Gold miners seek affordable loans to end mercury use
Emilian Manishiwa, the project leader at PlanetGold Uganda, said switching to mercury-free extraction methods required substantial investment in machinery, specialised equipment and additional labour. "Other methods of mining gold require a lot of labour and are time-consuming. Besides that, machinery costing between $1,000 (sh4m) and $8,000 (sh32.6m) is prohibitive for budding miners," he said.
The miners said although gold is a lucrative commodity, many small-scale operators cannot access the capital needed to invest in alternative extraction technologies. Lengthy loan approval procedures, high interest rates and collateral requirements have left them relying on expensive informal lenders and continuing to use mercury.
KAMPALA - Artisanal gold miners have appealed to financial institutions to provide affordable loans to help them acquire safer gold-processing equipment and abandon the use of mercury, saying high interest rates and stringent lending conditions are frustrating the transition.
The miners said although gold is a lucrative commodity, many small-scale operators cannot access the capital needed to invest in alternative extraction technologies. Lengthy loan approval procedures, high interest rates and collateral requirements have left them relying on expensive informal lenders and continuing to use mercury.
A kilogramme of gold can fetch about sh500m on the international market, but miners say commercial banks remain reluctant to finance their operations.
They raised their concerns during a symposium attended by government officials, bankers, legislators and representatives of the mining sector at the Serena Hotel on November 5, 2026.
Emilian Manishiwa, the project leader at PlanetGold Uganda, said switching to mercury-free extraction methods required substantial investment in machinery, specialised equipment and additional labour.
"Other methods of mining gold require a lot of labour and are time-consuming. Besides that, machinery costing between $1,000 (sh4m) and $8,000 (sh32.6m) is prohibitive for budding miners," he said.
Manishiwa said some miners had resorted to alternative loan providers charging interest rates exceeding 20% because conventional financial institutions impose conditions that many small-scale operators cannot meet.
He urged banks to develop lending products that recognise the realities of artisanal mining, including the value of mineral deposits and expected production.
Mercury use raises concern
Dean Ocana, a researcher at PlanetGold, said research findings indicated that mercury use among artisanal miners was increasing, particularly at Busia, Tira and Kayonza mining sites.
He attributed the trend to entrenched mining practices, inadequate capital to acquire alternative processing equipment and miners' desire to make quick returns.
The proposed deadline puts pressure on miners, financial institutions and government agencies to accelerate the transition to safer extraction methods.
Mercury is widely used in artisanal gold mining because it binds with gold particles to form an amalgam, making it easier to separate gold from other materials. However, heating the amalgam releases toxic vapour that can expose miners and surrounding communities to serious health risks.
Improper disposal of mercury can also contaminate soil and water, allowing the toxic metal to enter food chains and threaten people, livestock and aquatic life.
Health and environmental risks
National Environment Management Authority (NEMA) board member Dr John Ekure warned that mercury contamination extended beyond mining sites, potentially affecting surrounding communities through contaminated water, food and agricultural products.
"The dangers of mercury are right in our midst, among newborn babies, marine life and food grown in our gardens," Ekure said.
He cautioned that the economic benefits of gold mining should not come at the expense of public health. "It does not make economic sense for you to make wealth and lose your health," he said.
Ekure also raised concerns about mercury's effects on the lungs, kidneys, skin and digestive system, warning that environmental contamination could affect dairy and poultry production.
Gold's growing economic importance
Economist Siraj Magara Luyima said gold had become Uganda's leading export earner, overtaking coffee, which highlights the growing importance of the mining sector.
Gold accounted for approximately 56.5% of export earnings, while coffee contributed to 13.9%. Together, the two commodities generated about $11.1b, representing approximately 70.4% of Uganda's export earnings.
Siraj said the country's mineral deposits presented opportunities for investment, employment and export earnings, but unlocking their potential required financial institutions to reconsider their lending conditions.
"Deposits are spread across the country. It is time for monetary institutions to put in place products and terms that address the needs of miners. They want sh50m to sh500m instantly," he said.
He questioned why banks were reluctant to extend substantial credit to miners despite the potential value of their operations.
Miners challenge banks
The concerns were echoed by Joseph Akut, a miner from Busia, who questioned where miners could access the money banks said was available for lending.
Musa Ndugha from Kassanda said restrictive lending conditions made it difficult for miners, who sometimes needed immediate cash for mining activities.
He explained that some deals required upfront payments, with the expectation that the investment would be recovered within days.
"The terms are so prohibitive for a person who wants fast cash to strike a deal and pay back in less than a week. Time is gold," Ndugha said.
Equity Bank representative Bob Paul Lusembo said borrowers had to meet certain requirements to qualify for loans.
He advised miners to reduce the risks associated with handling physical cash by using the bank's cashless services, which he said could also help build transaction records for assessing loan applications.