Kampala, Uganda — 26 March 2013 – Poor financial support for the monitoring and supervision the mining industry in Uganda is costing the country billions of dollars in under-declared royalties and taxes, according to a senior mines inspector.

Uganda’s “New Vision Website”, quoted by allAfrica.com, says the inspector of mines in charge of western Uganda, Gideon Amunyo says his office is meant to oversee the entire western region, but it does not have the capacity to do so and revenue is being lost.

“A mere sh100,000 in fuel for an entire month is a drop in the ocean when you consider the movement required in adequately supervising the mining activities in the area. As a result, mining investors constantly under-declare their finds, which costs the state a great deal in royalties and taxes,” Amunyo said in a statement following a late February field excursion organised by the Uganda Chamber of Mines and Petroleum (UCMP).

The other impediment to a profitable extractive industry, according to Amunyo, is the low level of staffing and a failure to adapt international legal provisions that would safeguard the industry and further strengthen regional security needed for a stable industry.

Uganda is yet to adopt the Dodd Frank Law, US legislation that aims to limit the trading of conflict minerals that have for long funded wars such as that in the neighbouring Democratic Republic of Congo (DRC).

Since Uganda neighbours the DRC, it is important that it adopts the initiative, says Amunyo, otherwise its minerals such as tin and wolfram (tungsten) will become unattractive.

“The delay to embrace the law has seen increased smuggling of minerals from Uganda to neighbouring Rwanda where the law is already in existence and therefore a guaranteed market. This means Uganda loses out on would be returns were the minerals to be sold legally,” he adds.

The department of geological survey and mines is also poorly staffed and facilitated.

The excursion discovered that the Kirwa Wolfram mine, located in Kisoro, is bogged down because of ownership wrangles, leaving the biggest and oldest mine to operate below full potential.

Following the airborne geophysical survey covering 80% of the country, Uganda is embarking on a serious exploration phase concentrating on areas that have obvious anomalies.

UCMP geotechnical officer Catherine Wabomba says the inaugural fact-finding trip has been an eye opener that puts in perspective the level of investment and commitment that is still required to push the Ugandan mining industry forward.

UCMP intends to gather as much first-hand information as possible about the country’s mining operations which can be used reliably to attract investment into the sector

Source: allAfrica.com. For more information, click here.