Unexciting Excitement Surrounds Museveni Gold Reveal

Uganda is a low-key gold producing country BAZ WAISWA Uganda is a low-key gold producing country

Uganda became an overnight celebrity in the world of gold miners and traders when President Yoweri Museveni during this year’s State Of The Nation address on 7th June said the country had discovered a deposit of 31 million tonnes of gold ore in Busia district.

The revelation by the president attracted mixed reactions from members of the public and especially miners and gold traders. The president, confident as always, also said that the country would earn more than $12 trillion.

Ministry of Energy and Mineral Development (MEMD) spokesperson Mr Solomon Muyita told Reuters that an estimated 320,158 tonnes of refined gold could be extracted from the 31 million tonnes of ore. In Uganda, gold deposits are found in Karamoja sub-region and districts Busia, Bugiri, Namayingo, Kasanda, Buhweju and Bushenyi.

Unbelievable 31 Million Tonnes

To many industry players, the president’s disclosure was laughable and didn’t sit well with them. Mr. Don Bwesigye, a mineral & energy policy analyst, in an article published in the Daily Monitor newspaper, disputed the president's gold figures based on statistics from the US Geological Surveys.

The Surveys, according to Mr. Bwesigye, indicate that 244,000 metric tonnes of gold, the equivalent of 268,400 tonnes of gold, have been discovered in the world to date, of which 187,000 metric tonnes (205,700 tonnes) have so far been produced, leaving a balance of 57,000 metric tonnes (62,700 tonnes) of known reserves.

"This implies that Uganda’s gold discoveries surpass global gold discoveries by 115.5 times. Did the President confuse ounces with tonnes,” Mr Bwesigye questioned in the article.

The Wagagai Factor & Optimism

The government launched the construction of a gold refinery on 7th October 2021, under the management of Wagagai Mining Company Limited, a Chinese company with a vast gold mine in Busia, eastern Uganda.

According to reports, the company owns the gold mining right of 9.24sq km in Busia and about 20m tonnes of gold ore resources. The Refinery will occupy 300 acres of land covering Alupe, Akipenet, Amagoro and Amonikakine villages in Buteba Sub County valued at $200m.

Rising & Falling Gold Exports

Uganda registered a surge in gold trade in FY2020/21 due to, among others, Uganda’s improvement in refinery capacity which translated into becoming the regional gold-processing hub.

Mineral products registered the highest import growth in FY2020/21 (US$ 2169.16 million) from US$ 1,093.29 million in FY2019/20. Gold accounted for 90 percent of the growth.

However, in FY2021/22, the country registered a decline in import receipts from US$640.95 million in Q4 FY2019/20 to US$53.06 million, US$57.76 million, and US$54.24 million in Q1, Q2, and Q3 respectively.  This is attributed to the introduction of a new tariff on gold exports in FY2021/22.

Better Data To Stop Illicit Gold Trade 

Since Uganda got a gold refinery in Entebbe, its gold exports have been rising. Industry pundits say the gold mining activity in Uganda dominated by artisanal mining was insufficient to match the exports.

It was highly thought that Uganda was being used as a route for illicit gold trade from DR Congo. And indeed, early this year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), sanctioned Mr. Alain Goetz, the African Gold Refinery in Uganda, and a network of companies involved in the illicit movement of gold valued at hundreds of millions of dollars per year from DR Congo.

According to a report by the United Nations independent group of experts on Congo, governments need to improve and make public their gold trade data to help stem smuggling and violence around mines in the eastern Democratic Republic of Congo.

The Mineral Development Programme

The government of Uganda is running the Mineral Development Programme whose goal is to increase the exploitation and value addition to selected resources for job-rich industrialization.

The government under the mineral development programme increased exploration and quantification of priority mineral resources, and commissioned a gold mine in Busia district on 5th October 2021, with reserves estimated at 12.5 million ounces of mineable gold (equivalent to US$16 billion in gold reserves).

The government also conducted an evaluation of mineral reserves, conducted aerial and geological mapping, as well as Geochemical and Geophysical Surveys of Karamoja region, and in December 2021, Samta Mining and Minerals Ltd started exploratory drilling of Nickel mineralization at Atiak in Amuru District.

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