Chinese firm injects Shs700b in Busia gold exploration

Teenagers at one of the gold mines in Tiira Village, Sikuda Sub-county, in Busia District recently. PHOTO/DAVID AWORI

What you need to know:

  • Mr Tan Jiuchang, the general manager of Wagagai Mining Uganda Ltd, told Daily Monitor that the company is expected to create jobs and make annual tax remittances of about Shs60 billion by 2025.

A Chinese company has invested at least Shs710b in the mining and development of a gold refinery in Busia District.

This follows the discovery of a substantial deposit of the mineral amounting to nearly 10 million tonnes.

The investment by Wagagai Mining Uganda Ltd, a subsidiary of Liaoning Hongda Group, a Chinese consortium, has seen $100m (about Shs355 billion) invested in the first phase, while another $100 million is to be invested in the second phase, pushing the total investment portfolio to about Shs710b.

There are several small scale mining enterprises in Busia District in Mawero, Tiira, Amonikakinei, and Syanyonja in Busitema, operated by artisanal miners who have been blamed for aiding ecological destruction and land pollution.

The company has acquired surface rights to mine and process gold on a land area of 9.24 square kilometres in the gold-rich Alupe Village.

Job creation
Mr Tan Jiuchang, the general manager of Wagagai Mining Uganda Ltd, told Daily Monitor that the company is expected to create jobs and make annual tax remittances of about Shs60 billion by 2025.

“Our target as a company is to increase output, provide jobs to at least 3,000 Ugandans and pay annual tax remittances of Shs60 billion,” he said in an interview on Tuesday.

Ms Agnes Alaba, the acting director of geological surveys and mining development in the Ministry of Energy, described the undertaking as a “huge” milestone in terms of investment, revenue and job creation for the local population.

She said the exploitation and value addition to the mineral resources is critical for industrial development, increase return on investment and a boost for the supply of locally-manufactured products such as jewellery, steel, and fertilisers.

Mr Peter Lokeris, the State minister for Energy and Mineral Resources, said the production is expected to start in 2023. He added that the investor will train some local artisan miners on skilled gold extraction. 

Gold resource
The Busia gold mine, with a lifespan of 30 years, has proven gold ore reserves estimated at more than 8.9 million tonnes, with an average grade of 2.96g/tonnes and 25 tonnes of gold metal.

The gold explored in 2020 amounted to 5 tonnes and the current amount of gold increased to 30 tonnes, while the future ore amounts are expected to reach 30 million tonnes, with gold production estimated at between 40 and 45 tonnes

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