Tanzania and Uganda are planning value addition measures — including establishing a gold refinery in Tanzania — to boost their mineral prices on the international market.
The two countries believe that besides the revenues arising from taxation and royalties, value addition will create employment and help to develop skills.
In an interview with The EastAfrican on the sidelines of the Uganda Mineral Wealth Conference held in Kampala last week, the chief executive of Tanzania Minerals Audit Agency, Dominic Rwekaza, said that a number of investors had expressed interest in setting up the gold refinery.
“Whoever ventures into the refinery business will have to look for gold around and outside the country to boost volumes,” said Mr Rwekaza.
In Uganda, there is already a ban on exports of unprocessed iron ore. In addition, Tibet Hima, the company exploring for copper has been directed to process it up to 99 per cent.
Tanzania, on the other hand, has a policy that requires mineral investors to add value — at least to polish gemstones before exporting them.
Similar initiatives have been taken with tanzanite where the Tanzanian government is establishing Arusha as the gemstone hub, while gold will be refined within the country.
Tanzania produces 50 tonnes of gold annually, but that volume is inadequate to keep a refinery rolling. This is why it makes economic sense for Dar es Salaam to continue buying gold from other countries including DRC and Uganda.
However, in 2007, the UN Security Council placed an embargo on gold, tantalite, wolframite and casterite originating from Burundi, Rwanda and Uganda because of numerous reports that these countries are transit routes for smuggled minerals from the DRC.
Although there is an existing protocol on Illegal Exploitation of Natural Resources, one of the pacts signed under the International Conference on the Great Lakes Region specifically to address this limitation, countries are yet to domestic the protocol.
However, a committee comprising of members from the state parties has been established to fasttrack the protocol