Unlocking the Full Potential of artisanal and small-scale mining in Uganda – Supporting their formalization journey.

September 1, 2026

Ms. Nwanne Vwede-Obahor giving a certificate of recognition to a cooperative during the 6th Annual Great Lakes Mining and Energy Transition Mkutano

The Transition to Formal Enterprises

A large proportion of Uganda’s aggregated mineral production stems from artisanal and small-scale mining (ASM). ASMs account for more than 90% of Uganda’s metallic, industrial, and building minerals output. Other official government reports estimate that ASMs contribute to more than 75% of the country's overall mineral production.

Within the development minerals sector (which includes materials like clay, sand, and stone aggregate), ASMs are responsible for an estimated 83% of all production by value. Data shows that if all production from ASMs within Uganda’s Development Minerals sector were accurately captured, Uganda’s GDP figures would grow by 1.4%. Unfortunately, majority of these ASMs largely operate informally and out of reach by technical service providers. Therefore, their contribution to Uganda’s economic growth has not been adequately covered and their access to necessary technical support has remained limited.

A recent discussion during the 6th Annual Great Lakes Energy Transition and Mining Mkutano organized by the Africa Centre for Energy and Mineral Policy in Kampala, Uganda, sought to delve deeper into the options and opportunities for Uganda to fully capitalize on its growing ASMs aligned with Uganda’s 10-fold growth strategy.

Salt extraction site at Lake Katwe in Kasese District

Registration and Licensing

The Africa, Caribbean and Pacific – European Union (ACP-EU) Development Minerals Programme’s primary ambition for formalization in Uganda is to integrate the informal ASM sector into the formal economy. Hereby transforming it into a productive, profitable, and sustainable industry. This initiative, which is implemented by the UNDP, has been supporting miners to transition beyond mere subsistence to production that is accompanied by access to appropriate technical support. Further, enabling them to participate in processes that enable them to become legally compliant artisanal and small-scale mining enterprises (ASMEs) with recorded contributions to national development.

Central to this transition is the Mining and Minerals Act of 2022. A landmark law that established a legitimate licensing framework and led to the issuance of the nation's first small-scale mining license to a grassroots association in 2025. A license for such associations is an important step. There are nonetheless associated processes required to support these institutions in ways that address costs of production and predatory intermediaries. Subsequent processes include for instance the professionalization of mining cooperatives, transforming them into viable small and medium enterprises (SMEs) through structured business development services, improved financial literacy, adoption of sustainable mining practices and other support to make them strong enterprises. Decentralized support necessitates that Uganda must move beyond legal licensing, toward holistic transformation that integrates informal miners into the formal economy as productive, profitable, and responsible ASMEs.

A stonecutter processing dimension stones into finished tiles

Collaborative Institutional Governance

Finally, collaborative governance and strengthened collaboration between ASM and large-scale mining companies is essential with a view of expanding business and investment opportunities, reducing conflicts and stabilizing mineral supply chains. Benefits such as improved access to new mining technologies, equipment and skills can arise as a result of well-organized and governed cooperatives collaborating with larger mining companies. Governments, the private sector, and other development actors should help build responsible actors around ASM, including specialized equipment suppliers, service providers, and legal consultants tailored to the sector's unique needs.

Support through Multiple Government Channels

To achieve sustainable formalization of Uganda's ASM sector, informal miners must be integrated into the formal economy as productive and responsible enterprises. This requires a structured transition from basic organization to registered entities supported by stronger local government capacity for permit management and extension services. In this way, formalization remains a multi-stakeholder process that includes different ministries, agencies, and stakeholders with unique roles in the transformation. Specifically: the Ministry of Trade, Industry and Cooperatives would provide business development services to newly formed mining cooperatives to support them manage and access additional financing better; a district natural resource office would regularly interface with newly formed mining cooperatives to provide guidance about managing the environmental impacts of mining; the Ministry of Gender, Labour and Social Development would intensively follow up and support miners to manage the occupational health and safety aspects of their mining operations. Correspondingly institutions and other actors would support the ASM sector in processes that involve adherence with strong social and environmental safeguards, the elimination of child labour, and greater gender equity among all mining cooperatives. This approach ensures that formalization directly delivers the benefits of decent employment for miners and their communities, and the miners and other sector stakeholders would derive meaning, benefit and strategic positioning after the first step of legal formation and registration.

Quarried stone slabs prepared for loading

Bridging the "Missing Middle" of Finance

Formalized ASM operations often face a missing middle. They are too large for microfinance but seen as too risky for commercial finance. Bridging this gap requires an investment continuum that moves the sector from donor reliance toward private capital. Demystifying mineral value chains for financial service providers will facilitate development of appropriate products for ASMEs. It is therefore necessary that the financing sector is fully brought on board to engage and better appreciate mining sector dynamics, opportunities, and strategic positioning in Uganda.

Furthermore, development partners and other public financial institutions should provide technical assistance and patient capital to establish a track record through training, grants and subsidized financing to ASMEs. For instance, in the Philippines, miners are exploring supplier agreements with the Central Bank to use as collateral for bank loans. Other elements include using geological data or production history to prove creditworthiness. Combining public/philanthropic capital with private investment can therefore de-risk the sector through risk-sharing facilities that cover a portion of potential losses for commercial lenders.

To achieve long-term sustainability, formalized cooperatives must move up the value chain. Investing in community processing facilities or shared mills, which then allows cooperatives to transition away from charging fees to non-member miners to generating consistent revenue. In addition, by registering as a social enterprise, cooperatives can reinvest a portion of their profits into an ASM Fund. This fund can finance local education, health services, and environmental rehabilitation, ensuring mineral wealth translates into community prosperity. Strategic win-win agreements between large-scale mining (LSM) and ASMs can provide artisans with access to professional labs and safer processing while securing a social license to operate for large companies.

Formalization is the cornerstone of a sustainable sector, but it is not enough on its own. The future of ASM depends on a fundamental shift where ASMs are seen as legitimate economic development players. By providing the necessary financial inclusion, technical capacity, and market access, the global community can ensure that for millions of miners, the question of what next? is answered with growth, safety, and economic dignity.

By Hope Kyarisiima, Country Coordinator, ACP-EU Development Minerals, and Precious Nwachukwu, Communications and Partnerships Associate.