A Ugandan company backed by a Belgian investor is due to open the East African country’s first gold refinery by the end of this year to process raw gold produced mainly from the region, a senior company official told Reuters.
Uganda’s mineral reserves are generally viewed as under exploited. Although there are gold deposits, it has no big commercial mine involved in production of the precious metal, leaving the field to smaller operators.
The country serves, however, as a transit point for gold exports from the neighbouring Democratic Republic of Congo (DRC), which has large reserves, and Tanzania, one of Africa’s major gold producers.
Richard Kaijuka, chairman of African Gold Refinery Limited (AGRL), said his company had built a processing plant in Entebbe, about 45 kilometres south of the capital Kampala.
Tony Goetz N.V., a Belgian gold refinery, is AGRL’s main investor, Kaijuka said in an interview.
“The focus is regional … we are looking at gold from the entire region, from Tanzania, from DRC and other countries,” Kaijuka said, when asked where the plant would get raw gold.
He said it cost $20 million to put up the plant and the facility would begin with an output capacity of one tonne of pure gold per month, rising over time.
But officials say a drop in commodity prices has dampened investor appetite, with the number of firms seeking exploration licences declining sharply over the last three years.
Kaijuka, who is also a top official in Uganda’s mining industry association, said much of the activity in the sector was in exploration and that that had been hurt most by lower prices.
Kenya has also expressed an interest in establishing a refinery to process minerals from the region but those plans have not gotten off the ground.
Credit: CNBC Africa