Large Scale Mining Licence

The threshold for large scale mining licence is Capital Investment exceeding nineteen million four hundred and ten thousand (19,410,000) currency points (equivalent to 19,410,000 * 20,000 = 388,200,000,000 UGX).

A holder of an exploration licence may apply for a large scale mining licence to the minister. The application must be in the form prescribed by the regulations and must be accompanied by the following requirements.

a copy of the exploration licence or retention licence, which must still be valid;
proof of payment of any taxes and fees due;
in respect of the company- the registered name and place of incorporation of the company; the certificate of incorporation and a certified copy of its memorandum and articles of association; a board resolution; and the names and nationalities of its directors and the name of every shareholder who is the beneficial owner of five percent or more of the issued share capital;
the company profile and history of mining operations in Uganda and elsewhere and the details of any mineral rights held in Uganda, by the applicant or by any person controlling, controlled by or under joint or common control with the applicant;
the period applied for, informed by a feasibility study;
the minerals in respect of which the licence is sought;
a plan of the area over which the licence is sought;
the name and qualifications of the person responsible for supervising the proposed programme of mining operations;

a statement giving details of the mineral deposits in the area of land over which the large scale licence is sought, including details of all known mineral reserves proved, estimated or inferred, and mining conditions in accordance with recognised international mining standards;
a statement giving particulars of expected infrastructure requirements;
an environmental and social impact assessment in accordance with the National Environment Act, 2019;
a feasibility study and assessment by an appropriate expert or accredited consultant on the extent and prospect for recovery and the commercial and economic significance of the mineral deposit;
and a detailed timetable for the work which is to be carried out;

the identification of interested and affected parties including the registered owner, customary owner, lawful occupant or bonafide occupant of the proposed mining area and details of minutes of any consultative meetings with interested and affected parties and the results of the consultation;
a report on the goods and services required for the mining operations which can be obtained within Uganda and the applicant’s proposals with respect to the procurement of those goods and services;

a statement giving particulars of the applicant’s proposals with respect to the employment and training of citizens of Uganda, technology transfer and progressive reduction of expatriate workers in the industry;
details of the applicant’s proposals for insurance including health cover for its employees and workers’ compensation;
proposals for value addition;
the proposed marketing arrangements for the sale of the mineral to be produced;
the financial and technical resources available to the applicant to carry out his or her obligations under the licence;
a plan for co-existence with customary landowners or communities owning the land in the area subject to a mineral right;
a business plan giving a detailed forecast of capital investment, operating costs and revenues;

and the anticipated type and source of financing including the year for the positive cash flow, financial plan and capital structure;
a statement giving particulars of the proposed programme of mining operations, including a statement of the estimated date by which the applicant intends to break-even, the estimated capacity of production and scale of operations; the estimated overall recovery of mineral and mineral products; the nature of the mineral products; proposals for the progressive rehabilitation and decommissioning of land disturbed by mining and for the mitigation of the effects of mining on surface water and ground water and on adjoining or neighbouring lands; and restitution of land rights at the expiry or termination of a mineral right or after mine closure.

The application must be advertised in the gazette, news paper of nation wide circulation or other electronic media and copies of the accompanying map and plan displayed on notice boards in at the subcounty or parish headquarters of the area where the mining is to take place.

The applicant must also submit proof of acquisition of surface rights from the land owner or lawful occupants. The application is forwarded to the Mining Cadastre Department for review and recommendations and upon positive consideration, and within sixty days, a decision must be made. Where there is positive consideration of the application, a large scale mining licence is granted with terms and conditions and the applicant must give notice of acceptance of the licence and its terms and conditions before the licence takes effect. Grant of the licence must be published in the gazette, newspaper of nation wide circulation or other electronic or print media.

The licence must contain the date of grant and duration of the licence which must not exceed twenty one years or the estimated life of the mineral whichever is shorter, a description, map and plan of the area covered by the licence, terms and conditions upon which it is granted among others. The surface area covered by a large scale mining licence must be demarcated by the shape of the mineral body but must not exceed fifty square kilometres.

