Miners vow to focus on value addition
Aug 25, 2015
The Uganda Chamber of Mines and Petroleum has said lifting the total ban on the exports of minerals was not a license for miners to export unprocessed minerals.
By John Odyek
The Uganda Chamber of Mines and Petroleum has said lifting the total ban on the exports of minerals was not a license for miners to export unprocessed minerals.
Government last week told participants attending the Presidential Investors Round Table at State House Entebbe that the ban on the exports of unprocessed minerals would be lifted.
Elly Karuhanga, the president Uganda Chamber of Mines and Petroleum said lifting of the ban is not a license for miners to export 'soil' (ore) to the world and fail to add value to the minerals.
"In fact the government of Uganda has not lifted the ban on copper and iron ore exports. We are not going to export any 'soil' to the international business community as our grandfathers and fathers did. That is too much of an African story. For the companies that are coming here, value addition is the cardinal way forward. The mining community in Uganda is very keen to add value because they too will greatly benefit," Karuhanga said in a statement over the weekend.
Karuhanga said a clog in the development of the mining industry that had frustrated the sector for quite some time had been removed by lifting the ban. He said lifting the ban has prevented mining companies from breaching contracts with their various suppliers.
He said the building of roads, hydro power plants and standard gauge railway further supports the goal for value addition. "Value addition should revolve around not only minerals but also around the entire chain; including emphasis on local content. Without local content, the value addition process is insufficient," he said.
Government early this year slapped a total ban on the exportation of unprocessed minerals with the intention to improve value addition. The ban affected the exploration and exportation of minerals such as gold, 3Ts (tin, tantalum and tungsten), vermiculite, iron ore, copper, nickel and zinc. It had also led to job cuts in various mines and companies.
"All the mining companies had been issued with licenses and they were of legal value; so enacting the ban had not only breached the contracts with investors but had frustrated any developments that they would have been looking forward to," Karuhanga added.
He observed that the ban had also challenged the investment climate and as a consequence Uganda could not record any exports of minerals during the time of the ban.
He commended government for reviewing the laws, taxes and regulations on mining to make the legal regime friendly for investors.
With the lifting of the ban, Irene Muloni, energy minister and mineral development said Uganda stands to benefit US$2.15b (sh7.7trillion) from royalties from iron ore, gold, vermiculite and limestone. The ministry of energy reported that between 2012-2014 mineral exports fetched sh162b and since January this year the ministry had not reported any earnings from the sector due to the ban.