November 28, 2022

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Artisanal Miners Jostle with Investor over Kassanda Gold Mines

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One of the sampling pits

A rift has emerged between shareholders of Kisita Mining Company over management and mining operations in the gold-rich Kassanda district.

The emerging contest involves a group of 2,000 Artisanal and Small scale miners initially operating under the Kitumi Small Scale and Artisanal Miners’ Association, a United Arab Emirates-based investor, several politicians and local businessmen. The conflicting sides are after who should run the day-to-day mining operations of the company whose license covers over 8.716 square kilometres, according to sources.

“The battle is purely about who should carry out gold mining operations in this area which is turning to be highly productive. In the last months, a lot of gold has been coming out of this area. Artisanal miners feel they have a stake and so do the other parties,” one of the sources told URN on condition of anonymity.

The artisanal miners are plotting against the renowned banker Abbas Mawanda, and the investor Rashed Alsuwaid of Horizon Energy Ltd in a conflict which also entangles former Member of Parliament Muyanja Mbabali, businessman Amos Nzeyi, the Maviri Family, and USU Group.    

Available documents indicate that by 2015, the company had reached production levels of four kilograms of gold per month. However, due to several management issues, the shareholders were caught up in endless conflicts and ceased joint operation of the mine.    

“When the UAE investor became the major shareholder there were several conflicts arising from the way they had acquired the shares and their management style. Due to those conflicts, each shareholder informally sent artisanal miners to take on their respective interests,” the source adds.    

Documents from Uganda Revenue Authority also indicate that around the said period the company stopped remitting royalties and evading other taxes valued at 1.6 billion Shillings. This forced the Ministry of Energy and Mineral Development to suspend their license in June 2020.   

Rahim Mukasa Kayondo, the chairperson of artisanal miners, says the suspension of the license threatened the livelihood of artisanal miners whose only survival depended on mining activities. With the threat to their livelihood, Kayondo says, they decided to stop working as a proxy for shareholders and  acquired five per cent shares in Kisita Mining Company with the hope that they will be left to operate on their own.  

“We acquired the shares from Richard Henry Kaijuka at 63 million Shillings,” Kayondo noted, adding that as shareholders, they designed a plan to save the company. “We signed a Memorandum of Understanding with Uganda Revenue Authority-URA to settle the company tax liability thus stopping the tax body from taking over the company,”  Kayondo says.      

As URA left the mines, Kayondo adds that the other shareholders returned and ganged up against the artisanal miners asking them to vacate the mining area by leaps and bound. Muyanja Mbabali, a shareholder, says although the artisanal miners acquired shares in the company, it does not warrant them to carry out mining since there is functional management that is expected to oversee operations.    

“They are carrying out illegal mining in the area. The company has management and I don’t think that in all companies’ shareholders keep around to do causal works. They should just sit like bosses and wait for their dividends,” says Mbabali.   

The shareholders, through a third party, tried to challenge artisanal miners to move to agree with URA on behalf of the company in courts. But, the case was dismissed after the applicant’s failure to appear in court.   

However, Mbabali stresses that the matter has already been communicated to the president who in reply directed the energy ministry to evict the artisanal miners. “What I can say is that those people are going to be evicted. The president has already ordered,” said Mbabali.     

Although URN was unable to access the said letter from the president, our reporter has learnt that a group of senior police officers from Naguru held a meeting with the artisanal miners asking them to vacate before force is applied. But even after the meeting, artisanal miners who are currently operating 30 gold pits are not willing to vacate. Kayondo says it will be unfair to evict them since they also have a stake in the mines as shareholders.   

The face-off between artisanal and small-scale miners is not new in Kassanda. Gertrude Njuba’s AUC Mining Company also had a series of clashes with miners who experienced a brutal eviction in 2017 following a directive from President Yoweri Museveni.    

However, after several engagements, the President directed that the artisans be given at least 30 per cent of the exploration area covering 282.9sq km and as of today, they have resumed their work in the area.

URN

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