There are also restrictions on grant of a large scale mining licence, among them, a large scale mining licence cannot be granted over an area of land in, or which is, a mining area, an exploration area or a retention licence area unless the applicant is the holder of an exploration licence, a retention licence, an artisanal mining licence, a small scale mining licence or medium scale mining licence as the case may be, in respect of that area. Additionally, a large scale mining licence cannot be granted to an applicant unless he or she satisfies the Minister that the area of land over which the licence is sought is not in excess of the area reasonably required to carry out the applicant’s programme of proposed mining operations; and the programme of proposed mining operations takes proper account of the certificate of approval of environmental and social impact assessment issued by the National Environment Management Authority and health and safety factors; the feasibility study of the relevant mineral body indicates that the mineral deposit in question can be profitably mined; the applicant has adequate financial resources, technical competence and experience to carry on effective mining operations; the applicant’s proposals for the employment and training

of citizens of Uganda are adequate; the applicant’s proposals with respect to the procurement of goods and services obtainable within Uganda are adequate; the applicant demonstrates a willingness and an ability to comply with the terms and conditions applicable to the large scale mining licence; the applicant has secured the surface rights of the land; and the applicant is not in default.

The licence may contain a condition that the Minister may withdraw or cause to be relinquished portions of the licence area covering land that has been ear marked by Government for a public infrastructure project, at no cost to Government.

Renewal of the licence must be commenced fifteen months before expiration and this licence can only be renewed for a period not exceeding fifteen years.

An application for renewal of a large scale mining licence must contain the following requirements: state the period, not exceeding fifteen years or the life of the mineral ore body whichever is shorter, for which renewal is sought; be accompanied by a statement giving particulars of mining operations proposed to be carried out in the renewed period; demonstrate that the applicant has complied with the environmental performance requirements contained in the certificate of approval of environmental and social impact assessment and the compliance audit required under the National Environment Act, 2019; state any likely effects on the environment and proposed measures to be taken to mitigate such effects in accordance with the National Environment Act, 2019; be accompanied by a statement giving details of the latest proved probable and possible mineral reserves in accordance with international classification and reporting of mineral resources and reserves; the capital investments to be made and the production costs and revenue forecasts in respect of the renewed period; any expected changes in the method of mining, processing, marketing and disposal of mineral products.

The holder of a large scale mining licence has the exclusive right to carry on exploration and mining operations in his or her mining area and may- take all reasonable measures on and under the surface of his or her mining area to mine and process the minerals to which his or her large scale mining licence relates; erect the necessary equipment, plant, machinery and buildings for the purpose of mining, dressing, treating, smelting and refining the minerals or storage of mineral products recovered by him or her during mining operations in accordance with the approved mine development plan; dispose of any mineral products recovered; and dispose of any mineral or waste product in accordance with the National Environment Act, 2019 and mining industry best practice.

The holder of a large scale mining licence has the following obligations he is subject to, among them; to commence production on or before the date specified in the approved programme of development and mining Operations; develop and mine the mineral deposits covered by the large scale mining licence; demarcate and keep demarcated his or her mining area; keep and maintain in Uganda an address which shall be registered with the Mining Cadastre, and to which all communications and notices shall be addressed; compensate for any surface rights for the area subject to a mineral right: pay the surface area fees for the whole area covered by the large scale mining licence in a sequence of three years for the duration of the large scale mining licence; submit and comply with the requirements of a certificate of approval of environmental and social impact assessment issued under the National Environment Act, 2019; obtain a financial guarantee in accordance with the National Environment Act, 2019; engage with the community including entering into community agreements specifying the terms and conditions for use and access to land; carry out rehabilitation work on all or part of the large scale mining licence area, in accordance with the decommissioning plan approved by the National Environment Management Authority; and have a land use agreement with the registered owner, customary owner, lawful occupant or bonafide occupant.

In addition to the above, the holder of a large scale mining licence has reporting obligations and is required to submit to the Minister on monthly basis complete and accurate records of operations relating to his or her licence including- copies of all maps and geological reports, including interpretations, sample analyses, aerial photographs, core minerals, logs and tests and all other data obtained and compiled during mining activities; systematic financial statements and such other books of account , and where the holder is engaged in any activity not connected with his or her operations under the large scale mining licence, he or she shall maintain separate books of account of his or her operations under the large scale mining licence; and permit an authorised officer at any time to inspect the books and records maintained and deliver to the Minister, without charge, copies of any part of such books and records, upon request; and within ninety days after the end of each financial year, furnish the Minister with a copy of his or her audited annual financial report, showing the profit or loss for the financial year and the state of financial affairs of the holder of the large scale mining licence for the year in question.

Where a holder of a mineral right in the course of excercising his mineral rights discovers any other mineral not subject to his licence, he must notify the minister within fourteen days and where he so wishes, apply to have mining rights in respect to such mineral added to his licence accordingly, and must not mine such mineral or permit third parties to access and mine such mineral with out authorisation from the Minister.