December 5, 2009 / 11:19 AM / 8 years ago

Uganda's 2009 mineral exports earnings seen edging up

<p>Uganda's President Yoweri Kaguta Museveni attends the "India-Africa Forum Summit 2008" in New Delhi April 9, 2008. India and Africa vowed on Wednesday to strive together for food security and called on the western world to rethink diverting huge food stocks for biofuel, creating shortages and driving up prices in poorer countries. REUTERS/B Mathur (INDIA)</p>

KAMPALA (Reuters) - Uganda expects to earn about $55 million from its mineral exports this year, higher than $52.7 million in 2008, a government official said.

The east African nation’s mining sector is viewed as underexploited with small scale miners mainly involved in gold and cobalt, the leading mineral exports. Earnings from the resources reached a high of $88 million in 2007.

Uganda recently completed mapping 80 percent of the country and the geological data obtained is already spurring increased investor interest in the sector, Joshua Tuhumwire, head of the department of geological survey and mines, told Reuters.

“There is an increase in the number of companies taking up exploration licenses. The number of licenses currently is about 500 from 360 one year ago,” Tuhumwire said in an interview late on Friday.

The lingering impact of the global economic crisis was stifling investments in Uganda’s mining sector, he said.

“Exploration investment funds are raised on stock markets mainly in Toronto, London, Vancouver, New York, Australia and others,” he said. “With the economic downturn... exploration spending has gone down remarkably, and Uganda has been no exception.”

A three-year geophysical survey whose findings were released in July showed Uganda has sizeable deposits of a variety of minerals including phosphates, collumbite tantalite, chromite, diamond, gold, tin and wolfram.

Uganda was a major exporter of copper in the 1960s, from the vast deposits at Kilembe mine on the foothills of the Rwenzori Mountains in the country’s southwestern region.

The subsequent sharp drop in copper prices on the world market caused the mine to be shut and the government has been shopping for private investors to revive it.

Tuhumwire said he hoped a number of current exploration projects by small and medium-sized companies would be successful, helping the drive to attract major firms into the sector, through mergers and acquisitions.

The country’s land laws were frustrating the drive to attract much needed investments into the sector, Tuhumwire added.

“Whereas the Constitution vests land in the people, minerals are vested in the government and it becomes difficult to explore or exploit the minerals when landowners refuse a mineral license holder access to the land,” he said.

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