A Ghanaian mining company has announced a $100m investment over a seven-year period for its gold project in Bugiri, raising expectations of hundreds of jobs and more capital inflows.
Blaze Metal Resources Ashanti will partner with two other firms, Lynks FZC and Amor Mines Limited, according to a company statement. Company officials speak of 'encouraging' gold prospects on both licences it holds, covering 60 square kilometres over two districts.
In the statement, Prince Opoku, the operations director for Blaze Metal Resources Ashanti, said they were targeting two million ounces of gold in an area that also holds other base metals including iron ore and coltan.
"The two million ounces is our working figure but there could be more gold and that is the reason we will invest US$100 million over the next seven years," Opoku said. At current gold prices of $1,200 per ounce, two million ounces would sell for $2.4bn, according to Blaze metals' calculations.
Opoku recently spoke at a community sensitization forum in Bugiri, where local leaders from Bugiri and Namayingo districts were informed about the company's plans.
"We are going to the exploration stage where we will do blasting, trenching, and digging among others. These will create interruptions that will have an effect in the daily lives of the people in the communities where we will work, and so we needed to sensitize the local leaders first," Opoku said.
The mining industry is usually bogged down by conflicts between local elders over revenue sharing, and land compensation. The situation is also made more difficult by illegal mining, which hardly contributes revenue to the local administration.
"We will compensate whoever owns the land but we will not be buying the land. After our project, we will restore the land and give it back to the owners," Opoku said.
Wilbur Waisswa, the LC 5 chairman Namayingo district, said they had not benefitted from illegal mining.
"Going forward, I am happy that this partnership between Blaze Metal Resources and us will give way to mining of gold the proper way," Waisswa said.
"It means we will get local taxes and new jobs will be created and on the whole, the economies of our districts will be transformed the same way oil is transforming the Bunyoro sub-region."
According to Uganda's mining legislation, minerals largely belong to the central government, with royalties accruing from a mining area shared out between the central government (80 per cent), the district (10 per cent), the sub-county or town council (7 per cent) and the land owner (three per cent).
John Oketch, the managing director Amor Mines, said the joint venture partnership would not eliminate the small-scale miners but would work with them at the location stage.
"We intend to bring the illegal miners working on our licence areas as they are critical at the location stage, but again we will pay them for the gold they find at a higher price that they are getting today," Oketch said.