“Finally!” President Yoweri Museveni must have thought to himself as he toured the Wagagai Mining Company site and production plant last Saturday, August 16, 2025 during its commissioning.
As the biggest proponent of adding value to Uganda’s minerals; even going ahead to institute a ban on the export of unprocessed ores just over a decade ago, it was certainly fulfilling for him to see a project of Wagagai’s magnitude come to fruition.
After all there have been a number of false-starts registered since the ban took effect. There was the Guangzhou Dongsong phosphates project in Sukulu, Tororo and the Tibet-Hima venture at the Kilembe copper mines in Kasese, amongst several others.
“When you export these unprocessed raw materials, you are cheating Uganda. You are donating our money. This is what we need to resolve,” President Museveni argued then, and repeated in his speech after commissioning the Wagagai plant in Busia district.
He has often recounted a story from a visit to India (around 2008), where he learned that infrastructure like bridges cost much less to build than in Uganda because the steel was locally sourced after adding value to locally-mined Indian iron ore.
Subsequently, his value addition message that had largely been reserved for agriculture-related products like coffee and milk, started being directed to the extractives of minerals and oil and gas.
The standoff on building an oil refinery in Uganda vis-a-vis a crude oil export pipeline to maximize the benefits from the nascent petroleum sector was related to this resolve. Iron ore exportation licenses were cancelled as well – with one requiring a special Presidential clearance before taking any ore out of the country.
“Gold, lithium, tin, whatever – must undergo full value addition. Why? Because we get more money, create more jobs, and the processing plants consume more electricity. These people (Wagagai) are consuming a lot of electricity,” Museveni said last week, as he admonished the Busia LC5 Chairman, Steven Mugeni, who is said to be the leader of the local artisanal miners that have exported semi-processed gold for decades.
Mugeni had earlier shared that a kilogram of his semi-processed gold (86% purity) cost UGX 220 million (about $62,000) as opposed to the UGX 360 million (about $101,000) that Wagagai realizes from its version that is processed up to 99.99% maximum purity.
Referencing the Bible verse from the book of Ecclesiastes about “a time for everything”, Museveni noted that the time for artisanal mining and exporting unprocessed minerals was fast running out.
“Let’s do things properly and get maximum value from our resources. It requires a lot of investments that is why we need partners like Wagagai. I want to congratulate and thank Wagagai for helping us implement our vision,” he noted.
The Uganda National Mining Company (UNMC) needed to be helped by the government to do similar “serious work”, he added.
Mineral development has been identified as one of the potential engines of Uganda’s ten-fold growth strategy – which aims to grow the economy from $50 billion in FY2023/24 to $500 billion by 2040. The other key sectors being agro-industrialization, tourism development, and science – all collectively referred to as ATMS.
Historically, Uganda’s mining sector contributed significantly to the gross domestic product (GDP) and exports, peaking at 7% and 30%, respectively, in the 1960s.
The Uganda Bureau of Statistics (UBOS) says mining added 2.2% to the GDP, in the 2022/23 financial year (about $1.1 billion) – which reflects limited value addition across mineral value chains, a challenge highlighted by the African Mining Vision (AMV) 2009.
Understanding the processing stages
Speaking in March this year, Joseph Enyimu, the Ag. Commissioner Economic Development, Policy and Research Department at the Ministry of Finance, Planning and Economic Development, said the state expects the mineral sector (including oil and gas) to contribute up to $25 billion annually to GDP in the coming years.
In the 2025/26 national budget, UGX 875.8 billion ($ 245m) was earmarked for mineral-based industrial development (including oil and gas), with the money meant to address exploration and resource quantification, establish a minerals-tracking system to ease exports, capitalize the UNMC plus strengthen the fiscal regime and governance framework to facilitate the exponential growth of the extractives.
Other planned interventions include improving accountability and transparency around government revenues, increasing value addition facilities and facilitating private sector participation in the extractives.
With the commissioning of Wagagai, President Museveni now has the blueprint with which he expects other mining investors to duplicate, such that Uganda achieves its mineral wealth potential.
Already players like Sarrai Group, which government handed the redevelopment of the Kilembe copper mines in May this year, Blencowe (Kitgum graphite) and IonicRE (rare earth elements in Busoga) are expected to follow the same plan.
