The Mining Act 2003 repealed and replaced the Mining Act 1964, Cap. 248, with a new legislation on mining and mineral development, which conforms, and otherwise gives effect, to the relevant provisions of the Constitution; to vest the ownership and control of all minerals in Uganda in the Government. The Act also provides for the acquisition of mineral rights; and other related matters. Subject to the provisions of this Act, a person may acquire the right to search for, retain, mine and dispose of any mineral in Uganda by acquiring such right under and in accordance with the provisions of this Act.
Types of Licenses and Mineral Rights
In order to operationalize the Mineral Policy, a new legislation, Mining Act, 2003 was enacted and appropriate regulations (The Mining Regulations 2004) were gazetted thereby replacing the Act of 1964 which was out-dated in many respects. The provisions in the new Act conform to the contemporary industry conditions and practices. They include:
• Prospecting Licence – the licence is granted to the holder to prospect for minerals around the country and the licence is non-exclusive. It is granted for one year and is not renewable.
• Exploration Licence – the licence area is to a maximum of 500 sq. km and duration of 3 years, renewable for two terms of 2 years each. On each renewal, half the area is relinquished.
• Retention Licence – the licence is a new feature in the law. It is granted to the holder of an exploration licence in cases when the identified mineral deposit cannot be exploited due to economic reasons. Its duration is 3 years, renewable once for 2 years.
• Mining Lease – the licence is for mining operations and is granted for 21 years and is renewable for 15 years.
• Location Licence – the licence is for mining operations of a smaller investment where expenditure to achieve production will not exceed 500 currency points (a currency point is worth 20,000 Uganda shillings). It is granted to citizens of Uganda or in case of corporate, only where citizens of Uganda hold at least 51% of ownership. Its duration is 2 years, renewable for other terms of 2 years each.
Aspects/conditions to observe while acquiring licences/mineral rights
• Royalties – All minerals obtained from any mineral right are subjected to royalty payment for example: precious stones – 5% of the gross value, precious metals – 3% of the gross value, base metals and ores – 3% of the gross value, and industrial minerals vary from 500 to 3000 Uganda shillings per tonne.
• Adequate Compensation – the law provides for fair compensation upon disturbance of surface rights of landowner or lawful occupier.
• Mineral Agreements – the law provides that the investor and government sign agreements relating to operations in order to stabilize legal, social and economic obligations of either party.
• Environment – the law has provisions on environment protection peculiar to mining operations.