Africa Economy: Uganda lifts controversial ban on export of raw minerals

Uganda's lifting of a ban on export of crude minerals has excited local and multinational industry players despite the move having ramifications.

Mining companies under their umbrella association Uganda Chamber of Mines and Petroleum (UCMP) in a statement on Friday said the ban had stalled the development of the mining sector.

"The doors have indeed been swung wide open to welcome any investor interested in unlocking Uganda's mining potential in any of about 50 minerals that Mother Nature blessed us with," the mining association said.

The government early this year instituted the ban following a directive by the country's President Yoweri Museveni who argued that Uganda was losing millions of U.S. dollars and jobs by exporting unprocessed minerals.

He said minerals, unlike agriculture, fisheries and tourism, were exhaustible and, therefore, should be handled with care.

"Since the exhaustibility of these minerals is inevitable, they must be used in such a manner that by the time they are finished in the ground, Uganda has been pushed to a new level of development and can go on without those minerals."

He said there is pressure to export these products for quick foreign exchange.

"If we carelessly export these and they are exhausted, in future, our children will have to import these same products from outside at a much higher price," Museveni said.

Government figures show that one tonne of unprocessed vermiculite costs 25 dollars while a tonne of processed vermiculite fetches 410 dollars.

The government on Aug. 19 rescinded its decision to ban the export of raw minerals. Mining companies have been lobbying government to lift the ban.

Official data shows the country has tonnes of iron ore, nickel, copper, gold, silver and other rare earth elements which when thoroughly explored and produced will earn the country more revenue than it gets from oil and gas.

The east African country is also endowed with other vast and diverse metallic and industrial minerals with commercial potential that include manganese, tin, wolfram, beryl, bismuth, colombite tantalite, chromites, diamonds among others.

The miners association urged its members that although the ban has been lifted, they should follow the government policy of adding value to the minerals.

"For the companies that are coming here, value addition is the cardinal way forward," UCMP said. Endit