By Deep Earth
The Bank of Uganda (BoU) is expected to reveal the prequalified bidders for its gold purchasing program soon.
According to the bid notice published in April, the evaluation process was meant to take ten (10) working days from the bid closing date of May 7, 2025.
Prequalified bidders are those who have been screened and assessed to meet the minimum requirements of a project, making them eligible to bid on a specific contract. Prequalification ensures that only qualified bidders are invited to participate in the main bidding phase.
The central bank’s gold purchasing program is intended to diversify its foreign reserves, reduce reliance on traditional foreign currency reserves, and mitigate risks associated with international financial markets. Additionally, the initiative aims to support artisanal miners and their livelihoods, contributing to broader economic development in Uganda.
The gold purchasing program emphasizes direct sourcing from artisanal, small, medium, and large-scale miners, aiming to bypass intermediaries and ensure transparency.
BoU’s bid notice was targeted towards gold suppliers and refineries, outlining the terms and conditions for participating in the program – where details on the procurement process, including bid submission dates and evaluation procedures were shared.
In the past, BoU has met with the Uganda Association of Artisanal and Small Scale Miners (UGAASM) – an umbrella body that is made up of 158 associations of artisanal and small-scale miners across the country – to work out partnerships and explain its interest in their gold.
According to John Bosco Bukya, the chairperson of UGAASM, it was agreed that BoU would purchase their gold at globally accepted rates, especially the prices as per the London Bullion Market Association (LBMA) – an international trade association representing the global market for gold and silver bullion.
A kilogram of gold is currently priced at approximately $107,938 according to BullionVault.
“We have agreed that BoU will buy our gold in Uganda shillings at the LBMA rates. However since LBMA rates are largely in the dollar currency, BoU will add a markup of 10% to accommodate the forex discrepancies,” says Bukya.
UGAASM’s Bukya (L) and Michael Atingi-Ego, BoU Governor
Not all the 158 member associations in UGAASM qualify to sell gold to the central bank however, since many are not licensed to mine.
Artisanal and small-scale miners (ASMs) have found adjusting to the Mining and Minerals Act, 2022 rather challenging, especially in complying with safety and environmental guidelines – yet one of the highlights of the amended law was in its recognition and provision for their (ASMs) licensing.
Both the small-scale and artisanal mining licenses require environmental and social impact assessment (ESIA) approvals, among other requirements before a mining license is granted.
According to Bukya, at least $10,000 (about UGX 37 million) is needed to hire a consultant to carry out a thorough ESIA, money that the artisanal miners find quite exorbitant to put up.
In addition, getting a provisional agreement with the landowner where one intends to mine, registering with the relevant authorities, preparing audited books of accounts and proving availability of financial resources to carry out the mining operations all require expensive administrative and legal representation.
More spending goes in paying non-refundable application fees, carrying out land verification, which also requires a Chief Administrative Officer (CAO) to sign off the district lands’ officer’s report and into paying annual ground rent.
In Bukya’s estimation, therefore, one may need to spend from UGX 60 million to over UGX 150 million before qualifying for an ASM mining license.
“Of the 158 members of UGAASM, only the Mubende United Miners Assembly (MUMA) and Buhweju District United Miners Cooperative Society Ltd (BDUMCS) have fulfilled all the requirements for a mining license; and are only awaiting the actual certificate. The Department of Geological Survey and Mines (DGSM) has already communicated this to BoU,” said Bukya, who is also a member of MUMA.
MUMA which comprises of 23 smaller groups of gold miners in Mubende and Kassanda, operates a 1 sqkm area in Mubende while BUDIMICS acquired 35 sqkm of a mining area in western Uganda. MUMA, which produces about three to five kilograms of gold a week, has applied for another mining license in addition to the exploration license it acquired three months ago for an 8.1 sqkm area. It will process its gold at the Fargo Commodities refinery before handing it to BoU.
Having more ASM associations qualifying for mining rights certification is UGAASM’s dream, notes Bukya; who thinks an Environmental Management Plan would be a more affordable and practical alternative to the ESIA requirement for his members.
Gold bars
“Last year, we visited Tanzania with a team from the Ministry of Energy and Mineral Development that was led by the Permanent Secretary and we learned that the ASMs there only needed an Environmental Management Plan to qualify for a mining license. We hope that the same can be adopted here as it is a much cheaper alternative to the ESIA, yet it’s as effective. As of today, acquiring an ASM mining license in Uganda is harder than walking from Kisoro to Karamoja on foot,” he said.
BoU is expected to continue calling for more suppliers going forward, as the number of licensed ASMs grows.
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