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Economic Contributions of Artisanal and Small-Scale Mining in Uganda: Gold and Clay

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Economic Contributions of Artisanal and Small-Scale Mining in Uganda: Gold and Clay Economic Contributions of Artisanal and Small-Scale Mining in Uganda: Gold and Clay January 2018 This document is an output from a project funded by the UK Department for International Development (DFID) through the Research for Evidence Division (RED) for the benefit of developing countries. However, the views expressed and information contained in it is not necessarily those of, or endorsed by DFID, which can accept no responsibility for such views or information or for any reliance placed on them. Contacts: Pact Global UK Ravenswood, Baileys Lane Westcombe, Somerset BA4 6EN UK +44 (0) 7584651984 [email protected] [email protected] Alliance for Responsible Mining Calle 32 B SUR # 44 A 61 Envigado – Colombia +57 (4) 332 47 11 [email protected] [email protected] Authorship: This report was prepared by Dr Maria Laura Barreto (team leader, legal aspects), Patrick Schein (economic aspects), Dr Jennifer Hinton (technical and social aspects), and Dr Felix Hruschka (context, mapping and compilation) as part of the EARF project ‘Understanding the Economic Contribution of Small-scale Mining in East Africa’ covering Kenya, Rwanda, and Uganda. The authors wish to acknowledge the important research assistance of Elizabeth Echavarria and Marina Ruete from ARM. Special thanks are extended to the project’s Expert Advisors Majala Mlagui (Kenya), Stephen Turyahikayo (Uganda), and Augustin Bida (Rwanda); Pact staff Jacqueline Ndirangu and Ildephonse Niyonsaba; Project Co-Managers Cristina Villegas of Pact and Géraud Brunel of ARM; the DFID EARF leadership who funded this study; and the in-country DFID representatives of Uganda, Kenya, and Rwanda, with whom the researchers met while conducting in-country assessments. About Pact and ARM: International not-for-profit organisations Pact and ARM are jointly responsible for this report’s contents. Both organisations are independent yet partner on a project by project basis to promote and achieve excellence in natural resource management, improve social and environmental responsibility within artisanal and small-scale mining, and assist communities to gain lasting benefit from the more sustainable use of the natural resources around them. Contents Abbreviations and Acronyms .................................................................................................................i Executive Summary................................................................................................................................ii Context ii Purpose of this Study .................................................................................................................. ii Methodology ................................................................................................................................ ii Key Findings ................................................................................................................................ ii Recommendations ...................................................................................................................... iii Formalisation Activities Should Be Furthered ............................................................... iii Targeted Trainings for Diversity of ASM Stakeholders Needed .................................... iv All Formalisation Efforts Should Be Closely Monitored ................................................. iv 1. Introduction ........................................................................................................................................1 1.1. Purpose of this Study ............................................................................................................1 1.2. Methodology ..........................................................................................................................2 1.2.1 Limitations .............................................................................................................2 2. The ASM Context in Uganda ............................................................................................................3 2.1. Country Overview ..................................................................................................................3 2.1.1. Political Context ..................................................................................................3 2.1.2. The Economy .....................................................................................................3 2.1.3. Human Development ..........................................................................................4 2.2. The Minerals Sector ..............................................................................................................5 2.2.1. Sector Overview .................................................................................................5 2.2.2. Mining Sector Stakeholders ...............................................................................6 2.2.3. Legal Framework for ASM..................................................................................7 2.2.4. Characteristics of Location Licence ................................................................ 12 2.2.5. Requirements of the Location Licence ............................................................ 14 3. Case Studies ................................................................................................................................... 15 3.1. Case Study: Gold in the Karamoja Region ........................................................................ 16 3.1.1. Supply Chain Actors, Activities, and Employment .......................................... 16 3.1.2. Distribution of Economic Costs and Benefits across the Supply Chain .......... 18 3.2. Case Study: Clay and Brickworks in Greater Kampala ..................................................... 20 3.2.1. Supply Chain Actors, Activities, and Employment .......................................... 20 3.2.2. Distribution of Economic Costs and Benefits across the Supply Chain .......... 22 4. Micro- and Macro-Economic Contributions ................................................................................. 23 4.1. National Economic Development ....................................................................................... 23 4.1.1. Foreign Exchange Earnings ............................................................................ 23 4.1.2. GDP Contribution ............................................................................................ 24 4.2. Local Economic Development ........................................................................................... 24 4.2.1. Employment .................................................................................................... 24 4.2.2. Indirect Employment and Economic Multiplier Effects .................................... 25 5. Conclusions and Recommendations ........................................................................................... 26 5.1. Conclusions ........................................................................................................................ 26 5.1.1. Economic and Social Contribution .................................................................. 26 5.1.2. Formalisation Opportunities and Legal Challenges ........................................ 27 5.2. Recommendations ............................................................................................................. 28 5.2.1. Training to Support ASM Workers to Mine Safely and Responsibly ............... 28 5.2.2. Integrate Legalisation within Broader Formalisation Strategies ...................... 29 Annex 1: References ........................................................................................................................... 31 Annex 2: Further Comments on Legal Aspects ............................................................................... 35 Annex 3: Detailed Case Study: Karamoja ......................................................................................... 36 A3.1. Area Overview ....................................................................................................... 36 A3.2. Supply Chain Stakeholders ................................................................................... 37 A3.3. Distribution of Economic Costs and Benefits across the Supply Chain ................ 41 A3.4. Key Conclusions from the Karamoja Case Study ................................................. 44 Annex 4: Detailed Case Study: Kampala Clay Area ........................................................................ 46 A4.1. Area Overview ....................................................................................................... 46 A4.2. Supply Chain Actors, Activities, and Production Costs ......................................... 48 A4.3. Distribution of Economic Costs and Benefits across the Supply Chain ................ 51 A4.4. Key Conclusions from the Kampala Clay Case Study .......................................... 54 The Economic Contributions of Artisanal and Small-Scale Mining in Uganda: Gold and Clay Abbreviations and Acronyms 3T tin, tantalum, and tungsten AIDS acquired immune deficiency syndrome AGR African Gold Refinery, Entebbe AM artisanal mining ARM Alliance for Responsible Mining ASGM artisanal and small-scale gold mining ASM artisanal and small-scale mining BOU Bank of Uganda CBO community-based organisation CIA U.S. Central Intelligence Agency cm
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