Miners in crisis as ban on unprocessed minerals bites

KAMPALA, UGANDA: Cabinet is expected to meet this week meet to consider whether to lift a ban on semi-processed minerals. Uganda is among countries like Tanzania, Indonesia that banned the export of raw minerals.

There are indications that the ban has taken a toll on mining operations since 2013 when President Yoweri Museveni imposed a moratorium on the export of unprocessed iron ore and a ban on all others minerals in February 2015.

Mining companies have been urging the government to lift the ban. They have argued that Uganda does not have the processing capacity for all of its ore, so, the ban has forced many to scale back production.  Some mining companies have threatened to suspend operations entirely since the bulk of their revenue comes from the export of semi-processed minerals, especially gold.

Amidst the concerns, the new Energy and Minerals Minister, Ruth Nankabirwa is faced with a policy dilemma on whether to maintain the ban or lift it to unlock the sector from underperformance.

Nankabirwa was hesitant to reveal whether the ban should be lifted at the time when she has publicly declared intention to accord the mining sector similar attention to accorded the oil and gas.

She said the question about the ban will be taken by a cabinet meeting this Monday upon considering a technical briefing paper by the Directorate of Geological Surveys and Mines -DGSM.

“I will be able to give you concrete information after a paper I’m presenting to cabinet on Monday is done,” said Nankabirwa.

President Museveni in February 2015 suggested a ban on the export of unprocessed and semi-processed-minerals saying the country was not benefitting from its vast mineral resources.

Museveni, then addressing the NRM Parliamentary caucus said there was need to put an end to what he described as a historical mistake of exporting minerals without adding value to them.

The then Minister for Energy and Minerals, Irene Muloni effected the ban in July 2015. She said while the country needed money from the export of minerals, it needed to get more value.  “Why do we donate raw materials to the outside world?” asked Muloni then.  “We need the money yes. But is it worth donating an item at maybe 10% of its value? Whereas if you actually processed it here, you are going to add value, you are going to create jobs for our people. And with value addition, you are going to earn more as a country,” said Muloni.