Uganda announces discovery of huge gold deposits

What you need to know:

  • Uganda’s gold exports have been on the rise since opening the Africa Gold Refinery in Entebbe, according to official records

Uganda has announced that it has struck a deposit of 31 million tonnes of gold ore, with extractable pure gold estimated to gross 320,000 tonnes.

President Museveni broke news of the find in his State-of-the-Nation Address yesterday, but provided little detail, pointing in general that it would fetch the country more than $12 trillion.

Technocrats in the Ministry of Energy and Mineral Development, Mr Museveni noted, had informed Cabinet that the country was positioned to get slightly under $700m in royalty payments, with the investors poised to cash in on the windfall.

Citing six local gold refineries, among them Africa Gold Refinery in Entebbe that the United States sanctioned in March over illicit source of its gold, the President declared that the time for Uganda to ship unprocessed exports is over.

In details provided at our request, Ministry of Energy and Mineral Development spokesperson Solomon Muyita noted that the gold-endowed parts of Uganda include Alupe in Busia and Karamoja, both in eastern Uganda; Kameleng, Kisita, and Ngugo in Kassanda District in central region; and, Bushenyi’s Tiira area in western Uganda.

The volume of the reserves is estimated at 31 million tonnes of gold ore, or net 320,158 tonnes of gold, valued at $12.8 trillion, according to a document prepared by the line ministry.

If the computations are accurate, it would suggest the new gold find would topple the estimated windfall from oil still in the ground in the Albertine region.

Mr Muyita said a Chinese-run firm, Wagagai, which picked its name from the highest peak of Mt Elgon, expects to mine and start refining at least 5,000 kilogrammes of gold a day in Busia by the close of this year.

The district has about 2,000 artisanal miners, adding to thousands more eking a living in Karamoja and Kassanda by engaging in rudimentary extraction of the precious gem, leading to health hazards and collision with law enforcement personnel.

There were no readily available figures on how many new jobs the huge gold find will create.

It remained unclear what the immediate and long-term impact of the expected gold windfall would be on the economy where more billions of dollars are expected to flow when the country starts extracting oil likely in 2025.

Uganda’s gold exports have been on the rise since opening the Africa Gold Refinery in Entebbe, according to official records.

For instance, in 2019 and 2020, the country exported gold worth $1.9b to the United Arab Emirates, $1.4b to South Korea, and $28.7m to Hong Kong.

In contrast, Uganda imported nearly $2b worth of gold, making it the 18th largest gold importer in the world, according to Cabinet record.