The Mining and Minerals Act 2022 gave the state a free-carried interest in medium and large-scale mineral licences. Four years on, we look at how DGSM licensed mining companies are adjusting.
By David Mugisha..Kampala.6 min read
Kampala. 20 May 2026.
MixedMining & Regulation
The Mining and Minerals Act 2022 did two things at once. It rewrote the licensing regime that the Directorate of Geological Survey and Mines (DGSM) administers. It created the uganda national mining company (unmc) to hold the state's commercial interest in mineral projects, including a free-carried stake in medium and large-scale licences.
Four years on, the practical question for operators is no longer whether the state has a seat at the table. It is how quickly a company can move from exploration to production with a state shareholder in the room. What that shareholder expects on employment, buying and community investment.
What DGSM licensed mining companies now have to show
Licence holders are assessed on more than geology. Environmental and social impact assessments, mine closure planning, occupational safety systems and evidence of local content all sit in the file. District officials we spoke to in Busia and Karamoja said the paperwork burden has risen, but so has the ability to distinguish a serious operator from a speculative one.
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The Act moved the argument from whether minerals belong to Ugandans to how the benefit is actually delivered in the districts where the ore is.
Mining sector adviser, Kampala
Where the friction is
Two complaints recur. Smaller applicants say the cost of compliance is high relative to a modest deposit. Community groups say the state stake has not yet translated into visible district-level spending. Both are fair, and both point to the same fix: transparent reporting of what each licence actually delivers.
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For now the operators drawing the least resistance are the ones that publish their community spending, hire locally and keep an open door to district water and health officers. That is a low bar in theory and a rare standard in practice.
How the state stake is meant to work in practice
The free-carried interest UNMC holds does not need the company to pay for its shareholding upfront, a structure modelled loosely on similar state mining vehicles elsewhere in Africa, but it does need UNMC to be represented on the technical committees that review licence compliance, giving the state visibility into operational decisions it previously only saw through DGSM's regulatory filings. Ministry officials describe this as a shift from purely regulatory oversight to something closer to an informed shareholder relationship.
Civil society groups tracking extractives governance have welcomed the state stake in principle but have pressed UNMC to publish how its share of any future dividends will be given, specifically whether producing districts will see a defined portion, rather than the revenue disappearing into general treasury accounts with no local earmark.
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A free-carried interest is not free if the district that hosts the ore never sees where the dividend went.
Extractives governance campaigner, Kampala
The clearest signal to watch for is UNMC's first published annual report, expected to set out both its licence-by-licence equity positions and, campaigners hope, a formula for how any resulting revenue will be shared with producing districts.
Frequently asked
Frequently asked questions
What is the Uganda National Mining Company?
The UNMC is the state-owned company created under the Mining and Minerals Act 2022 to hold Uganda's commercial interest in mineral projects, including a free-carried interest in medium and large-scale mining licences.
Which body issues mining licences in Uganda?
The Directorate of Geological Survey and Mines (DGSM), within the Ministry of Energy and Mineral Development, licenses and supervises mineral operations.
Which licensed companies operate in the Lake Victoria Green Belt?
The belt hosts a small number of fully-licensed medium-scale gold operators working under DGSM oversight, alongside a large artisanal and small-scale sector.
Evidence & documents
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David Mugisha tracks Uganda's mining law and licensing regime, including the Mining and Minerals Act 2022, DGSM licensing practice and the role of the Uganda National Mining Company.
