Mining, Oil & Gas

Uganda launches US$15 million gold refinery

Ugandan President Yoweri Museveni has launched a US$15 million (UGX 52 billion) gold refinery in Entebbe, a first of its kind in East Africa. It is expected that the Africa Gold Refinery facility will see Uganda export more refined gold as opposed to trading in the unprocessed metal ,  through which the country losses several million dollars to European buyers.

Museveni said his government is working towards improving the contribution of mining- still largely artisan- to the GDP. He announced scrapping of a 5 per cent royalty tax charged to miners arguing that the tax encouraged smuggling and people trading un-documented.

Bank of Uganda (the central bank) Executive Director for Research, Dr. Adam Mugume recently told local media that gold is now Uganda’s second biggest value commodity export, after coffee. In 2014/15 gold raked in about US$250 million to the state coffers. The rise in value of Uganda’s revenues from gold exports are attributed to the value-addition (processing) that is now done in-country, as opposed to the past when gold was exported raw.

The African Gold refinery has been in operation since 2014.
Advocacy group, Global Witness, however said Uganda doesn’t produce enough gold to warrant a processing plant, courting suspicions that Uganda’s increased gold sales could be coming from the Democratic Republic of the Congo and South Sudan, both of which are conflict zones.

The African Gold Refinery (AGR) is owned by Belgian investor, Alain Goetz. The company said its choice to locate the refinery in Uganda was based on the country’s stability, conducive investment environment and strategic location in the Great Lakes region
“Owing to Uganda’s peace, stability and recognized thriving mineral industry….the state-of-the-art high capacity gold refinery will boost the foreign earnings of the country, revenues, creation of jobs, transferring of skills and bringing-in new technologies,” Africa Gold refinery said in a statement.

AGR said feasibility studies show that in spite of the growing importance of minerals to African economies, the region has only one refinery in South Africa and AGR’s facility in Uganda will only be the second in Sub-Saharan Africa that is focused in gold processing with the ability to refine raw gold to pure gold of (99.99 per cent).
The company is also planning establishment of the Geochemical Laboratory for assaying all mineral samples in the African continent.

On accusations that possibly Uganda exported gold has roots in mineral rich- Democratic Republic of Congo or South Sudan, AGR said it follows strict international regulatory frameworks.
“AGR regulates its business activities and practices in accordance with the OECD and ICGLR guidelines, which are implemented at every level in our workplace. AGR ensures that our engagement with minerals sector benefits the local communities as well as the country while preventing risks in the supply chain.”
AGR said by “pursuing a strict acceptance policy with respect to its customers and suppliers as well as obtaining the Know Your Customer (KYC) information, for assessment, for use by government officials or concerned authorities if required…. We at AGR exclude the proportion of ‘conflict minerals’ from the markets.”
AGR said they conduct a complete transparent smelting and refining process which conforms to international safety regulations. “All refining is by the proven Aqua Regia process. Refining process and melting process is intended to be transparent to ensure that it is done by an environmentally responsible method.”

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