Rwenzori Rare Metals Limited has been granted a 21-year mining license for the Makuutu rare earth elements mining project. The license, effective from December 28, 2023, was exchanged between Energy and Minerals Development Minister Ruth Nankabirwa and the CEO of Rwenzori Rare Metals Limited, Warren Tregurtha.
This marks a significant development, as Rwenzori Rare Metals Limited becomes the first Large Scale Mines to be licensed under the new Mining and Minerals law enacted by Parliament in 2022. The project, covering an area of 44 square kilometers in some districts of Busoga, is anticipated to be the first in Africa to extract rare earth minerals from clay-type deposits.
The rare earth elements found in Makuutu reportedly consist of 17 minerals designated globally as significant, particularly within the global energy transition debate. The Minister emphasized the project’s potential benefits, including royalties for the people of Busoga and its support for the country.
The Minister outlined conditions for the company, including the commencement of operations within a year from the award of the license. Additionally, she highlighted the government’s 15% share in the project as per the Mining and Minerals Act 2022, indicating the establishment of the Uganda National Mining Company to oversee state participation.
Rwenzori Rare Metals Limited has proposed using the ionic desorption process for mineral recovery, emphasizing the less sophisticated and environmentally friendly nature of the technology. Compensation models for landowners include cash, land-for-land, and land-for-buildings exchanges.
Under the Mining Act 2022, exploration and mining licenses should undergo a competitive bidding round, aligning with procedures in the oil and gas sector. The delay in awarding the license aimed to ensure coverage under the new mining law.
The license carries conditions prohibiting the transfer of the large-scale mining license or its share before full payment and compensation. Reports suggest a potential increase in shareholding by Australian company IonicRE, but the CEO of Rwenzori Rare Metals Limited, Warren Tregurtha, declined to comment on the matter.
The Makuutu project’s total mineral resource estimate is approximately 532 million tonnes.