Woodcross Resources, whose tin plant in Mbarara was opened by the President last year, is already there, albeit a much smaller establishment compared to Wagagai’s.
$250m investment
In his remarks, Tan Jiuchang, the Wagagai, General Manager, said the company, a subsidiary of Liaoning Hongda Enterprise Group had invested $150 in Uganda so far since 2019 – in response to the Belt and Road Initiative of China.
“Hongda also dispatched over 200 senior management and specialized technical personnel, procured more than 1,000 sets of advanced mining machinery and equipment, and introduced first-class mining technology and production processes to Uganda,” he said.
Jiuchang (C) gesturing
Before reaching the production stage, Wagagai undertook various licensing procedures, carried out extensive exploration – going 300 meters below the surface, constructed underground tunnels, in addition to mining, transportation, hoisting plus installing mineral processing and refinery systems.
“To achieve the production of 99.99% maximum-purity gold bullions today, we were driven by the Hongda spirit of “Working through Day and Night, Pressing Forward No matter Rain or Shine, Advancing with Courage and Perseverance”. We had to overcome adverse factors such as vast geographical distance, the COVID-19 pandemic, challenging environmental conditions and global economic downturn,” Jiuchang noted.
These efforts had created over 2,000 jobs for Ugandans including the training of more than 700 local workers. The company had also invested almost $1 million in public welfare and charitable activities, and hosted hundreds of inspections and internships for university students, effectively stimulating economic development and improvement of livelihoods in Busia district.
Echoing President Museveni’s message, Jiuchang noted that Wagagai had brought advanced mining technology and management experience to Uganda, “and injected strong momentum into Uganda’s mineral industrialization and value addition process.”
However, he asked for more government support to overcome a few challenges, so that the company can complete Phases II and III.
“We plan to invest another $50m by 2027 to extract ores at depths of 300 to 600 meters underground, plus an extra $50m by 2035 to develop ores at depths of 600 to 1,000 meters underground,” Jiuchang said.
By then, he added Wagagai will be producing 1.2 tonnes of gold annually, generating about $100 million in forex earnings.
“We will also stimulate the development of other industries such as agriculture, real estate, logistics, healthcare and tourism, which shall combine to create around 5,000 jobs in future,” Jiuchang said.
Zhang Lizhong, the Chinese ambassador to Uganda said the Wagagai project – that will contribute about $ 10 million in annual tax revenue to the Uganda coffers – will “inject new impetus to China-Uganda cooperation.”
Gold’s Broad Role
Ruth Nankabirwa, the Minister of Energy and Mineral Development noted that gold had become Uganda’s leading export, generating $3.8 billion in the last financial year alone, noting that projects like Wagagai would position Uganda as a regional hub for mineral processing and trade.
“By refining our gold here, we are ensuring job creation, retaining wealth and creating a model for the region to follow,” she said.
Nankabirwa
The Wagagai project sits on over 25 – 30 million tons of gold ore (in raw form) with a grade of 1 – 1.5 grams per ton. Other gold deposits in Uganda are found in Kassanda, Mubende, Busia, Namayingo, Ibanda, Bushenyi, Buhweju, Kisoro and in Karamoja.
Industries like electronics, dentistry, medicine, military, aerospace and jewelry utilize gold. It is also a reserve asset for central banks to stabilize currencies and hedge against economic instability – a strategy that the Bank of Uganda has adopted recently.
The minister noted that since the first commercial discoveries of gold in Tira, Busia over a century ago (in 1915) the district had become a hub of artisanal and small scale mining (ASM).
Increased efforts to formalize the ASMs in the country through the Biometric Registration of Artisanal and Small-Scale Miners (BRASM) to capture miners’ data and integrate them into a regulated system, would see Uganda realize much more from its mineral resources, she added.
Nankabirwa also said plans to have local ASMs further refine their gold to maximum purity at the Wagagai facility were in the offing – a plan Museveni said he would fully support.
Over 27 mineral varieties abound in Uganda including gold, silver, tin, copper, REEs phosphates, limestone, as well as gemstones like rubies. Extensive exploration to quantify the resources remains a challenge, however.
