Govt introduces $200 levy on refined gold, bans export of unrefined gold

Kampala, (UG):- Government of Uganda has announced a new levy of U$200 per kilogram of refined gold for export and also banned the export of non-refined gold in a significant move seen to to bolster the country’s mining sector.

The development comes after the Mining and Minerals (Export of Refined Gold) Regulations 2024 became effective on May 24, 2024, and after two meetings between the Gold Refiners Exporters and Dealers Association, represented by their lawyers, the Kampala Associated Advocates (KAA), and President Yoweri Museveni about the future of the sector.

The newly gazetted instrument comes at a time when the previous statutory regulation expired on June 30, 2023. Unlike its predecessor, the new law mandates that all exported gold must meet an international purity standard of 99.9%.

This measure aims to ensure value addition within the mining industry, aligning with Uganda’s broader policy on enhancing the value of its natural resources.

Uganda is rich in essential mineral resources, which could drive its transition to a green economy boasting of large deposits of gold, uranium, limestone, marble, graphite, iron, copper, and cobalt, among others.

While these minerals significantly boosted Uganda’s economy in the 1950s and 1960s, contributing up to 35% of export earnings, the mining sector’s contribution has now dropped to below 3%.

In 2021, the sector accounted for 2.3% of Uganda’s GDP, according to the Ministry of Finance.

This decline is partly due to the export of unprocessed minerals, the prevalence of artisanal miners, especially in gold mining areas like Buhweju and Mubende, as well as the influence of foreigners, government insiders, illegal miners, and smugglers.

In December last year, the Minister of Energy and Mineral Development, Ruth Nankabirwa, signed a new regulation setting higher purity standards for tin exports.

This initiative backs President Museveni’s directive to stop exporting unprocessed minerals, including tin.

The new regulation raises the minimum purity level for tin exports to 99.85%, up from the previous range of 67% to 70%. This is expected to significantly impact Uganda’s tin mining and processing industry.

Industry experts view this development as a positive step towards improving the quality and marketability of Ugandan minerals on the global stage. By prohibiting the export of non-refined gold and enforcing strict purity standards, the government intends to maximize the economic benefits derived from its mineral wealth.

The imposition of the levy and the enforcement of stringent standards are expected to incentivize local refining, thereby creating jobs and fostering technological advancement within the sector.