After the eviction of artisanal miners in Mubende district about three weeks ago, the leaders of the area have estimated a loss of about Shs 500m, which they would receive as taxes from various business owners in the mining camps.
According to the district's natural resource officer, Vincent Kinene, each of the eight camps had more than 50 shops, with each shop owner paying Shs 30,000 in the form of monthly fees. This amount would total Shs 200m collected annually from shops alone.
However, with the eviction of thousands who occupied the mines, Kinene said the local government will no longer get this money.
"That is why the district administration has been sympathetic... " he said in reference to the shops that have been closed.
Kinene added: "We had like eight mining camps, and we have been getting like Shs 30,000 a month from each enterprise in the camp."
Some camps are thought to have had more than 200 enterprises where fees could be levied per month, making him estimate a loss of over Shs 500m.
"The money that comes in to the district [in royalties from the bigger mining companies ] has been less than Shs 20 million a year. That's why the local authorities asked: 'what do we get from Kisita mining company? What do we get from AUC [Minitng Ltd]?'" Kinene added.
However, when we contacted AUC boss, Moses Masagazi, he refuted the claim that the company was not paying its fair share of fees. He instead blamed the district's political leaders and other senior government officers, whom he refused to mention, of failing his business.
"There are tremendous costs to AUC and its investors in terms of the investment, lost time and market opportunities," Masagazi's letter to The Observer partly reads.
He added: "Apart from the investment in the area, to-date, the company, under the severely encumbered activities, continues to pay the license fees to Uganda Revenue Authority. This year (2017) alone, the company has paid over Shs 100m in form of license-related fees."
In Mubende, there are three companies with mining leases. One for Building Majesty Company Ltd, which deals in dimension stones mining, the other is for Bakisita Company Ltd and AUC Mining Ltd, both of which deal in gold mining.
The district vice chairman, Zziwa Birungi Amooti, said government did not engage the district's authorities in the exercise of evicting artisanal miners.
"We didn't even get the eviction notice... Mubende hasn't benefited from this mining activity because we don't even have enough information about the owners of the licences," Birungi said.
GEMSTONE INTERNATIONAL OR AUC?
According to Kinene, his office has had a torrid time in distinguishing between AUC and Gemstone International Limited. He said his records show that AUC has a mining lease of 5.8 square kilometres.
He also found out that Gemstone International, whose exploration licence expired in 2016, has a close relationship with one AUC director. It's due to this reason that AUC, which has a mining lease that was granted in January 1994 and ending on January 2, 2020, has been trying to move out of its mining lease and extend to the area covered by Gemstone's exploration licence.
Asked how much they could have lost as a result of AUC not paying royalties, Kinene was unable to estimate.
"Nothing like their figures has ever been presented to us, he said.
"They don't even do environmental impact audit from that time ; they don't even allow inspectors. But from what we see in their mine, there is no serious activity taking place, and yet very many people were evicted from that place before it became a mining lease and were not adequately compensated," he observed.
Kinene explained that they don't even include Gemstone International on their list of companies in Mubende because its is temporary and just exploring.
Kinene disclosed that according to his documents, before Gemstone got the exploration licence, they were part of AUC.
Kinene said if they had received the money from these mining firms, they would have used it to solve infrastructural challenges like working on roads that are in a sorry state, hospitals and schools.
"As the department of natural resources, we don't have a vehicle to move around those places. If we were getting that money, we would be able to buy machines like X-ray fluorescence machine to test for mercury on site and such pollutants," he added.
Kinene said as Mubende district, they have been getting a very small percentage of the royalties, money that would normally range between Shs 4m and Shs 5m.
Kinene said to end the standoff in Mubende, Gemstone owners should tell the authorities the exact part where they have found gold, where they want to mine and then give up the other places to artisanal miners.
"In those other places, we can grant artisanal miners location licences and have the local people do their work. The problem with Gemstone International is that they are greedy. They want to take over the 207 square kilometres yet they can't," Kinene said.
He added that as a district, they benefited a lot when thousands were in the mines because, "people were employed, people were eating, people were spending money, and they were making the local economy of Mubende very vibrant."
Like Kinene, Birungi asked government to quickly intervene in the deplorable state of the evicted miners are going through, adding that the crime rate is going to increase in the district because many youths are still loitering in the area with no jobs.