China-Backed $250M Gold Mine Marks New Era for Uganda

Uganda has opened its first-ever large-scale gold mine, a landmark project located in the country’s eastern Busia District and backed by a $250 million Chinese investment.

Officials said that the facility also includes a state-of-the-art refinery capable of producing gold with a purity of 99.9 percent.

As a landlocked nation rich in natural resources such as copper, cobalt and iron ore, Uganda aims to expand its mining sector and position itself as a major gold producer and exporter. The project marks a strategic shift, transforming Uganda from a transit hub processing gold from neighboring countries into a genuine producer and exporter of domestically mined gold.

Economic ties between China and Uganda have deepened significantly over the past decade, evolving into a strategic partnership fueled by large-scale Chinese investments in key Ugandan sectors.

Within this context, the Wagagai Mining Project represents a new era for Uganda’s mining industry. Developed by Chinese firm Wagagai Mining, a subsidiary of Liaoning Hongda Group, the project integrates gold mining, flotation, smelting and refining facilities across more than nine square kilometers.

The investment is being rolled out in three phases. Phase I, worth $150 million, has already been completed and created around 2,000 jobs. Phase II is expected to be finalized by 2027, while Phase III is scheduled to run from 2030 to 2035.

Ugandan authorities see the Wagagai project as a milestone in the country’s industrialization and economic diversification, in line with the 2022 Mining and Minerals Act and Vision 2040. More than 25 million metric tons of Uganda’s estimated 31 million tons of gold reserves are located in the Wagagai deposit, ensuring long-term sustainability.

The facility is expected to process 5,000 tons of raw ore per day, producing about 1.2 tons of refined gold annually. This represents a dramatic leap from Uganda’s meager output of just 4.2 kilograms last year. The refined gold will enhance Uganda’s export profile by adding value locally and creating a more stable flow of international sales.

Beyond export earnings, the project is projected to create between 2,000 and 3,000 direct jobs, boost local economies and strengthen Uganda’s mining regulatory framework. As the nation’s first large-scale gold mine, Wagagai will also serve as a test case for governance and management systems in the sector.

According to the Bank of Uganda, gold exports generated $3.4 billion last year—about 37 percent of the country’s total export revenue. Much of this figure stemmed from re-exports of imported gold, while local production was dominated by small-scale operations. By contrast, Africa’s top gold producer, Ghana, exported $11.6 billion worth of gold in the same period.

President Yoweri Museveni emphasized the importance of adding value to all mineral resources, including gold, lithium and tin to maximize national benefits. He said revenues from gold exports will be reinvested into strategic assets such as power plants and Uganda’s $3.16 billion standard gauge railway, which aims to reduce transport costs for imports and exports by linking the country more efficiently through Kenya.