Uganda and Tanzania are closing gaps in the mining sector

Experts are calling on authorities to unlock financial and regulatory opportunities to boost growth

Dar es Salaam, Tanzania | JULIUSZ BUSINGE | The public and private sectors in Uganda and Tanzania must address gaps in mining activities to create opportunities in line with their development plans.

Speaking at the 2nd Uganda-Tanzania Business Forum held in Dar es Salaam on May 23-24, Sebastian Kolowa, who moderated a panel discussion on the mining industry value chain, said both countries are emerging economies with significant potential to generate revenues, industry development and socio-economic transformation through the mining sector.

“Despite the potential benefits, the mining industry in Uganda and Tanzania faces various challenges, including regulatory uncertainty, infrastructure deficits, environmental issues and access to finance,” Kolowa said.

He said that tackling these challenges requires collaboration between governments, the private sector and civil society to create an enabling environment for responsible and sustainable mining practices.

Humphrey Asiimwe, Chief Executive Officer of the Uganda Chamber of Mines and Petroleum, stressed the importance of learning from Tanzania’s advanced mining sector, in particular its success in developing the artisanal mining sector and improving market access for artisanal miners.

He noted that Uganda’s recent adoption of the Minerals and Mining Act 2022, which recognizes the role of artisanal miners, was inspired by Tanzania.

Currently, Tanzania’s mining sector contributes 9% of GDP, while Uganda’s contribution remains constant at 2%.

Asiimwe encouraged Tanzanian mining companies to explore investment opportunities in Uganda, stressing that geology knows no boundaries. He also stressed the importance of maintaining a stable investment environment and urged governments to play a key role in creating an attractive investment climate.

“Instead of providing donations, livelihoods should be increased. Mining companies should engage in corporate social responsibility initiatives as a social license to operate in communities,” Asiimwe said.

He noted that while Uganda faces mining skills challenges, these skills exist in Tanzania and can be shared in mine chambers and other collaborative spaces.

Benjamin Mchwampaka, executive secretary of the Tanzania Chamber of Mines, highlighted Tanzania’s success in gold refining, noting the presence of two gold refineries.

He revealed the Tanzanian government’s interest in purchasing a $400 million malting machine to increase the value of raw materials and improve production quality.

Mchwampaka pointed out that Tanzania’s mining sector generated 19% of GDP last year, while gold exports accounted for 56.9%. He stressed the importance of mapping and collecting geological data on minerals commonly found in Uganda and Tanzania, including gold, coal and others.

Mchwampaka also stressed the need to focus on large-scale mining rather than small-scale activities, and proposed the establishment of geological centers in various districts to support this initiative.

Emphasis on added value

Chris Lubangakene, Deputy Commissioner at the Ministry of Energy and Mineral Development in Uganda, highlighted the government’s bold move to encourage value addition to mineral resources, citing mineral value chains as key to economic development.

He highlighted Tanzania’s successful gold mining strategies as a learning opportunity for other African countries, including Uganda. Lubangakene stressed that Uganda intends to invest in data management for the mining sector, stressing the importance of accurate data in monitoring minerals contracts and attracting investment.

He advocated for national participation in the sector through mining cooperatives to ensure that local communities benefit from mining activities. “In terms of local participation in gold mining, 30% of services are provided to the gold mining sector in Uganda,” Lubangakene said.

He added that the two countries could cooperate in developing ongoing mining projects in Uganda, such as phosphates and graphite projects, which are crucial to reducing dependence on mineral imports and promoting local economic development.

Henry Zephaniah from the Tanzania Mining Commission presented insights on engaging local communities in the mining sector through an effective minerals policy and regulatory framework.

He stressed the importance of a social license to operate, which involves investors engaging with communities to reach agreements and offer incentives such as compensation.

He also emphasized the need for investors to cooperate with local governments to ensure that the community understands their role and expectations in mining projects. He stressed the importance of the Memorandum of Understanding (MoU) as a key condition for successful cooperation.