Kampala — UGANDA'S vast mineral potential is opening huge investment opportunities paving way for the creation of an attractive investment climate that will increase production for social and economic development.

Many areas in Uganda have had potential for mineral production, but because of limited geo-scientific data there is inadequate exploration despite the country's long history of mineral production.

However, final results of the airborne geophysical survey which covered about 80% of the country indicate that Uganda is endowed with rich and diverse mineral wealth where investors could exploit and get high return on their investments.

Variety of precious, non-precious and industrial minerals that occurred during the survey include phosphates, platinum, beryllium, bismuth, collumbite tantalite, copper, chromite, diamond, gold, iron ore tin and wolfram.

Other minerals are asbestos, clay, diatomite, feldspar, granite gneiss, graphite, gypsum, kaolin, kyanite, limestone, marble, mica, phosphates, rock salt silca sand, talc and vermiculte. There are potential for world class-discoveries.

Uganda embarked on a five-year Sustainable Management of Mineral Resources Project (SMMRP) that was aimed at acquiring geo-scientific data and thus create an environment for attracting investors who will revamp the mineral sector.

According to the ministry of Energy and Mineral Development, the project began in 2004 and was funded by the World Bank, the Nordic Development Fund, African Development Bank (AfDB) and the Ugandan government at a cost of $42.7m.

It covered many aspects including strengthening of governance in mineral sector management and small-scale mining.

Other aims are the establishment of environmental and social systems, geo-information and development as well as project management and coordination.

The programme ensured that emphasis and financial support were laid down on encouraging small scale miners and artisanal operators to form groups and legalise operations through provision of small grants.

The airborne survey was divided into seven blocks and block one covered the area from Lugazi to one degree north and eastwards to the Kenya border. Block two covers part of Wakiso, Luwero, Kiboga, Mubende, Hoima, Kyenjojo and Kabarole to the Congo border.

Block three covers Kabale, Kamwenge, Rukungiri, Kanungu, Isingiro, Mbarara, Ntungamo, Kisoro and Bushenyi, while block 4 covers Karamoja region. Block 5 covers West Nile region, block 6 covers part of Luwero, Nakasongola, Mbale, Soroti, Apach, Lira, Masindi and Bulisa at the top of Lake Albert, while block 7 covers Masaka, Sembabule and part of Wakiso.

Copper-cobalt deposits

The survey indicates that Kilembe mines and its environs has 90% confidence level to discover new copper-cobalt deposits.

Copper has been mined in Kilembe since 1956 up to 1979. However, with the new report, there are about four million tones of copper proved reserves and over two million probable copper ore that could be discovered. Cobalt is also mined in Kilembe environs.

Gold deposits and occurrences

Gold deposits are in Tira Gold Mines in Busia and it has been operating since 1994. It is small gold mine and its production is quite small in order of 3kg of gold a month if they are doing well.

Gold occurrences and artisanal mining has been taking place in Mubende-Bunyoro areas, and in addition to gold, carsterite, wolframite, columbite-tantalite, beryl and lithium mineralisation occur in the Buhweju gold field areas.

There is also gold occurence in the Kigezi goldfield, and Karamoja region has also gold occurences in several areas and there are also showings of copper and zinc, chromite with platinum and large resources of marble.

Phosphates and Limestone

Large deposits of phosphates were found in Tororo. The deposits are in the order of 300 million tons and grading at 13% of phosphate oxide. These deposits were exploited by the defunct Uganda Development Corporation to make fertilisers at Tororo between 1963 and 1978. before it collapsed.

However, a new investor known as NILEFOS Minerals wants to revive the plant. According to statistics, when the plant is fully operational, it could provide fertilisers for East, Central and Southern Africa.

Limestone deposits were found in Hima in Kasese and Dura in Kamwenge districts. Other deposits were found in Tororo. Karamoja has the largest concentration of limestone which is in form of marble. Both limestone and marble are composed of the same minerals. Most of them produce cement.

Vermiculite and Rock salt

Vermiculite is found at one place in this country and south of Mbale in a place called Namekara. There is a mine but it is owned by Rio Tinto. Rocks salts in Lake Katwe where we have salt and the failed salt project and there is a potential to get salt from them.

Solution to challenges in the sector

To address problems that have hindered the mining sector, government decided to acquire new geology information, geophysics and geochemical to present it to the public.

It also decided to build capacity, rehabilitate laboratory and purchased new equipment to enable scientists do research and look for minerals. Although a new mining law was passed in 2003, there is a need to look at the legal and regulatory regime and see whether they are really competitive.

Government is introducing a new licensing system using computerised mining and registry system. This will ensure transparency and saving time as information will be available.

Licencing regime

An exploration licence is initially granted for three years. It may be renewed for two years and again for another two years. So if the renewable two years were requested and granted the exploration licence would be seven years.

At every renewal the licence owner must relinquish 50%. What is dropped someone can pick it. A mining lease is granted up to 21-years and may be renewed for more 15 years or the life of the deposits remaining on the ground.

Sharing of royalties

Eighty percent is taken by Uganda Revenue Authority (URA) and goes to the consolidated fund. The 20% is put on an account in the Bank of Uganda in the ministry of energy account to disburse it as royalties.

Seventeen percent goes to the local governments and 3% goes to the land owner. That is the constitution provision. The 3% applies to metals and precious stones.

For industrial minerals it is quantity based. For example limestone is charged sh3000 a tone. Of the sh3000, 80% goes to the Central Government, 17% to the Local government and 3% goes to the land owner where the land is privately owned by someone. If it is public land then the money goes to the government. It is little but investors are producing in thousands of tones.