Value Addition and Beneficiation of Minerals in Uganda
Mineral beneficiation is the process by which valuable constituents of an ore are concentrated by means of a physical separation process and includes processing, smelting, refining, cutting, blasting or polishing of minerals.
A person shall not process, smelt, refine, cut, blast, polish or trade in minerals or possess commercial quantities of minerals without a licence for that purpose. “Commercial quantities of minerals” means quantities of minerals that are sold or are destined for sale by an individual or entity to a third party for use in processing, smelting, refining, cutting, blasting, polishing or trading.
Thus, quantities of minerals intended for personal or domestic use are excluded from the definition of commercial quantities of minerals.
Therefore, a person intending to take part in mineral beneficiation is required to acquire a licence from the minister for that purpose and may acquire a licence for integrated projects to process, smelt, refine, cut, blast, polish and trade minerals or a licence for a combination of two or more of these projects or may also acquire an independent licence for processing, smelting, refining, cutting, blasting, polishing of minerals or trade in minerals.
Persons who are eligible to apply for a mineral beneficiation licence include an individual who is at least eighteen years of age; and who is a citizen of Uganda and whose principal residence is in Uganda; or an entity registered or incorporated under the Companies Act,2012 or any other written law.
However, a holder of a large scale mining licence, medium scale mining licence, small scale mining licence or an artisanal mining licence is not required to obtain a separate licence for beneficiation. Mineral beneficiation licences include Mineral processing licence, mineral smelting licence and mineral refining licence.
- Mineral processing licence
An application for a mineral processing licence is made to the Minister containing information pertaining to among others the legal status of the applicant including, where a corporate body, the memorandum and articles of association, certificate of incorporation, registered address, and relevant board resolution; the type of mineral to be processed; proof of financial capacity and technical competence of the applicant; proof of availability of appropriate technology; a plan for the processing facility; a certificate of approval of environmental and social impact assessment issued under the National Environment Act, 2019; a statement of the applicant’s knowledge and experience in minerals processing; an environment management plan; a waste management plan in accordance with the National Environment Act, 2019; a compensation, relocation and resettlement plan, where there will be land acquisition for setting up a processing or smelting plant and displacement of persons; a statement of the applicant’s knowledge and experience in mineral processing; proof of surface rights; tax clearance from the Uganda Revenue Authority; and proof of payment of prescribed fee.
The applicant should also be able to prove that he is in possession of or commands sufficient working capital to conduct his or her business satisfactorily.
- Mineral smelting licence
An application for a mineral smelting licence is also made to the Minister containing the legal status of the applicant including, where the applicant is a corporate body, the memorandum and articles of association, certificate of incorporation, registered address, and relevant board resolution; a plan and layout of the mineral smelting facility; proof of appropriate technology; proof of financial capacity and technical competence of the applicant; an environment management plan; a certificate of approval of environmental and social assessment issued under the National Environment Act, 2019; a waste management plan in accordance with the National Environment Act, 2019; a compensation, relocation and resettlement plan, where there shall be land acquisition for setting up a smelting plant and displacement of persons; a statement of the applicant’s knowledge and experience in mineral smelting; proof of compliance with the requirements of the National Environment Act, 2019; proof of surface rights; tax clearance from the Uganda Revenue Authority; and proof of payment of prescribed fees. A mineral smelting licence is issued for a period not exceeding fifteen years and the holder of the licence may apply for renewal for a further period of ten years at a time.
A holder of a mineral smelting licence has the right to carry on mineral smelting operations in the specified area; acquire, dispose or possess the minerals specified in the licence and carry on business as a mineral dealer licence holder; export minerals specified in the licence; and erect the necessary equipment, plant and infrastructure for the purposes of operations and the transporting, dressing or treating of the minerals in his or her possession.
A holder of a mineral smelting licence is required to meet the local content requirements and must thus employ and train citizens of Uganda and implement succession plans for expatriate employees; give priority to the procurement of goods and services available in Uganda; and submit to the Minister for approval a plan for the procurement of goods and services available in Uganda.
- Mineral refining licence
An application for a mineral refining licence is made to the Minister accompanied by proof of the legal status of the applicant including, in the case of a corporate body, the memorandum and articles of association, certificate of incorporation, registered address, and relevant company resolution; a plan and plant layout for the mineral refining facility; proof of appropriate mineral refining technology; proof of financial capacity of the applicant; organisational structure and staffing levels that includes the employment of an expert in mineral refining; an environment management plan in accordance with the National Environment Act, 2019 which shall include a waste management plan; a certificate of approval of environmental and social impact assessment issued under the National Environment Act, 2019; a compensation, relocation and resettlement plan, where there will be land acquisition for setting up a mineral refinery plant and displacement of persons; a statement of the applicant’s technical competence, knowledge and experience in minerals refining; proof of tenancy or ownership of the mineral refining facility; tax clearance from the Uganda Revenue Authority; and proof of payment of prescribed fees.
An applicant for a mineral refining licence must demonstrate technical capacity to operate a mineral refinery facility including having at least five years experience in the operation of a mineral refining plant or an agreement with technology provider to install, test and commission a refining plant and train technicians to operate the mineral refining plant. A mineral refining licence is issued for a period not exceeding fifteen years, renewable for a further period of ten years at a time on application by the holder of the licence.
A holder of a mineral refining licence must not use a mineral refining facility for which a licence has been granted, for refining of any other mineral other than the mineral authorised by the licence, except with the approval of the Minister. Contravention of the above is an offence and on conviction punishable by a fine not exceeding one hundred thousand currency points or imprisonment not exceeding ten years, or both. Additionally, a person who modifies technology with an intention of accruing benefits to him or her or intentionally stockpiles other accessory minerals without notifying the Minister in writing, commits an offence and is liable, on conviction, to a fine not exceeding one hundred thousand currency points or imprisonment not exceeding ten years, or both.
A holder of a mineral refining licence has the right to carry on mineral refining operations in accordance with the conditions of the licence; acquire, dispose of or possess the minerals specified in the licence; and erect the necessary equipment, plant and infrastructure for the purposes of mineral refining operations and the transporting, dressing or treating of the minerals in his or her possession. A holder of a mineral refining licence however has the obligation to employ and train citizens of Uganda and implement succession plans for expatriate employees; and to give priority to the procurement of goods and services available in Uganda among others.
In respect to mineral beneficiation licences generally, a holder of such licence must not transfer, lease, enter into any agreement for amalgamation of licence or create a mortgage on his or her licence or works or any other interest in the licence without written approval of the minister. This applies to direct transfer and any other indirect transfer including assignment of shareholding, and other ownership of shares which may provide decisive control of the person possessing a participating interest in a licence. A holder of any of these licences must carry out operations in a proper and safe manner in accordance with the conditions of the licence and best industry practices, and also ensure that the facility is being used for the purpose for which the licence has been granted and must therefore not engage in processing, smelting or refining any other mineral other than the mineral for which the licence is granted. Non compliance may lead to the minister issuing notice to the licence holder to cease operations and may suspend or cancel the licence. A holder of the above licences may also surrender such licence upon giving three months notice to the minister of their intention to cease operations.
