Uganda Museveni: UPDF Ordered to Combat Mineral Smuggling

• President Yoweri Museveni has directed the Uganda People's Defence Forces (UPDF) to combat mineral smuggling and ensure raw material access for local processors.
• The directive, issued on September 7, 2026, aims to stop revenue loss and support investors in steel, tin, and wolfram industries.
• Museveni highlighted significant economic losses from exporting unprocessed minerals, citing specific price differentials for tin and wolfram.
• The government's policy emphasizes local value addition, with implications for miner licensing and raw material supply for refiners.
• The President also addressed land compensation for customary landholders and potential local government shares in mining projects.

This move signals a heightened commitment to enforcing mineral regulations and combating illicit trade within the sector, directly involving the military in what is typically a civilian enforcement domain.

President Yoweri Museveni has issued a significant directive, ordering the Uganda People's Defence Forces (UPDF) to actively participate in curbing mineral smuggling across the nation. This mandate, articulated in a letter dated September 7, 2026, was addressed to the Chief of Defence Forces at the Ministry of Defence and Veterans Affairs/UPDF headquarters in Mbuya. The President's instruction specifically calls for the attachment of a military officer to the 2nd Division area, tasked with collaborating closely with the Ministry of Energy and Mineral Development to address these issues.

The primary objective of this intervention is to ensure that local mineral processors gain access to essential raw materials, thereby preventing the frustration of vital investors and mitigating the substantial revenue losses currently experienced by the country. Museveni explicitly accused illegal mining operations and associated smuggling activities of undermining Uganda's economic interests. This move signals a heightened commitment to enforcing mineral regulations and combating illicit trade within the sector, directly involving the military in what is typically a civilian enforcement domain.

President Museveni's directive underscores a critical national strategy focused on mineral value addition, highlighting how the illicit trade in raw minerals severely impacts key industries. He specifically identified three sectors facing significant disruption: steel production, which relies on haematite iron ore; tin processing; and wolfram refining. These industries, according to the President, are being hampered by the unauthorized extraction and export of unprocessed materials, which he referred to as actions by "local and potentially external actors" that undermine national development.

Illustrating the economic benefits of local processing, Museveni cited the potential for steel production to utilize iron ore deposits found in areas like Muko in Rubanda District and Butogota in Kanungu District in southwestern Uganda, as well as magnetite deposits in the eastern region. He noted that investors, such as Guru of Devki Steel Company, are prepared to develop Uganda's steel industry, projecting annual savings of $792 million in imports for Uganda and $2.4 billion for the broader East African community. Similarly, he pointed to Woodcross Resources Ltd, which operates a tin refinery in Mbarara, as an investor whose operations are negatively affected by the sale of unprocessed ore.

The President further detailed the stark financial disparities between raw and processed minerals. A tonne of tin ore with 68 percent purity, for instance, fetches approximately $20,000, whereas a tonne of refined tin at 99.85 percent purity commands around $29,000, representing a potential loss of $9,000 per tonne when sold unprocessed. For wolfram, the contrast is even more pronounced: an unprocessed tonne of 65% purity yields about $40,000, while a tonne of 99.9% purity wolfram concentrates can bring in $145,000. These figures powerfully articulate the government's push for domestic mineral processing, emphasizing the significant revenue, employment, and foreign exchange benefits lost through the export of raw materials.

This decisive action by President Museveni reinforces Uganda's commitment to its mineral value addition policy, signaling a stricter regulatory environment for the mining sector. The President questioned the rationale behind licensing miners who lack the capacity for mineral processing, asserting that the government's overarching policy is to foster in-country value addition. This implies a potential re-evaluation of existing licenses and a more stringent approach to future approvals, prioritizing entities capable of contributing to local processing.

The directive explicitly states that refiners of steel, tin, wolfram, and other minerals must now gain immediate access to all necessary raw materials. This mandate is designed to support investors who have been attracted by the government's policy but have struggled to secure sufficient supplies due to illegal mining and smuggling. Furthermore, the President addressed land-related issues, suggesting that compensation should be considered for individuals holding customary landholdings, known as bibanja, where land is required for mining or industrial development. He also indicated that local governments could be allocated shares in such ventures, in accordance with existing legal frameworks.

This directive signals a significant escalation in enforcement within Uganda's mineral sector, with direct military involvement in curbing smuggling and promoting local processing. Lawyers advising mining companies, investors, or mineral traders in Uganda must anticipate stricter compliance requirements, potential reviews of existing licenses, and increased scrutiny of raw material exports, necessitating a re-evaluation of operational risks and supply chain practices to align with the government's value addition agenda.

Source: Original reporting via a recent presidential directive.