According to a new policy approved by the Uganda’s Cabinet, Kampala (Capital City) will automatically own shares in every mining company granted a lease. The development has been hailed as means of achieving efficiency and ensuring equitable and transparent management of mineral revenues.
According to reports, the new law has been inspired by continuous land conflicts in mining areas, an increase in corruption in the issuance of licences, a sector crowded by speculator who lock up investments, the need to stop environmental degradation and deprivation of benefits arising from mineral exploitation to host communities. The policy is a major shift for the sector where investors owned 100 per cent stakes in mining leases and had the option of exporting raw ore.
Permanent Secretary in the Ministry of Energy Robert Kasande remarked that the new law will revive the mining industry in the country. Uganda’s policy change comes at a time the country’s mineral sector is beginning to attract exploration and mining giants like Australia’s Rio Tinto, which last year signed a $57 million farm-in deal with another Australian firm Sipa Resources.