Uganda on Tuesday opened its first gold refinery, hoping to tap into processing the precious metal from neighbouring producing countries.
The refinery, established by Russian-owned Victoria Gold Star Limited, has a capacity to process 1.2 tonnes of raw gold per month, the company’s managing director told Reuters.
Yuri Bogoroditskiy said the company was attracted to Uganda because of its location and relative political stability.
“Uganda is at the centre of the producers of gold: eastern DRC, Tanzania, Rwanda and Kenya,” Bogoroditskiy said.
“When we considered this to the fact that Uganda has a stable political system and supportive investment policies then we decided it was the best country to establish the refinery.”
The east African economy’s mineral industry is underdeveloped, characterised by small scale miners mainly involved in gold and cobalt, the leading mineral exports.
Earnings from the resources reached a high of $88 million in 2007 before slumping to $52 million in 2008.
The country exported 1.66 tonnes of gold in 2008, earning $35 million from 3.56 tonnes and earned $75 million in 2007, according to a 2008 government report.
The government welcomed the new refinery and called on miners, goldsmiths and mineral dealers to support it. “I want to reaffirm the commitment of government in supporting Victoria Gold Star Limited,” Hillary Onek, Minister of Energy and Mineral Development, said in a statement.
“In turn expect similar support from stakeholders in Uganda and the region to use the facility to add value to gold mined.” Uganda has seen a spike in foreign investment inflows lately following the discovery of hydrocarbon deposits in its western region on the border with Democratic Republic of Congo.