Kampala- The oil and gas investment lobby in Uganda is demanding that government ends illegal gold mining if it is to attract large mining firms in the country.
Speaking at the Mineral Wealth Conference last week, Mr Elly Karuhanga, the president Uganda Chamber of Mines and Petroleum, said government needs to specifically deal with the illegal gold mining taking place in Mubende.
“We need to ensure that the Mubende mine does not suffer at the hands of illegal miners because it can give us a bad name,” Mr Karuhanga said.
One of the delegates at the conference noted that government needed to “bring to an end this embarrassing situation” because it would turn away investors.
AUC Mining Company has been battling with encroachers since 2012 over land in Mubende where gold deposits were discovered in Kamelenge.
An exploration licence was granted to the company, but there has been an influx of miners looking to cash in on the gold deposits.
“The benefits of all our prior work have not been enjoyed because it has been hard for us to move to our property. Let the country be clear on how artisanal miners should work together alongside the formal investors in Mubende,” Mr Alasdair Stuart, chairman, and a director AUC Mining Company told delegates at the conference.
Notably, the same miners want to have their activities legalised, which has further escalated the standoff.
Nearly 1,000 artisanal miners are actively participating in mining with some of their proceeds sold to Chinese and Indian middlemen.
The quantity and value of that gold remain unknown.
At the conference, the focus was on how to add value to minerals but delegates said as long as land access and illegal mining are not sorted, attracting investors will remain a challenge.
“Government is working together with the Chamber of Mines and Petroleum to deal with this situation in order to support operations of investors,” said Prime Minister Ruhakana Rugunda.
Large scale mining
To establish a large-scale mine by world standards, at least $5m (Shs18.5b) to $100m (Shs370b) is needed in the exploration process – from discovery to proving feasibility.
However, due to a fall in metal prices and a global economic downturn, exploration expenditure has fallen by at least 30 per cent worldwide with an additional 15 per cent to 20 per cent decline in exploration investment in Africa predicted in 2015 and beyond.