Artisanal miners make a killing from 'illegal' gold mining as district authorities, government cry out for more revenue
From a distance, "Saigon City" in Lubaali-- Kayonza, Kitumbi Sub-County in Mubende District, resembles a desperately crowded refugee camp.
Here, hundreds of congested makeshift tents and lodging structures are mostly dressed or covered in blue tarpaulins. It could be mistaken for an outpost for people who recently escaped political mayhem. But that is where the refugee comparisons end.
The oddly named 'Saigon City' is one of dozens of artisanal and small-scale gold-mining camps that are scattered in the valleys and hills of this sub-county. It is a settlement for artisanal miners whose population comprises thousands of people - women, men, teenage girls and boys, and a few babies. The adults are all here to eke out a living from gold mining.
Saigon is arguably one of the most hyper-active camps in Mubende. From bars selling cold beers and other soft drinks to retail and wholesale shops, salons, clinics, mobile money agents, chapati stalls, entertainment halls connected to satellite TV, lodges, restaurants, mechanical workshops, and even a Pentecostal church, everyone is here to make a killing from gold.
Lubaali is one of several villages in Mubende where Uganda's gold begins its long journey to Kampala and eventually gets exported to far-away places such as India and Dubai in the United Arab Emirates. This reporter is part of a group of 20 journalists visiting this gold-mining camp to learn firsthand about the activities of artisanal and small scale gold miners in Mubende on this blazing Oct. 13 afternoon. Lubaali, like many other villages in the sub-county, was a laid back rural area. Then gold was discovered a few years ago.
Edward Ssenkusu, the community development officer for Kitumbi Sub-County, says most of the people here were subsistence farmers who used to earn their livelihood from growing maize, beans, cassava and sweet potatoes. But that changed about three years ago when rumours of a gold rush spread like wildfire. He does not say how exactly the discovery was made but, within months, Lubaali was transformed from a quiet and dull village into a miniature bustling township. What is interesting about this gold mining camp is its high level of self-sustenance. Barring the small Police Post within the camp and the private guards inside Saigon City Bar, Restaurant and Lodge, there is little presence of the central government.
Rags to riches
Emmanuel Kibirige never planned to get into artisanal gold mining but the tough conditions forced his hand after he failed to complete his Bachelor of Economics and Statistics degree at Kyambogo University in Kampala due to lack of tuition. Starting out by selling sausages and roasted meat, he then ventured into selling chicken feeds.
Later, he switched to selling produce. This took him to Mubende District. It was on one those trips that he heard about in 2013. He hit Kampala Camp, which is not far from Lubaali.
"I went to the mine with about Shs 40, 000," he says, "Within four days, I had made close to a million shillings." Thanks to inspiring rags-to-riches stories like Kibirige's, district leaders here say the gold mining industry has helped them keep youths busy. Previously, the idle young men used to hang around trading centres playing pool and other board games all day long.
Moses Nkangi, the Kitumbi Sub-County chief, told The Independent on Oct.23 that people in his sub-county at least have work, a development that has reduced crime in his sub-county. Nkangi reckons that there could be about 20,000 people currently working in about ten mining camps in the sub-county. He also sees development in the sub-county. In the past, Nkangi says, Lubaali had many grass-thatched huts but they are slowly giving way to red iron-roofed and brick houses, thanks to income from gold.
Kibuuka Francis Amooti, the LC V Chairman of Mubende, also told The Independent that the gold mining camps in Mubende host close to 60,000 people, who need to feed, drink and get other essential commodities. "Our people have found an opportunity to supply these camps with food and other services," he says. Nyansio Bassa, the "Mayor" of Saigon City says everyone in Saygon City came to make money. "It does not matter whether they are in the mines or the restaurants; they work as hard as possible to live their dream," he says.
Bassa says new comers in the mining camp part with about Shs 30,000 for ground space. But if one intends to set up something for accommodation or a retail shop, that will set you back another Shs 5,000, so you will be required to pay about Shs 35,000 to the 'landlord.' The prospective gold miner will quickly mobilise resources to dig a pit, several feet deep, create a tunnel and start searching for the elusive gold veins. On some days, one will come out with nothing, rendering days of back-breaking labour worthless. But on some good days, the miner may reach a certain point and upon sampling the soil, find that it has traces of gold. When one finds gold, the rocks and soil from the find are quickly brought onto the surface. Here, another hard process of refining the gold begins.
