Africa Gold Refinery Limited, a Ugandan mining company backed by Belgian investor Tony Goetz & Sons N.V., announced plans to set up a plant in Entebbe, south of Kampala. The refinery will cost $20 million to build, will have a production capacity of one tonne of pure gold per month, and will process raw gold produced in countries in the region such as Democratic Republic of Congo and Tanzania.
The latter in particular would be an interesting market to enter, given that the country lacks a refinery to process pure gold and exports the mineral to South Africa. Uganda is already a transit hub for exports from its gold-rich neighbours. Thus, the idea behind the refinery is to boost the nation’s earnings from a new set of transactions.
The move comes just three months after in President Yoweri Museveni said he wanted to build a gold refinery to serve the region and get more revenue from purified gold exports. Uganda is ramping up efforts to attract investors to its mining sector, especially after recent surveys found gold, base metals, uranium, rare earths, iron, titanium, vermiculite, and diamond in various locations.
Gold production in Uganda has radically increased in the recent past. Today gold sales contribute about 30% of Uganda’s export revenue. With gold deposits spread across the country, Uganda offers companies a great opportunity to invest in gold mining.
Gold mining in Uganda started in the 1920s with the locals carrying out small-scale gold mining along the river basins. This continued well into 1980s as a result of the political upheavals that followed immediately when the country attained its independence. The stabilization of the country saw many international companies started seeking gold exploration licenses to prospect for gold in the country.