Mineral exporters turn to exploration

Mining companies in Busia District have resorted to exploration of minerals as the ban on export of unprocessed and semi-processed minerals continues to take a toll on them.

The ban was imposed on all miners by the government in 2015.

Exploration involves a range of activities to determine if there are minerals in the ground. If the process determines that minerals can be commercially extracted, then mining in the future may be possible.

In an interview with Daily Monitor at the weekend, Mr Nimit Patel, the managing director of Greenstone Resources Ltd/Tiira Goldmine, said: “We are currently into exploration and engaged American and Russian geologists to carry it out for us. We want to identify a good amount of resource base; actually, Uganda has a huge potential for gold mining and exploration.”

He added: “We currently have a resource base of 850,000 ounce sizable deposits enough to establish a good size mine. But since the ban, we have not been producing [gold]; if we produce, we can’t export.”

He added: “Most buyers are smugglers who pay low for it and smuggling is illegal. Once the ban is lifted, we are ready to resume production on a commercial basis.”

Other companies, which requested not to be named, asked the government to lift the ban saying they have been  making losses since it was imposed.

The companies added that they have had to send some of their workers away due to the ban.

However, Ms Patricia Alitho, the head of communications at the Ministry of Energy and Mineral Development, said the ban will be maintained.

“As for the VAT aspects, they must have been developed based on an understanding of the industry; however, these issues can always be reviewed,” she said in a telephone interview.

background

While addressing the National Resistance Movement (NRM) Parliamentary Caucus in February 2015, President Museveni said the country was not benefitting from its vast mineral resources, and called for an end to “a historical mistake of exporting minerals without adding value to them”.

Mr Museveni said minerals, unlike agricultural products, were exhaustible and, therefore, needed to be sustainably exploited.

The then Minister of Energy and Mineral Development, Ms Irene Muloni, said: “Why do we donate raw materials to the outside world? We need the money, yes, but is it worth donating an item at maybe 10 percent of its value?”

She added: “Wheareas if you actually processed it here, you are going to add value and create jobs for our people.”

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