Sarah Mangeni - probably in her mid-20s - is one of the gold dealers. She has been buying gold from the miners since 2014. She says the Indian gold buyers in Kampala prefer Mubende gold because of its high percentage of purity. Mangeni is among 250 representatives of gold buyers in Kitumbi who comb through the makeshift huts buying any piece of gold they can lay their hands on every day.
Going by what one observes at camps like Saigon, the government appears to be nowhere. For starters, even when gold mining is clearly big business, the government insists artisanal mining is an "illegal business" and it remains a clandestine undertaking. It is hard to find credible data on gold mining in the country and as a result the government keeps losing revenue worth billions of shillings.
In a 2013 report, the Directorate of Geological Survey and Mines (DGSM) said Uganda produced 4.3kg and 5.3kg in 2012 and 2013 respectively. But the same report said Uganda exported 164kg of gold in 2013, with 161kg of it imported for re-export, mostly from South Sudan. However, according to Bank of Uganda (BoU), Uganda did not import anything from South Sudan in 2013 and that the country exported 494kg of gold that year, above what DGSM reported. Officials at the DGSM say it is not easy to track and get someone with smuggled gold. Observers of Uganda's minerals sector say illegal mining is the principal factor that explains less tax revenue from high-value minerals like gold. But DGSM officials suggest that artisanal and small scale gold mining activities may have increased as much as 20-40% since 2008. This has recently increased the attention of the government, mainly as a result of the massive losses in royalties and revenues due to informality and smuggling. While linkages with gold smuggled from neighbouring DR Congo have often been cited, a substantial proportion of exported gold seems to be derived from in-country artisanal and small-scale gold mining. Kibuuka, the Mubende LC V chairman, says Mubende District does not get any royalties as it should, largely because the Ministry of Energy and Mineral Development does not have the capacity to assess how much gold has been mined, who has bought what, in what quantities and where or to whom he or she intends to sell it.
Kibuuka told The Independent that if Uganda's gold mining industry were to be regulated, the district would be able to cash much more than what they currently earn in royalties. "It was by luck that gold was found in Mubende but we have not benefitted as a district and the central government," Kibuuka says.
Mubende's budget for the 2016/17 financial year is about Shs 34 billion and most of the funding will come from the central government and development partners. There is very little or nothing from the lucrative gold mining. "All the district gets is revenue they collect as market dues from the retailers who have set up shops in these mining camps," he says. "There is no doubt that the gold business is very lucrative, otherwise, you wouldn't be seeing thousands of people involved in the sector." Yet, the only revenue they are getting is about Shs 2m per month out of the market dues collected every day. Observers of the sector say Mubende is not the only district that has seen a frantic rise in artisanal and small scale gold mining in the country.
Other gold-rich areas include, Karamoja in northeastern Uganda, Buhweju and Ibanda in the West, and Namayingo and Busia in eastern Uganda. Kibirige says it is laughable that Ugandan laws hardly recognise artisanal mining when it is estimated that the number of Ugandans directly involved in artisanal and small scale mining has doubled in the last three years to an estimated 400,000 in 2015 with another 1.5 million people indirectly benefitting from artisanal and small scale mining activities. He says it does not help for the government to keep calling artisan gold miners "illegal." He says the lack of government supervision affects everyone. "When we work illegally, we sell our gold illegally and the government also ends up getting cheated. Working illegally has affected us so much because we end up selling our cheaply," adds Ssenkusu who besides working for the government, also dabbles in artisanal gold mining.
Kibirige insists the government has a simple remedy for all this, by issuing location licences to artisanal and small scale mines, monitor what they produce and get royalties. "It is a business that we are not doing for one day but for years. We are here to stay and the government must understand that." Don Bwesigye Binyina, the executive director of the African Centre for Energy and Mineral Governance (ACEMP), says there is need for the government to shift its attitude towards artisan and small scale miners.