Uganda launches major Chinese-backed gold mine to boost economy

Image credit: Marko Ivanov on Unsplash

The landlocked East African country, which has a variety of minerals including copper, cobalt and iron ore, wants to expand its mining industry and position itself as a major gold producer and exporter.

Last year, Uganda raised $3.4bn from gold exports, according to central bank data, about 37% of the country's total export revenue. The figure includes the re-export of gold brought into the country, with nearly all its domestic production from small-scale artisanal miners.

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While its gold export earnings have increased in recent years, it is still far behind Africa's largest bullion producer, Ghana, which raised $11.6bn from shipments of the metal last year.

"In order to wake up in the minerals sector, we must have full value addition for all minerals like gold, lithium, tin, among others," President Yoweri Museveni said in a statement.

The Wagagai Gold Mining Project, owned by Wagagai Mining (U) Limited and covering just over nine square kilometres in Busia district, was inaugurated by Museveni.

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The plant, which has started operations, is expected to process 5,000 tonnes of gold ore per day and produce about 1.2 metric tonnes of refined gold a year, according to the statement. That compares to Uganda's total domestic production of just 0.0042 tons in 2023.

Uganda will use the revenue generated by exporting gold to develop assets such as power stations and the country's railway, Museveni said.

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Landlocked Uganda is currently constructing a €2.7bn standard gauge railway to reduce the cost of transporting its exports and imports via neighbouring Kenya.