Busia gold investor warns power outages threaten mining operations

BUSIA - The multibillion-shilling Wagagai gold mining investment in Busia district has raised concerns over persistent power outages as the company prepares to enter its production phase in July this year.

The company has described electricity as a critical component of its operations, but said the unstable supply poses a significant threat to the firm’s state-of-the-art equipment, increasing the risk of damage.

Wagagai’s general manager, Tan Jiu Chang, has appealed to the Uganda Electricity Distribution Company Limited (UEDCL) to address the issue as the company gears up to begin testing its machinery in May and June.

“We are worried that our production is being affected by the frequently off and on power supply,” Tan said.

Be patient, residents told

Wagagai management has urged both local and national leaders to moderate their expectations and give Uganda’s largest gold mining concession time to grow.

Tan called for patience, asking the leaders to allow the company to recover its investment costs as it gradually expands and develops alongside the community. His remarks came after area leaders presented a list of expected benefits from the project.

Christine Nasisamba, the district vice chairperson, led a delegation comprising resident district commissioner Hajira Namagogwe, district councillors, technical staff, and officials from the Obwen’engo bwa Bugwe during a pre-commissioning visit to assess the project’s progress.

Some of the anticipated benefits include an estimated sh6 billion in property tax, a community development engagement plan recently passed by the Busia District Council, payment of local service tax, employment opportunities for locals, and corporate social responsibility initiatives by Wagagai.

Additional expectations included support for the kingdom’s education scheme, construction of the Obwen’engo (King's) palace, and provision of a vehicle for the kingdom’s prime minister’s office. Some of these demands have already been discussed between the parties.

(L-R) Busia RDC Hajirah Namagogwe, Tan Jiu Chang, Busia district speaker Charles Malowa Kudedi and Christine Nasisamba, the vice chairperson LC 5 Busia district before the press. (Credit: Egessa Hajusu)

Community concerns

Nasisamba also called on Wagagai to rebuild Alupe Primary School, which was damaged during the company’s operations, and to address a series of community grievances.

These include over 150 cracked houses, dust and pollution, dried-up water sources, and poor access roads in Buteba subcounty, where the company is based.

Susan Wandera, the deputy mayor of Busia Municipality, added that Wagagai’s heavy machinery had significantly damaged roads in Busia town and urged the company to intervene.

Tan acknowledged the concerns and pledged to look into them, while commending the community and local leaders for their cooperation, which he said had enabled the project to reach its current stage.

Support for artisanal miners

Tan also expressed willingness to support artisanal gold miners in the area by offering access to Wagagai’s refinery services. This followed appeals from some small-scale miners, who said they were often cheated when forced to travel to Kam`pala for refining.

The artisanal miners welcomed the idea, describing it as a major relief if Wagagai agrees to provide access to its modern refining facilities.

Wagagai Mining Limited is a wholly owned subsidiary of Liaoning Handong Enterprise. It operates within a 92.2-hectare mining area with mineral reserves totalling 25 million tonnes, at a grade of 1.09g/tonne, and an estimated 25 tonnes of gold metal.

Its processing plant has a designed capacity of 5,000 tonnes per day, featuring three-stage crushing and one-stage screening.

Construction of the first phase, which began in 2019, is now complete. An additional US$200 million will be invested in the second and third phases, planned for 2027 and 2030, respectively.

President Yoweri Museveni is expected to preside over the commissioning of phase one in July this year.