Uganda holds significant reserves of minerals like copper, lithium, cobalt, and rare earth elements, which are key to the global energy transition. With the country’s ambition to grow its economy tenfold from USD 50 billion in 2025 to USD 500 billion by 2040, these minerals present a unique opportunity for fiscal revenue generation, technology transfer, and job creation.
The meeting, which took place on Thursday afternoon, delved into the significance of mining lithium locally as a key component in the production of electric car batteries. The proposed lithium mining in Ntungamo district represents a promising opportunity for Uganda to establish itself as a key player in the electric vehicle battery manufacturing sector within the region. Acknowledging the country’s current reliance on imported batteries for electric vehicles, President Museveni emphasized the potential for a robust domestic market for locally manufactured batteries.
The meeting concluded on a positive note, with mutual enthusiasm and commitment towards actualizing this visionary proposal.
Uganda's Mining Sector: A Path to Sustainable Development
Yesterday marked the official launch of the "Sustainable Development of the Mining Sector in Uganda" project, presided over by Hon. Ms. Agnes Kuterama Alaba, Commissioner Mines Department, MEMD; Mr. Humphrey Asiimwe CEO, UCEM, Mr. John Bosco Bukya Chairman, UGAASM; Mr David Otieno, Head of Energy and Climate Programme, GIZ Uganda; Hon. The project aims to enhance the attractiveness of Uganda’s mining sector by improving the overall business environment, fostering social and economic benefits. The project is implemented by GIZ Uganda in collaboration with key Ugandan institutions.
Historically, low- and middle-income countries (except China) have primarily exported raw minerals with minimal local processing. This approach has limited the economic benefits of mining for producer countries. Recognizing this challenge, Uganda has prioritized value addition and local beneficiation, reinforced by the expected boom in transition minerals.
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To support this vision, the government has undertaken key reforms, including the Mining and Minerals Act, 2022, establishing the Uganda National Mining Company (UNMC), and developing new regulations to operationalize the Act. These reforms create a strategic moment to shift the conversation from mere extraction to how Uganda can leverage its mineral wealth for long-term, inclusive economic transformation.
To advance this agenda, the Natural Resource Governance Institute (NRGI), in collaboration with the Advocates Coalition on Development and Environment (ACODE), the Civil Society Coalition on Oil and Gas (CSCO), and the Chamber of Energy and Minerals, with support from the UK international Development from the UK government, is convening a high-level dialogue.
Graphite Mining in Uganda: The Orom-Cross Project
After decades of war and strife in the last decade, Uganda’s northern regions have begun to recover from the trauma caused by Joseph Kony and the Lord's Resistance Army (LRA). Approximately 100 km east of the town of Kitgum lies the village of Orom and it was in this isolated part of the world in 2013 that large quantities of graphite were found.
As a mineral seen as essential to supporting the transition away from fossil fuels to cleaner energy sources, graphite is particularly valuable in the manufacturing of lithium-ion batteries which are used in devices like smartphones and electric vehicles. Studies done thus far estimate the Orom-Cross deposit contains as much as 2-3 billion tonnes of graphite flakes, most of which are near the surface and can be mined relatively easily and cheaply.
Blencowe Resources explains why PFS for Uganda graphite project was 'quite outstanding'
The development of the Orom-Cross project by London-listed company Blencowe Resources Plc is awaiting the final go-ahead from investors. Its CEO Mike Ralston was in Uganda inspecting progress earlier this month and the company, which has just issued a new tranche of shares on London’s Alternative Investment Market stock exchange, boasts that returns will be extremely profitable. If the project proceeds to production, it could generate hundreds of millions of dollars in revenue.
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According to annual reports and corporate presentations, Blencowe estimates that an investment of $130 million over the next few years will yield the company returns of $482 million over the next decade and a half. Blencowe is in the final stages of a detailed Definitive Feasibility Study that it will use as the basis on which to approach investors for further money.
In the interim, the company attracted interest from both superpowers. government, recently provided a $5 million grant towards the studies that will determine whether a final investment decision is made, likely in the New Year. The company also recently tested bulk samples from the mine with Chinese customers, whose government is building the largest renewable energy projects in the world.
China has a virtual monopoly on lithium extraction in Africa. China controls a major part of the minerals needed for the energy transition. It is in this context that Blencowe seems to have sided with the West.
At the State House in Kampala, the project is being watched carefully as President Museveni eyes a potentially large export earner for the country and a handy negotiating card that can be leveraged in negotiations with foreign powers, in particular the competing geo-strategic interests of China and the US. Intriguingly, both countries are involved in the project.
In recent weeks and especially since the re-election of Donald Trump, the superpowers have also ramped up the rhetoric on trade wars. China has threatened to target America’s mineral-critical supply chains, with graphite one of the products high on their list.
