When you google Uganda and gold you will for sure get a lot about how our very own army robbed the Democratic Republic of Congo of its precious minerals in a five-year war that ended in 2002. Little is known about people and companies behind the minerals industry in Uganda. Even with an airborne geophysical survey that was released last year that talked about our mineral deposits, few Ugandans or even in the media quite understand how our mineral industry works.
As of last year Uganda had only two gold mines, in Busia and Mubende established.There’s still untapped potential for investors to venture into mineral development and production. The Tira Gold Mine has been operating in Busia since 1994, producing about 3kg of gold a month. The second mine is being developed in Kamulenge in Mubende by AUC Mines.
This year Uganda saw the opening of the first gold refinery. The $1.5m (£990,000) refinery is operated by the Russian-owned firm Victoria Gold Star and has the capacity to produce at least 10kg of gold a day.
Looking at the level of development of the gold mining in Uganda, you wouldn’t expect Uganda to have huge gold exports but we do. And the origin of that gold we have been exporting is detailed in a series of UN reports on the bloody Congo minerals.
Last year a UN official said about 40 tonnes of gold is smuggled annually out of the Democratic Republic of Congo, most of it shipped to Dubai via Uganda most of it from the rebel controlled provinces of DRC.
The minerals trade runs together with arms trade with some companies set up in Kampala which are registered as arms dealers but they do what I can call barter trade with middlemen in Congo’s minerals.
According to the Uganda Export Promotion Board, the country exported a total of $342m worth of gold between 2003 and 2008. A record $122.6m worth of gold and gold compounds was exported in 2006 way higher than what Uganda can produce.
Uganda being a country where business survival is about patronage, I would want to think that most of these companies trading in Congo gold and other minerals have godfathers in our government.
At the weekend, President Joseph Kabila issued a ban on the mining in three provinces of eastern DRC where decades of fighting between government troops, militias and rebel groups have left millions killed, turning the region into one raping field, leaving thousands displaced and others as refugees.
Kabila ordered an indefinite suspension on mining in North Kivu, South Kivu and Maniema but it’s not clear how such a suspension will work.
The major problems stem from the fact that Kabila’s government is not in control of a good part of these provinces. But my concern is that regional governments benefit a lot of the situation in the Congo and will be adamant in helping such a ban to succeed. Many generals in governments have been named among the looters but many high up in government continue to trade in conflict minerals through some fronted fake companies.
The move is good step but who will ensure that Uganda does not harbour companies and international dealers in minerals who will continue to assure the rebels an interrupted trade route. And Uganda is not alone, Burundi and Rwanda have also been in the spotlight.
I believe for this ban succeed, we must deny the rebels the market and you can’t do this unless regional governments are pressured to stop supporting the illegal trade.