How new mining law will affect you

On February 17, legislators sat for several hours making deliberations on the Mineral and Minerals Bill, 2021, which they enacted late in the evening as darkness gathered.

Thirty five-year-old Alphonse Opolot, a farmer in Kumi District, was among Ugandans who keenly followed the proceedings, concerned the legislation would have wide-ranging ramifications on individual citizens, corporates and economy.

Whereas it was proposed in the original Bill that an individual or corporate entity mining without a licence be fined Shs1b, or be jailed for five years, or both, lawmakers maintained the prison term, but slashed the penalty to Shs500m.

“It is still a lot of money, regardless. Such fines will definitely affect aspiring entrepreneurs interested in joining the [mining] industry as it is not even easy to acquire a licence for the trade,” Mr Opolot said.

In order to start any business in mining, other than buying and selling, one has to first obtain a prospecting licence, according to information on the Directorate of Geological Survey and Mines website.

After prospecting, one can then apply for an exploration licence, a mining lease or location licence for proven deposits. Ownership can be 100 percent local or a joint partnership with at least 51 per cent local.

Mr Opolot opposes the provision for entrepreneurs to secure licences before commencing exploration.

The Bill enacted last week seeks to repeal the Mining Act, 2003, and streamline operation in the sector, provide for an accountable and transparent licensing regime, promote in-country value addition as well as optimise management of mineral revenues.

Mr Eriya Omoit, the programme coordinator for Samia-Bugwe Miners’ Network, feels the enacted legislation is more inclusive than its draft version which, according to him, was not favouring small scale miners.

“If [the Act is signed by the President] into law, it will mean Ugandans will now have the freedom to apply for small and medium scale licenses,” he said.

Official records show that Uganda is endowed with at least 27 minerals, including gold, copper, cobalt and Tin. Others include limestone, gemstones, marble, nickel, and tantalite.

Rushed Act?
The speed at which legislators enacted the Bill appears to have caught sections of the public unawares.

To some, among them lawyer Ivan Bwowe, Parliament did not consult extensively about the Bill, yet the consequences of the legislation will be enduring. “That Bill was rushed and does not serve the interests of the public, but is rather a protection of a section of powerful corporations and individuals,” he said. Mr Don Bwesigye Binyina, the executive director of Africa Centre for Energy and Mineral Policy, shares similar sentiments.

“Consultations were inadequate. And, of course, when you make a law without consulting stakeholders to guide in the core issues, which you the legislators may not appreciate, [the law becomes problematic]. That is why consultation is part of the parliamentary rules,” he said.

In response, Mr Emmanuel Otaala, the chairperson of the Parliament’s Committee on Natural Resources, denied they rushed the legislation, calling their speedy conclusion of the Bill as a manifestation of “stamina”.

“You see, that is stamina. We must learn to do work and finish instead of postponing. Uganda has been getting only 1.4 percent of GDP (Gross Domestic Product) from minerals, but miners have been getting a lot of money and they keep claiming that they have invested a lot of money and [are] not getting anything,” he said.

Mr Otaala said he does not understand why some individuals are saying the Bill was rushed, yet it was committed to the Committee on November 18, 2021, while Parliament resumed work on January 27.

“Two weeks ago, I went to [Parliament’s] plenary [sitting] to ask for more time and was given three weeks. So, now people wanted the three weeks to elapse and then I go back for the third time? That would (be) extra-ordinarily abnormal and moreover, I have another Bill pending before me, the Electricity Act (Amendment) Bill,” he said.

Mr James Muhindo, the national coordinator of the Civil Society Coalition on Oil and Gas, condemned the practice by the government to put Parliament under pressure to pass rushed laws instead of carefully scrutinising legislative proposals to produce proper laws for the good governance of the country.

“So, to that end, we think [that] the separation of powers between the Executive and Legislature is not there and it is demeaning,” he argued.

According to Ms Winfred Ngabirwe, the executive director of Global Rights Alert, the fact that the extractives sector has been in the dark for a long time and Parliament rushed to pass the Bill shows something fishy.

“I think they are trying to make it an exclusive sector so that those that have been operating behind the shadows can then have the liberty to be the only ones to work in our mining sector,” she said.

Key provision
A key provision in the new Act, which is pending presidential assent to become law, is about revenue sharing. For instance, it is provided that whenever a mineral is discovered, the government will take 70 percent of the revenue, a district local government snaps up 15 percent, while the sub-county or town council is given 10 percent and owners of the land settle for 5 percent.