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Community Relations and Ethical Considerations
For the citizens of Locomo and the surrounding district of Kitgum, these developments have raised hopes that the associated economic benefits will be a step-change in modernising the region and materially improving the lives of its citizens. Before Finance Uncovered and the two Ugandan journalists started investigating, many of the locals had no idea what kinds of sums had been promised.
Although Blencowe agreed to pay significant sums to the local community to boost skills, education, health and general infrastructure, there have been loud murmurings of discontent. The people of Locomo may not know it, but it could soon be at the sharp end of a global whirlwind.
The reporters then examined Blencowe’s annual accounts for 2023. This was the surface rights agreement with the Locomo Communal Land Association. It had originally been signed in front of the community and then lodged at the Directorate of Geological Survey and Mines at the Ministry of Energy and Mineral Development in Kampala in May 2018 before Blencowe’s arrival on the scene.
The agreement granted CARU a 49-year lease over the prospecting area in return for compensation. Payments became due at the point where the company would require access to different sections of the prospecting area, so the timing of the payments was entirely at the discretion of the company. The association in turn was responsible for making disbursements to individual community members and administering a student scholarship scheme the company agreed to fund.
While a land valuer was used in the process of drafting the agreement, when asked by reporters no-one could explain how the actual rates were determined. This investigation was therefore unable to assess whether the agreed rates were fair. After Blencowe's acquisition of CARU, the company and the land association agreed to revise the agreement in September 2022. The amounts to be paid were not altered but the second version shortened the period between payment instalments.
The revised agreement requires provision of local education and sensitization of the local communities in Akurumo parish on the opportunities and advantages of mining graphite, including provision of employment priorities to the local capable members of Akurumo parish.
In response to our questions, Blencowe CEO Mike Ralston said considering the size of the mineral area and the fact that the payment structure was based on access, the next payments would not have been due for a long while and this was something both parties considered “unreasonable”. Blencowe was therefore happy to respond to the association’s request.
According to a letter addressed to the land association by lawyers representing Blencowe in 2022, the community will be paid approximately ÂŁ142,000 (at current exchange rates) at each of the eight instalments left on the agreement, or approximately ÂŁ1.13 million in total between now and 2035. Blencowe said two payments had already been made to the community: one before it acquired CARU and the second when the revised agreement was signed in 2022.
Some residents said they had not received money due to them and that there had been delays. As well as the processing delays, the reporters were told there had been allegations of mismanagement against the land owners association. A source familiar with the issues said that the association spent 240 million Ugandan shillings (ÂŁ51,303) acquiring two tractors for communal use and which were to be rented out on commercial terms.
It was agreed that any money generated from doing so would be banked on a monthly basis. However, in 2020, only UGX 1.6 million (£342) was banked and nothing the following year. It appears that the association’s chair had had UGX 2.3 million (£491) in his custody for the whole year.
In response to questions over mismanagement of funds at the land owners association, Blencowe stated it would work with any relevant authorities to ensure compensation continues should it be made aware of any improprieties or legal proceedings against the association or any of its members.
The difficulties with the association are not the only problems plaguing community relations in the area. Oryem, in a document read out at a district council meeting, noted that no information or formal documents had been made publicly available to the district council, despite ongoing activities within the explored area. He listed a host of other gripes including that the agreement reached with the land owners association favoured only one parish.
Arwai Christopher Obol, the chair of the council, told us his request to access the surface rights agreement had been unsuccessful. He said: “We are now investigating because why is the community not satisfied? It's a question that we need to look into critically, yes.
When journalists examined the council’s move, it was not clear on what authority the district could suspend or call for the suspension of operations of a mining company because under Uganda’s Mining and Minerals Act of 2022, the Department of Geological Survey and Mines takes the lead in regulating mining companies.
Blencowe has also not yet formally started mining operations: it is still in the exploration phase, and as such had only paid $100 to the central government for royalties on the bulk samples it had taken from the area. The company said that it was certainly not aware of any royalties that should have been paid to the district council, and certainly not prior to mining operations commencing.
Blencowe described the incident as an “interference” created by certain local parties for their own agenda. The reaction of the government also underscores the strategic importance of the project to the country.
President Museveni imposed a ban on raw exports of minerals in 2015.
In its 2023 strategic report, the company reports: “[The company] has agreed to help provide local education and sensitization of the local communities in Akurumo parish on the opportunities and advantages of mining graphite. CARU will give employment priorities to the local capable members of Akurumo parish.
“Since the acquisition of CARU the Group has donated to local causes, such as a scholarship programme and to fight against COVID-19. There is no suggestion of any wrongdoing by Blencowe and it insists it has a good public relations operation in effect in the Locomo area.
"When you are going to develop a mining project in a community, you must have a social license to operate. The community must understand what you are doing.
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