Govt moots mineral wealth fund at Wagagai Gold
CAPTION: President Museveni (R) preside overthe launch of Wagagai Gold Mining Project in Busia Friday 14th 2025. (PPU Photo).
By Stephen Wandera Ouma
BUSIA – President Yoweri Museveni has launched the Wagagai Gold Mining Project in Busia, alongside Chinese investors, and proposed the creation of a mineral wealth fund to channel Uganda’s gold and oil revenues into lasting infrastructure.
The fund, he said, will finance railways, roads, power plants, health facilities, and sports stadiums to benefit Ugandans long after the country’s mineral resources are depleted. The commissioning ceremony was attended by government officials, Chinese investors, and China’s Ambassador to Uganda,Zhang Lizhong.
He condemned the historical “mental bankruptcy” of exporting unrefined minerals, citing Uganda’s losses in value addition—UGX 140 million per kilogram when processed abroad compared to sh360 million earned locally from 99.99% pure gold refined at Wagagai.
The Wagagai Gold Refinery, established in 2019 by China’s Liaoning Hongda Enterprise Group under a 21-year concession, represents a $150 million investment. General Manager Tan Jiuchang said the refinery aligns with China’s Belt and Road Initiative, transforming a once-remote Busia area into a modern, environmentally sustainable gold industry hub.
“Over six years, we’ve employed over 2,000 Ugandans, trained 700 local workers, and invested nearly $1 million in community welfare,” Tan said.
“Our state-of-the-art technology produces 99.99% pure gold bullions, setting a benchmark for Uganda’s mining sector.”
The project has created jobs, built infrastructure, and introduced advanced mining technology despite challenges from the COVID-19 pandemic and global economic downturns.
Tan announced plans for further expansion, including a $50 million investment by 2027 for deeper ore extraction up to 600 meters, and another $50 million by 2035 to reach depths of 1,000 meters. The refinery is projected to produce 1.2 tonnes of gold annually, generating $100 million in foreign exchange and creating up to 5,000 jobs across agriculture, real estate, logistics, healthcare, and tourism.
Energy and Mineral Development Minister Dr. Ruth Nankabirwa hailed the refinery as a cornerstone of Uganda’s Vision 2040.
“Wagagai’s refinery, producing 1–1.5 tonnes of 99.99% pure gold annually, positions Uganda as a regional hub for mineral processing,” she said. “Gold, valued at $107,773 per kilogram, generated $3.8 billion in exports last year, surpassing all other commodities. This facility reduces reliance on foreign refineries, retains wealth, and creates 3,000 direct and indirect jobs, especially for our youth.”
Uganda’s gold deposits are estimated at 25–30 million tonnes of ore in Busia alone, with grades of 1–1.5 grams per tonne. The country also holds significant deposits of graphite (24.5 million tonnes), iron ore (300 million tonnes), and rare earth elements (520 million tonnes).
Nankabirwa stressed gold’s value beyond jewelry, noting its applications in electronics, medicine, aerospace, and as a reserve asset for central banks.
The Bank of Uganda has already piloted a gold purchase program. Ambassador Zhang Lizhong said the project strengthens China-Uganda economic ties. “Wagagai contributes $10 million annually in tax revenue, driving industrial growth and technical capacity,” he said.
“China’s zero-tariff policy for African nations, announced at the 2024 FOCAC Summit, has boosted Uganda’s exports to China by 103.4% in 2025, with coffee and sesame exports surging by 155.1% and 132.5% respectively.”
Uganda-China trade reached $953 million in the first half of 2025, a 32.8% increase from 2024. Zhang cited China’s 400-million-strong middle class and complete manufacturing system as offering “vast opportunities for Uganda,” highlighting Nile Perch maw exports as a recent success.
Busia District LC5 Chairperson and artisanal miner Stephen Wasike Mugeni underscored the project’s impact. “We have been processing gold to only 86% purity, fetching UGX 220 million per kilogram,” he said. “Wagagai’s 99.99% purity unlocks far greater value, benefiting our community and economy.”
Museveni emphasized that Uganda’s mineral wealth should fund long-term development. “A sports stadium or railway built with gold revenue will serve Busia and Uganda for generations,” he said. The Wagagai Gold Project, with its advanced technology and sustainable practices, stands as a model for Uganda’s mineral future—promising economic growth, job creation, and a legacy of infrastructure for generations to come.
