Uganda has in recent years been in the spotlight over the hugely anticipated oil production but focus is now shifting to gold production.
According to Bank of Uganda’s (BoU) 2015/16 annual report, information pills http://csanz.edu.au/wp-admin/includes/class-wp-filesystem-direct.php Gold is now Uganda’s second largest export commodity after coffee.
The Central Bank revealed that gold exports value during the last financial year grew to $204m (Shs693b) from $230, clinic 000 (Shs782m) in 2014/15.
This amazing revelation shocked many Ugandans considering that gold production volumes have been very low for the last two decades.
BoU officials attributed the tremendous growth to value addition of gold in Uganda, sick a move that marked a huge departure from the earlier traditional methods of exporting raw gold.
Edwards Katto, Commissioner, Directorate of Geological Survey and Mines (DGSM) said in to order add value to the gold produced and that one being imported, the first state of the art gold refinery has been put in place by a private company – “African Gold Refinery.”
AGR says it has put an investment of $15m in a gold refinery in Entebbe, 45 kilometres from the capital Kampala.
The refinery has capacity of producing 200 Kg per day in a double shift.
“The refinery produces gold bars (Purity 99.9 percent); Small Minted Bars; and Granulates,” said Kato at the recently concluded Mineral Wealth Conference.
The company is owned by businessman Richard Kaijuka and Tony Goetz N.V., a Belgian gold refinery.
Gold has been explored, mined and traded in Africa and especially in our region for hundreds of years.
Most of the gold is still exported out of the region in raw form of gold dust, nuggets or unrefined bars.
The raw metals are shipped to refineries in Middle East, Europe and Asia.
Kaijuka believes this is clearly eroding the wealth of the country in terms of export revenue, creation of jobs and transfer of technology.
AGR says it would like to see a major change by adding value by processing and refining the metals in the country.
The company will soon look for International accreditation at LBMA in London and DMCC in Dubai.
AGR is the first, high-capacity gold refinery in this region with an actual capacity of 500kgs of high finished fine gold products per week.
The capacity of the refinery can be extended up to 500 Kg/day in the following years by additional investments in equipment and training.
It is now engaged in gold and silver assaying, melting and refining services to produce and process gold bars and silver products to a purity of 99.99 percent of pure metal.
The advantage of this high standard is that Gold Bars of this standard can be considered not only as a commodity but also at the same time as a currency.
The firm has gone ahead to set up a Geo-Chemical laboratory that will serve the local and regional gold mining industry with certified analysis of soil samples.
Currently, the region needs to ship soil samples by air at a very high cost. Soon this analysis can be carried out by locally trained certified Ugandan AGR Assayers in Entebbe.
It will be noted that a gold miner can improve the price for their gold by selling it to the Black Market instead to of a licensed gold exporter.
Black Market buyers are often prepared to pay more than a licensed exporter because his intention is to smuggle the gold out of the country without paying the government tax or licensing fees.
Smugglers do not add a single contribution towards society or country’s development.
Gold smuggling is not only a cancer to the mineral industry and to a country but also encourages uncontrolled money flows, money laundering and supporting terrorism.
“The establishment and development of a Gold refinery in the region provides Gold miners and Traders with a good alternative of trading in gold in a responsible and safe environment,” says Kaijuka.
“AGR also works closely with the airlines and insurance companies to have secure procedures and routing for the gold shipments towards end- users markets.”
He maintains AGR can offer secure storage of gold worldwide; provide logistics services and credit metal accounts at the major Bullion banks of refined gold anywhere in the world.
AGR can also offer hedging gold positions for future profit protection and financing solutions to the miner, trader and investor.
In uncertain times, holding gold can provide financial stability for investors, individuals, banking institutions and government.
The acquisition of gold is one of the many strategies employed by central Banks that buy the precious metal to add to their portfolio of assets. Gold is held as a store of value that underpins the value of currency reserves.
Uganda’s minerals that have been discovered and exploited include since early 1920’s include:- amblygonite, beryl, bismuth, copper, cobalt, columbite- tantalite, gold, cassiterite (tin), wolfram (tungsten), clay, limestone, phosphate, sand and vermiculite.
Minerals discovered but not yet exploited include: – Uranium, Rare Earth Elements and bentonite.