Different Types of Mineral Rights That May Be Acquired in Uganda

A mineral right means a right to prospect, explore or mine for minerals under a prospecting licence, an exploration licence, a retention licence, a large scale mining licence, a medium scale mining licence, small scale mining licence or an artisanal mining licence.

The Mining and Minerals Act 2022 recognises the following types of mineral rights; prospecting licence; exploration licence; retention licence; large scale mining licence; medium scale mining licence; small scale mining licence; and artisanal mining licence.

Administration, Management And Development

• The Directorate of Geological Surveys and Mines

The mineral sub sector is placed under the administration and management of the Directorate of Geological Surveys and Mines, under overall guidance of the Minister responsible for Mineral Development who has powers to grant mineral rights, licences, permits and authorisations under the Act. The minister has powers to withdraw or cause a mineral rights holder to relinquish portions of licence areas covering land that has been earmarked for infrastructural development.

The Directorate of Geological Surveys and mines has several departments responsible for management of minerals and mining activities, these include; Department of Geological Surveys, Department of Mines, Department of Geothermal Resources and Mining Cadastre Department.

The Department of Geological Surveys’ function is to establish and promote the mineral potential of Uganda through reconnaissance, exploration, geological mapping, geochemical surveys, geophysical surveys and any other method; collect, manage and provide access to geological data and information from mineral exploration and development operations; promote mineral beneficiation and value addition; establish and maintain an accredited mineral laboratory for analysing mineral samples, rocks, mineral concentrates, tailings or minerals among others.

The Department of Mines’ function is to be responsible for the regulation of mineral rights; to inspect, monitor and audit mining operations;  to implement the certification of designated minerals; assess and verify mineral royalty and other payments; mainstream and organise artisanal mining in Uganda;  facilitate the development of skills and capacity among Ugandans and promote technological development in the mineral subsector; encourage private sector participation in the exploration and exploitation of mineral resources; recommend to the Minister the suspension or revocation of mineral rights as a result of inspections and monitoring; develop and observe internationally accepted standards of health, safety, environmental protection and the protection of human rights in the mineral subsector, in consultation with the Uganda National Bureau of Standards and other relevant Government agencies among others.

The Department of Geothermal Resources is established to conduct surface and subsurface exploration of geothermal prospects; undertake pre-feasibility and feasibility studies in order to provide an economic basis for licensing of geothermal resources;  participate in the preparation of agreements including implementation agreements, and direct use contracts to support licences and enable private sector participation in the development of energy from geothermal resources; regulate and monitor the performance and technical compliance of licences for geothermal operations; recommend to the Minister the suspension or revocation of licences for geothermal operations as a result of non compliance. Geothermal resource means a reservoir of heat occurring naturally within the subsurface of the earth carried to the earth’s surface by water or steam.

There is also a Mining Cadastre Department whose function is to administer mineral rights and maintain cadastral maps and registers. This department receives, evaluates and processes applications for mineral rights, licences and permits including applications for renewal, extension, reduction, transfer and abandonment; and makes recommendations to the Minister on the applications.

• The Uganda Mining Company

The Act establishes the National Mining Company which is to be incorporated, under the Companies Act 2012, a Uganda National Mining Company which shall be wholly owned by the State to manage Uganda’s commercial holding and participating interests of the State in mineral agreements. The functions of the Uganda National Mining Company are to manage the State’s strategic commercial interests in the mineral subsector; optimise value of its shareholders, to participate in accordance with the terms of mineral agreements, in joint ventures in which it holds an interest on behalf of the State; to participate in meetings of the operating committees in furtherance of its participation in the respective joint operating agreements; to study and propose new mining ventures locally and internationally; and to undertake the exploration and mining operations in the best interest of the State where private entities are unwilling to do so.

• Role of Local Governments

The role of the local government is to integrate publicly available mineral deposit information provided by the Directorate into their development plan  and participate in the implementation of mining policies,  laws and mineral related activities in collaboration with  the Directorate; create awareness of mining activities within their areas of jurisdiction; facilitate dialogue between the local communities or project affected persons and mineral rights holders; participate in the resolution of disputes arising from mineral related operations; and receive reports and plans of the companies operating in their jurisdiction every six months.  Local authorities also have authority to serve as facilitators, as far as is required, for negotiation and implementation of community development agreements under the Act.

• Use of Mineral Agreements 

The Act introduces a modified concept of Mineral Agreements in the repealed law. A mineral agreement is one entered into between the Minister and any person with respect to any matter relating to or connected with operations or activities under an exploration licence or large scale mining licence in respect of highly capitalised and complex projects (projects with significant intergrated components, unique equipment, multifaceted systems, intricate phasing, or that is marginal in context).

A mineral agreement shall include terms and conditions relating to: minimum exploration or mining operations to be carried out and the work plan determined for purposes of such operations; the minimum expenditure in respect of exploration or mining operations; financial obligations; production sharing arrangements where minerals have been ascertained and quantified;  the manner in which exploration or mining operations shall be carried out; the processing of any mineral or group of minerals found, obtained or mined by the holder of a mineral right in the course of exploration or mining operations; the basis on which the market value of any mineral or group of minerals in question may from time to time be determined; project financing and insurance arrangements; environmental management obligations; health and safety obligations; requirements for local content, including the use of local labour and goods; community benefit sharing and community development, including the obligation to conclude community development agreements with the affected communities; the establishment of culturally relevant local dispute resolution mechanisms; resolution of disputes through arbitration mechanisms; the right of the Minister to withdraw or cause to be relinquished portions of the licence area covering land that has been earmarked by Movement for a public infrastructure project, at no cost to Government and  the protection of the land rights or any customary rights of any of the registered owner, customary owner, lawful occupant or bonafide occupant of the land in the area subject to a mineral right.

The Minister is mandated to develop or cause to be developed a model mining agreement or other model agreements as may be entered into by Government which shall be submitted to Cabinet for approval. The Act states that the model agreement shall guide the negotiations of any future mining agreements. The Minister is mandated to lay before Parliament, a mineral agreement signed and adopted by Government within sixty days from the date of signing of the agreement.