Introduction
The mining sector in Uganda is regulated primarily under the Mining and Minerals Act, 2022, which repealed the former Mining Act of 2003 and introduced a modern legal framework aimed at promoting transparency, environmental protection, value addition, and sustainable exploitation of mineral resources. The law is administered by the Directorate of Geological Surveys and Mines under the supervision of the Ministry of Energy and Mineral Development.
Under Article 244 of the Constitution of Uganda and the Mining and Minerals Act, all minerals in Uganda are vested in the Government on behalf of the people of Uganda. Consequently, no person may lawfully conduct prospecting, exploration, mining, or mineral processing activities without obtaining the appropriate mineral right or licence.
Types of Licences in the Ugandan Mining Sector.
The Mining and Minerals Act, 2022 provides for several categories of mineral rights and licences. These include:
1. Prospecting Licence
A prospecting licence authorizes a person to carry out preliminary searches for minerals over a specified area. This licence permits activities such as geological mapping, surface sampling, geochemical investigations, and other non-invasive exploratory works intended to identify mineral occurrences.
The holder of a Prospecting Licence does not obtain ownership of minerals but merely gains the right to investigate the mineral potential of an area.
There is no fixed or restricted area size (such as a specific limit on square kilometers) for prospecting license in Uganda.
The licence holder, their employees and agents have a non-exclusive right to look for minerals. This means other people can also hold prospecting licences over the exact same piece of land at the same time. Section 39(1) of the Act.
A Prospecting Licence is granted for a period of one (1) year, is non-exclusive & not renewable.
According to Section 39(3), A prospecting Licence does not allow the holder to operate in the following areas or engage in the following activities:
- Existing Licence Zones: You cannot prospect on land that is already covered by an active exploration, mining, retention, artisanal, or small-scale mining licence.
- No Heavy Works: You are strictly forbidden from engaging in drilling or excavation operations.
- Protected and Urban Areas: You cannot prospect in national parks, game reserves, forests, wetlands, urban centres, or special conservation/protected areas unless you first notify and get official permission from the relevant governing authorities and follow their conditions.
2. Exploration Licence
An exploration licence is granted where a person intends to conduct detailed exploration activities to determine the existence, quality, quantity, and economic viability of mineral deposits. Exploration activities may include drilling, trenching, bulk sampling, and geophysical surveys.
This licence is usually issued after preliminary prospecting results indicate the possible existence of commercially viable minerals.
An Exploration Licence is granted for a period of at most four (4) years, is renewable once for three (3) years and half the area relinquished on renewal.
A single exploration licence can cover a maximum land area of 250 square kilometres. And an individual or company is permitted to hold more than one exploration licence. If a person holds multiple licences, the different areas cannot be combined or merged to fulfill, dilute, or satisfy your legal obligations. Each licence area must be treated and reported on completely independently.
As the licence progresses, the holder is required to reduce the size of the exploration area. At the end of the licence’s initial term, the holder must give up (relinquish) at least half (50%) of the original area size.
While the general rule requires a licensee to surrender at least half of their land at the end of the initial term and at each renewal period, an exception applies if:
The licence holder conducts a comprehensive exploration program and proves with hard evidence that the mineral deposit (mineral target extension) spans more than 50% of the existing licence area and if proven, the Minister has the power to waive the mandatory reduction and renew up to 100% of the entire exploration area.
And lastly any part of the exploration area that successfully transitions into a Retention Licence or a full Mining Licence is automatically carved out and excluded from the remaining exploration area acreage.
3. Retention Licence
A retention licence is issued where a mineral deposit has been discovered but cannot immediately be developed commercially due to economic, technical, or market-related reasons. The licence allows the holder to retain exclusive rights over the mineral area until mining becomes commercially feasible.
A retention licence does not have a predetermined, fixed maximum area size specified under the law, but its size is strictly governed by the physical dimensions of the discovered mineral deposit.
An Retention Licence is granted for a period of at most three (3) years, and is renewable once for two (2) years.
4. Large-Scale Mining Licence
A large-scale mining licence authorizes large commercial mining operations involving substantial investment, extensive mineral production, and sophisticated mining infrastructure. Such operations are usually undertaken by large corporations with significant technical and financial capacity.
The Government of Uganda may acquire up to a 15% non-contributory interest in enterprises operating under large-scale mining licences through the Uganda National Mining Company.
An Large-Scale Mining Licence is granted for a period of at most twenty-one (21) years, and is renewable for fifteen (15) years at a time.
The licence is granted for large mining operations in an area not more than 50 square kilometres requiring a capital investment threshold exceeding nineteen million, four hundred and ten thousand (19,410,000) currency points.
5. Medium-Scale Mining Licence
This licence is granted for mining operations that are larger than small-scale mining but not extensive enough to qualify as large-scale operations. The licence holder must demonstrate technical competence, environmental compliance, and financial capability.
An Medium-Scale Mining Licence is granted for a period of at most ten (10) years, and is renewable for seven (7) years at a time.
This licence issued for mining operations in an area not more than 50 square kilometers requiring a capital investment threshold from fifty-eight thousand, two hundred and thirty (58,230) currency points to nineteen million, four hundred and ten thousand (19,410,000) currency points.
6. Small-Scale Mining Licence
A small-scale mining licence is intended for smaller commercial mining ventures involving relatively lower capital investment and simplified mining methods. It is commonly used by local investors and community mining enterprises.
