Mining: Uganda at defining moment

Vast deposits of mineral wealth could turn around many lives

They are poor and live in dreadful shelters. Basic infrastructure like clean running water and electricity is missing.

And at dawn, they retire to drink the local gin, continuing that pattern over and over again. This is the kind of life many people in Buhweju district, western Uganda, wake up to every day.

A number of these mud-and-wattle houses sit on gold reserves. Today, a couple of residents use rudimentary and artisanal means to mine the resource. But it has not turned their lives into what they dream of. And the wait continues.

“We did not go to school; and this is what we can do,” said Andrew Muhwezi, one of the miners.

And just like Buhweju residents, there are so many Ugandans in different districts all over the country who hope for a better life as vast minerals continue to be discovered in their areas. More gold is being explored in Kamalenge, Mubende district.

Northern Uganda, for long the epicentre of a brutal war, could witness a fundamental change with the prospects of nickel and zinc there, while south western Uganda is blessed with substantial reserves of iron ore.

At the second mineral wealth conference held in Kampala last week, organised by the Uganda Chamber of Mines and Petroleum, it was revealed that the lives of many Ugandans were on the brink of transformation as the country gets closer to developing its mining industry.

Bridgette Radebe, the executive chairperson of Mmakau Mining, in South Africa, who delivered the keynote speech, said this was “a defining period” for Uganda.

“Uganda is sitting on a defining moment for the unique years to come,” Radebe said.

In his presentation, David Kyagulanyi, a geologist and director of Kweri ltd, said there were huge deposits of aluminium clays in Iganga district estimated to be worth $500bn, far more than the country’s current GDP of $21bn.

“Using this resource, much of the glass [we import] can be produced locally,” Kyagulanyi said.

The Uganda 2012 mineral journal, a government publication, estimates that Uganda produced up to 1.6m tonnes of minerals in 2011, up from 153,111 tonnes produced in 2002.

Given the country’s mineral resources, Radebe said she might come to Uganda for business.

“Uganda has a very important resource of phosphates used to make fertilisers and that’s what we are looking for.”

Tread carefully

Radebe, with more than a decade of experience in contract mining, mining construction and mining mergers and acquisitions, said Uganda must avoid falling into a trap of having foreign companies come into the country to reap all the mineral wealth at the expense of local people.

“We don’t want to see in Uganda, that after 20 years, local mining workers are living in squalid conditions while mining companies’ CEO carry millions of dollars back home,” she said.

Radebe added that in seeking to look good in order to attract FDI in the sector, Uganda should not easily fall for the whims and charms of foreign investors and ignore the local people.

There are already land wrangles between junior mining companies and locals. Other locals say they have not benefited from the mineral exploration on their lands.

Radebe advises that all this can be avoided through stronger legislation. She said Ugandans should be helped to benefit from the backward and forward linkages of the industry – through providing infrastructure, schools, and health centres.

Indigenise

In South Africa, the law says locals must have shares in the mining companies of not less than 26 per cent. And in Zimbabwe, 51 per cent must go to the locals.

At one point in South Africa, only four mining companies owned about 84 per cent of the mines – which prompted the government to call for the nationalisation of the mines.

Radebe advised that government must put in place a legislation to ensure that locals had a stake in the mining industry. President Museveni, who was the chief guest at the conference, said government was working to harmonise the relationship between mining companies and locals.

Last year, the total number of mineral licences issued reached 726, with many companies still seeking licences, according to the Uganda 2012 mineral journal.

amwesigwa@observer.ug