By: Ecofin agency

Uganda officially launched its first industrial gold mine with the inauguration of the Wagagai project. Until now, Uganda lacked large-scale mining operations despite gold being a key export. Wagagai Mining (U) Limited, a fully owned Chinese subsidiary of China Liaoning Hongda, invested $250 million to start the mine.

The Presidency confirmed the launch on August 16, kicking off Uganda’s entry into large-scale gold mining. This milestone comes as global gold prices rise sharply, creating a favorable market backdrop.

Gold prices increased about 30% since January, mirroring last year’s overall growth. The metal recently traded near $3,300 an ounce. However, analysts expect further hikes. Goldman Sachs predicts gold could reach $3,700 an ounce by the end of 2025.

While the rising prices may boost Wagagai’s revenues, the mine primarily expands Uganda’s small production base. Reuters reported Uganda produced only 0.0042 tonnes (135 ounces) of gold in 2023. In contrast, Wagagai aims to produce approximately 1.2 tonnes (38,500 ounces) annually. The mine plans to operate for 21 years, potentially creating 5,000 local jobs.

Uganda has not yet announced production forecasts for the remainder of 2025. Industry watchers will closely follow upcoming updates to evaluate Wagagai’s operational success and commercial impact.