By Philip Wafula/Monitor
Uganda’s energy minister Ruth Nankabirwa has said government is piloting its Domestic Gold Purchase Programme in order to tap into the mineral resources of the country.
Nankabirwa was speaking on Saturday during the commissioning of Wagagai Gold Mining Project in Busia District, which has paved way for the formal operation of the first modern gold mining project in Uganda.
Nankabirwa noted that historically, gold has been a symbol of wealth and medium of exchange, often used to back currencies or as a secure investment asset.
“Gold plays a key role not only in jewelry and investment but also as a reserve asset for the Central Banks to stabilise currencies, and hedge against economic instability, among other uses.”
President Museveni later described the over $200m (about Shs720 billion) investment as “a transformative milestone that will end the wasteful export of raw minerals and usher Uganda into a new era of value addition”.
He noted that for decades, Uganda has only exported blister copper which was not pure enough for direct use and had to be refined abroad before being re-imported, a cycle Museveni described “as a loss to the country.”
“When you export unprocessed minerals, you are cheating Uganda . . . I want to thank Wagagai for listening to my message from the beginning and fully processing the gold. Uganda will get more money,” the Ugandan leader observed.
According to a source at the Ministry of Energy and Mineral Development (MEMD), discussions were held with Bank of Uganda and followed by a dedicated workshop, a position corroborated by the Bank’s Director of Communications and Public Relations, Kenneth Egesa.
“We have established a policy framework to guide gold purchases. Under this framework, we have initiated a procurement process to identify qualified suppliers who meet all the necessary criteria. Successful suppliers will be selected to participate in our pilot purchase programme,” Egesa explained.
About Wagagai
Wagagai Mining Uganda Company Ltd is a subsidiary of Liaoning Hongda Enterprise, a Beijing-based firm which is undertaking the exploration, mining, processing and smelting of gold.
The project was established against the backdrop of deepening China-Uganda cooperation, while the company was founded in response to the Ugandan government’s strategic plan to promote the development of gold mineral resources.
The refinery covers 9.224 square kilometers with reserves of up to 30 million tons of gold ore at an average grade of 0.8–1 gram per ton, supporting 20 years of continuous production.
Gains
Chinese Ambassador to Uganda Zhang Lizhong said: “The project adopts internationally advanced equipment and technologies to make full use of local ores to produce pure gold for the next 20 years.”
The project is expected to contribute approximately $10 million (about Shs36 billion) annually in tax revenue, create more than 2,000 jobs, and train more than 500 skilled Ugandan workers.
Tan Jiuchang, the Wagagai Mining Company General Manager, said the project is planned to be implemented in three phases.
“Phase I was launched in 2019 and completed by April 2025, Phase II is under construction and scheduled for completion in 2027, while Phase III is planned to begin in 2030 and reach full completion by 2035,” said Jiuchang.
“Beyond contributing to national economic growth, the company also seeks to deepen China–Uganda cooperation in resource development, industrial integration, and talent cultivation, thereby delivering long-term benefits to the Ugandan people,” he added.
Once at full capacity, the mine will process 5,000 tons of ore per day or 1.5 million tons annually to produce about 1.2 tons of refined gold each year at 99.99% purity.
