A new policy  enacted by the government will see Uganda maximise the gains from its natural resources

To achieve efficiency and ensure equitable and transparent management of mineral revenues, Kampala will automatically own shares in every mining company granted a lease, according to a new policy approved by the Cabinet this month.

Uganda’s Mining and Minerals Policy 2018 also makes value addition mandatory. It is aimed at helping the country achieve maximum economic gains from its natural resources.

The policy is a major shift for the sector where investors owned 100 per cent stakes in mining leases and had the option of exporting raw ore.

The change of law has been necessitated by continuous land conflicts in mining areas, an increase in corruption in the issuance of licences, a sector crowded by speculator who lock up investments, the need to stop environmental degradation and deprivation of benefits arising from mineral exploitation to host communities.

“The revised laws will help us revive the mining sector,” said Permanent Secretary in the Ministry of Energy Robert Kasande.

Uganda’s policy change comes at a time the country’s mineral sector is beginning to attract exploration and mining giants like Australia’s Rio Tinto, which last year signed a $57 million farm-in deal with another Australian firm Sipa Resources.

Sipa Resources, which started operations in Uganda in 2012, made discoveries two years later of rare earth minerals in Kitgum in the country’s north. Rare earth minerals contain elements used in making parts for digital and electronic items.

The new policy requires that the investors must have sufficient capital to carry out exploration, exploitation and value addition, in line with their licences. This means that once implemented, the new policy will automatically kick out mineral speculators.