the year 2018.