An Small-Scale Mining Licence is granted for a period of at most five (5) years, is renewable for three (3) years at a time, and is exclusively for Ugandans.
This is granted for mining operations in an area not more than 10 square kilometers requiring a capital investment threshold exceeding nineteen thousand, four hundred and ten (19,410) currency points to nine hundred seventy thousand and five hundred (970,500) currency points.
7. Artisanal Mining Licence
This licence is designed for individuals or groups undertaking low-technology and labour-intensive mining operations. The licence formalizes artisanal mining and enables small miners to operate legally while complying with environmental and safety standards.
An Artisanal Mining Licence is granted for a period of at most three (3) years, is renewable for two (2) years at a time, and is exclusively for Ugandans.
The maximum surface area allowed is not fixed. This means that it will be explicitly set by the regulations. This is issued for mining operations not exceeding nineteen thousand four hundred ten (19,410) currency points (1 currency point =UGX 20,000).
Procedure for Acquisition of Mining Licences in Uganda
The acquisition of mineral rights in Uganda follows a structured legal and administrative process mainly conducted through the Mining Cadastre and Registry System under the Directorate of Geological Surveys and Mines. Uganda utilizes an online, centralized Mining Cadastre Portal to manage the intake, processing, and mapping of licences on a “first-come first-serve basis ensuring that overlapping claims are computationally prevented per the Mining and Minerals Act, 2022 and the Mining and Minerals (Licensing) Regulations, 2023
Step 1: Incorporation of a Company
Foreign and local investors intending to engage in mining activities commonly begin by registering a company in Uganda through the Uganda Registration Services Bureau. The company must have objects permitting mining or mineral-related activities. Once incorporated, the applicant creates an account profile on the Directorate of Geological Surveys and Mines (DGSM) Mining Cadastre Portal, providing beneficial ownership details and corporate credentials.
Step 2: Identification of Mineral Area
The applicant identifies the geographical area where mining activities are intended to take place. A search is conducted through the Mining Cadastre System to confirm whether the area is available and not already licensed to another entity, pending applications, or restricted environmental zones like national parks.
Step 3: Preparation of Application Documents
The applicant prepares the prescribed application forms together with supporting documents, which may include:
- Certificate of incorporation;
- Memorandum and Articles of Association;
- Tax Identification Number;
- Technical proposal and work programme;
- Proof of financial capability;
- Environmental and social management plans;
- Details of directors and shareholders;
- Evidence of payment of prescribed application fees.
Step 4: Submission of Application
The applicant completes the specific statutory forms online and attaches a robust application dossier. Applications are submitted to the Directorate of Geological Surveys and Mines through the Mining Cadastre and Registry System. The Commissioner may request additional information where necessary. The key elements required include:
- Technical Competence: a detailed work programme compiled by qualified geologists or mining engineers outlining the intended exploration or mining methodology.
- Financial Capability: Bank statements, lines of credit, or audit books proving the applicant can fulfill the minimum expenditure commitments of the license.
- Local Content and Employment Plans: under the Mining and Minerals Act 2022, applicants must submit explicit proposals outlining how they plan to employ Ugandan citizens, train local staff, and procure local goods and services.
Step 5: Securing of Lease
This applies to Large-scale, Medium-scale, Small-scale, and Artisanal mining licences. To successfully acquire a mining license, the land-leasing process must be executed alongside the technical applications on the digital Mining Cadastre and Registry System (MCRS). The following must be satisfied;
- Cadastral Mapping and Landowner Identification
- Compulsory Community Consultations
- Negotiating and Executing the Surface Lease Agreement
- Digital Upload and Vetting. The fully signed and witnessed Lease Agreement, along with the signed consultation minutes, must be uploaded directly onto the online MCRS Portal as part of your primary license application. The Ministry’s legal team reviews the lease to ensure the compensation terms are fair and that all rightful occupants have signed. And once the Ministry verifies the lease and confirms it matches your environmental approval from National Environmental Management Authority, the application moves from “Pending” to “Approved.”
Step 6: Technical and Legal Evaluation
The application undergoes technical, financial, legal, and environmental assessment to determine whether the applicant possesses adequate expertise, resources, and compliance mechanisms. Government agencies may consult environmental authorities and local governments before approval.
Step 7: Grant of Licence
Where the application satisfies all legal and technical requirements, the Minister responsible for minerals grants the licence subject to conditions stipulated under the Act and Regulations grants the licence. The licence must specify:
- Duration of the licence;
- Mineral covered;
- Size and location of the area;
- Rights and obligations of the holder;
- Environmental and reporting obligations.
Step 8: Payment of Annual Fees and Compliance
Licence holders are required to pay annual licence fees, royalties, surface rent, and other statutory payments. They must also comply with:
- Environmental standards;
- Occupational safety requirements;
- Reporting obligations;
- Community development obligations;
- Tax obligations under Ugandan law.
- Failure to comply may result in suspension or cancellation of the licence.
Conclusion
Uganda’s mining sector is governed by a comprehensive legal framework intended to ensure sustainable mineral exploitation, investor accountability, environmental protection, and national participation in mineral development. The Mining and Minerals Act, 2022 establishes different categories of mineral rights tailored to various scales and stages of mining activity, ranging from artisanal mining to large-scale commercial extraction. While leasing the land from a citizen, one cannot lease or sub-lease a mining license to another mining company without the explicit, written approval of the Minister.
