The European Union Delegation to Uganda (EU) and the German Federal Ministry for Economic Cooperation and Development (BMZ), have put up €6.25 million to support Uganda’s mining industry, under a project called Sustainable Development of the Mining Sector in Uganda (SDMU).
The 33 months project that will run till the end of September, 2027 aims at tackling challenges like the informality in artisanal and small-scale mining (ASM), limited value addition, and governance gaps in Uganda’s mining sector.
In so doing, it seeks to enhance the sector’s attractiveness for sustainable socioeconomic growth, specifically focusing on improving the investment climate and transparency, supporting the formalization of ASMs, strengthen regulatory frameworks and oversight plus promoting value addition and mineral processing.
Speaking at the launch of the project in Munyonyo, Kampala last week, Ambassador Jan Sadek, the Head of the EU Delegation to Uganda noted the substantial mineral deposits in the country that are essential in the global green energy transition, including rare earth elements (REEs), graphite, copper, cobalt, lithium, nickel and iron ore.
“These minerals are vital for renewable energy technologies such as electric vehicles (EV) and battery storage solutions. Just the other day the German Embassy and GIZ together with the Energy and Mineral Development inaugurated the first EV charging station. This is a very positive trend; as minerals can play a vital role providing for Uganda the opportunity to become a key player in the global transition towards a sustainable future,” said Sadek.
Over the last decade or so, the global energy transition to renewable sources has necessitated a surge in demand for “critical minerals” like lithium, nickel, cobalt, copper, and REEs, which are essential components of batteries, wind turbines, and EV technologies.
The global EV market has seen a surge in sales, with EV sales exceeding 10 million and 14% of all new cars sold being electric last year, up from 9% in 2021.
In May 2024, the EU’s Critical Raw Materials Act (CRMA), was enacted to secure and diversify its supply of essential minerals, reduce reliance on single suppliers, and promote sustainable and circular practices within the critical raw materials value chain, thereby bolstering the EU’s economic and strategic resilience.
The SDMU is one such project that the EU will expect to help it achieve these targets. Relatedly, the EU-Uganda Business Insights 2025, held last month, also focused on supporting sustainable mining in Uganda.
“It was another testimony of the EU’s increasing engagement to support the development of Uganda’s mining sector. Participants there agreed that alignment of Uganda’s mining operations with international standards is of particular importance as it ensures that Uganda’s minerals can be exported to key markets like the EU, which requires compliance with various regulations such as the CRMA,” Sadek noted.
Ruth Nankabirwa, the Energy and Mineral Development Minister hailed the SDMU project as a timely intervention, seeing that Uganda’s fourth National Development Plan (NDP IV) identifies mineral development as a key priority driver for the country’s transition to an upper-middle income economy.
“The critical interventions of NDP IV (2025/26 to 2029/2030) will be in ATMS, that is, Agriculture, Tourism, Minerals and Science. However while these are very important sectors, the national budget is never enough to support them due to other competing interests; that is how we always end up with “unfunded priorities”. We are therefore always very grateful to our partners because they help address these budgetary shortfalls,” Nankabirwa said.
Though blessed with promising mineral occurrences, Uganda’s resources remain useless unless they are exploited, the minister noted; a challenge she hopes will be addressed through efforts like the SDMU project.
In his presentation, David Otieno, the Head of Energy and Climate Programm, GIZ, Uganda quoted a 2023 study by the Fraser Institute, which ranked Uganda 68th out of 86, in attracting mining investment.
In 2022/23 mining contributed 2.2% to Uganda’s Gross Domestic Product (GDP). During the 1950s and 1960s the sector hit peak levels, contributing up to 30% of Uganda’s export earnings and 7% of GDP largely due to copper production at Kilembe, in Kasese.
With Sarrai Group recently getting concessionaire rights to redevelop the Kilembe mines, it is hoped that the sector’s value will grow again.
Today artisanal and small-scale mining (ASM) produces 90% of total mining output in Uganda; while employing 60% of the mining workforce (600,000 directly, 2 million indirectly). Women make up 50% of these ASM workers, often earning wages as low as $1.4 (UGX 5,150) a day, noted Otieno.
Outside ASM, other minerals projects that are taking shape include Blencowe Resources’ Orom-Cross Graphite project in Kitgum, Ionic Rare Earths’ Makuutu REEs venture in eastern Uganda and Wagagai’s gold scheme in Busia, among others.
For the SDMU project, the EU and BMZ will partner with the MEMD and the Department of Geological Surveys and Mines (DGSM) plus related government agencies including the National Environment Management Authority (NEMA), the Uganda Revenue Authority (URA) and the Uganda Investment Authority (UIA).
Other collaborating institutions include the Uganda Chamber of Energy and Minerals (UCEM), the Uganda Association of Artisanal and Small-Scale Miners (UGAASM), the Private Sector Foundation, Uganda (PSFU) plus several from banking and academia.
BMZ is the German government ministry that commissions GIZ.
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