Africa Gold Refinery Limited, a unit of Belgium's Tony Goetz N.V., plans to open a gold refinery in Uganda, providing a major boost to the region's nascent mineral processing facilities.
Construction of the $20m plant, with the capacity to produce 200kg of gold a day, is expected to commence before the end of the year, according to company chairman Richard Kaijuka. The project will give a major lift to one of the key gold producing regions in Africa.
"There is 110 such facility in all of Eastern and Central Africa," says Kaijuka. "We have had to export raw gold to Dubai, Europe and Asia with established refineries."
Located near Uganda's Entebbe airport, the plant seeks to tap into the unexploited potential of the mineral both in the country and from gold producing giants--Tanzania, Democratic Republic of Congo and South Sudan.
"Entebbe is a key transit point for gold exports from the region, rendering the plant a critical addition to the region," Kaijuka says.
In the initial phase, the plant will churn out gold bars, small minted bars and granulates, before embarking on jewellery in the second phase, over the next two to three years.
Among the wide range of incentives that government has put in place to lure investors include tax breaks, the provision of up-to-date geophysical and geological data and scrapping of import duties on mining equipment. The government is also currently reviewing its mineral laws to boost investment in the sector.
The landmark investment comes amid a surprising rebound in gold prices, in contrast with poor prices for other metals including copper and nickel, over concerns about the health of the global economy.
Gold prices have been up nearly 30% since the start of the year, reaching a multi-year high of $1,375.34 an ounce in July, according to Bloomberg Commodity index. This is the biggest annual gain since 2010, as investors flock to traditionally safe investments following global economic headwinds.
Amid the lucrative gold prices, the Ugandan government has sought to use the moment to revamp its underperforming mining industry to boost earnings, according to Irene Muloni, Uganda's energy and minerals minister. "Now is the time to rev up the industry. This is an industry that is capital intensive, but we are trying to make it easier for the investors with good policies," she says.
Uganda has seen a spike in investments in its mineral sector, a few years after a $75111 national mineral survey funded by the World...