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Special Report: Uganda’s Opaque Gold Mining Laws Facilitating Illicit Financial Flows – Experts

The evocative scenes of Daniel McCabe’s “This is Congo” documentary – centered on big characters like Mama Romance, a plump and light-skinned tourmaline dealer – illustrate the ways conflict and illicit financial flows siphoned mineral wealth out of the Democratic Republic of Congo.

In neighboring Uganda, a surge in exports of gold is a story with many smaller protagonists – artisanal miners who look at risk of being squeezed out the wealth the mineral brings.

Uganda’s gold exports more than doubled in 2019, to $1.2 billion, according to central bank figures cited by Reuters. Analysts and watchdog groups have attributed the expansion of the trade to gold originating in DRC, Venezuela, among others, exported to the United Arab Emirates. Those analysts have pointed to a central role for African Gold Refinery, a Belgian-owned concern.

Activists and artisanal miners from the central Uganda region say the country’s regulatory regime for the mining that supports refining and exports is set up in favor of bigger players, and that the wealth is not trickling down.

Phiona Aryatwijuuka, a programs officer working with Ecological Christian Organization (ECO), says only a handful of miners are able to obtain the licenses needed to work, and that large gold concerns have evicted artisanal miners.

“They will go and process a license at the directorate and just keep quiet. When the time comes, they will come and chase you. And by law that is it,” Aryatwijuuka says.

Lack of licenses

Kassanda Member of Parliament Patrick Nsamba Guma-Oshabe, a member of parliament from the mining-rich Kassanda district, echoes those claims and suggests artisanal miners have been pushed out after discovering deposits, which are then exploited by the major players.

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He cites a dispute between artisanal miners from Kassanda district and presidential adviser Gertrude Njuba, who has ties to Anglo Uganda Corporation (AUC) that got an exploration license in the area. Artisanal miners were evicted from that area in 2017.

Later while renewing AUCs exploration license on April 6, 2018, President Yoweri Museveni directed for 30% of the company’s working area to be allotted to these artisans.

Stampeding ASGMs out of business

Henry Bazira a mineral expert working with Water Governance (WGI) said that the current mining regime was also adversely affecting landowners expecting an income from mining proceeds.

“The old mining act had a provision where the landowners were to benefit about 3% in royalty fees and you know very well that for many years the ministry of energy has been failing to remit that money,” he claims.

According to Auditor General (AG) John Muwanga’s report for the 2018/2019 Financial Year, Uganda’s government should have collected 70 billion shillings in royalties using the application rate of 5% from gold, tungsten, and tantalum. The actual receipts were 10 billion.

Representatives of the Mineral Police Unit did not provide responses to requests for comment. The office of Commissioner in Charge declined to comment, citing the closure of his office during the Covid-19 pandemic. No comment was immediately available on revenue issues from the Uganda Revenue Authority.

The pandemic is also casting a shadow over consultations with stakeholders including artisanal miners on a draft Mining and Mineral law that would formalize policies affecting them. The timing of meetings with them is uncertain due to the national lockdown, said Keefa Kiwanuka, the Chairperson of Parliament’s Natural Resources Committee.

Aryatwijuuka stressed the need for proper oversight of mining activities, including surveys of potentially mineral rich areas. She expressed hope that small miners might form federations to advocate for their collective rights, and eventually form larger concerns of their own, citing precedents for such organization in Tanzania.

Politicization

Speaking to Chimp Reports on June 25, 2020, Gertrude Njuba blamed the entire fracas in the mineral sector on some self-centered politicians who she says have swayed small scale miners from legalizing.

A case in point, Njuba cited the spat between AUC and MUMA which she says to a large extent was fuelled by a section of legislators (without mention names).

“As educated people (MPs) they cannot advise these small miners that it would be more profitable for you to go and acquire a plot legally in the federation,” she said.

“But they continue telling them we are going to fight for you; we need fuel. Things like that,” Njuba added.

AngloUgandan Corporation’s (AUC) Gertrude Njuba.

On the other hand, she lashed at MUMA for exacerbating this problem saying at the core they are merely a cocoon of speculators and exceedingly scrupulous to say.

Rather than encouraging local miners in registering with the Federation of Artisanal Miners of Uganda, Njuba says MUMA continues to encourage illegal mining through demarcation of land without location licenses.

“If you mine and get to about 80 ft and you run short of money and you go away they sell that pit to someone else at a higher price. So that’s how they get their money,” Njuba intimates.

To make matters worse, she says the local media keeps on peddling a calamitous notion that, “that government prefers giving those areas to other foreigners than the local people.”

At the tail end, she says if nothing is done to curb illicit gold mining activities government and investors, crucial revenues shall be lost.

“Government makes money on exploration licenses, AUC was paying over 100 million not for mining but for doing exploration. When you spend that sort of money you want to be able to do your work,” she elaborated.

This story was produced by www.chimpreports.com It was written as part of Wealth of Nations, a media skills development programme run by Thomson Reuters Foundation in partnership with African Center for Media Excellence. More information at www.wealth-of-nations.org

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