Growing international interest in the Makuutu Heavy Rare Earths Project could give Uganda something more valuable than a new mining investment: negotiating leverage. The government should use that opening to seek commitments on processing, skills and local procurement.

Australian company Ionic Rare Earths holds 60 per cent of Rwenzori Rare Metals, the Ugandan company that owns Makuutu. In its quarterly report published on 13 October, Ionic reiterated the strategic review it began in July. The options include strategic or government-backed partners, new investment structures and potential listings in other jurisdictions.

Ionic says interest has increased as the United States and its allies seek secure sources of medium and heavy rare earths outside China. That offers Uganda an opportunity, but investor interest alone does not establish how much it can secure. The question should extend beyond whether Makuutu proceeds and how much it eventually exports. A more important question is what Uganda can build around it.

The deposit contains neodymium, praseodymium, dysprosium and terbium, which are used in the high-performance permanent magnets needed for electric vehicles, wind turbines and defence technologies. According to Ionic, mixed rare earth carbonate has already been produced at a demonstration plant in Uganda. The starting point is therefore some local processing, although demonstration output is not commercial production.

Uganda’s Mining and Minerals Act 2022 provides a basis for a more ambitious approach, with provisions for value addition, national content and geological information. Makuutu presents an opportunity to put those aims into practice as the company considers its development and funding options.

This does not mean every stage of the global rare earths supply chain must be established in Uganda immediately. Extraction, separation, refining, magnet manufacture and advanced component production involve different technologies, scales of investment and markets. Establishing an entire supply chain inside one country could delay rather than accelerate development.

The strategic review is a chance for Uganda to set out what it seeks from prospective investors and development partners. The aim should be a package around the mineral: commitments that build domestic capability and can be assessed as the project develops.

One component is processing capability. Building on the production of mixed rare earth carbonate, Uganda should seek a practical assessment of which further separation or refining activities could be commercially sustained locally. Even incremental progress can create technical knowledge and establish foundations for future industry. A pathway that leaves progressively more capability in Uganda is a more useful objective than insisting on every stage at once.

The second component is skills and technology transfer. A strategic mineral project should create more than mining jobs. Ugandan geologists, metallurgists, environmental scientists, engineers and laboratory technicians should emerge with expertise they can apply to other deposits. Training commitments tied to these roles, alongside partnerships with universities and other Ugandan institutions, could help turn a single mine into a national knowledge asset.

Third is local procurement. Mining creates demand for logistics, engineering, construction, environmental monitoring, laboratories, data management and professional services. Building competitive Ugandan suppliers around Makuutu could retain more economic value domestically than concentrating only on royalties and direct employment. Agreements should identify opportunities for local suppliers, the standards they need to meet and how progress will be assessed.

The fourth opportunity is information. Geological data, environmental monitoring, traceability and auditable supply-chain information are part of the knowledge developed around a mineral project. Uganda should seek arrangements that give its public institutions access to relevant data and the capacity to use it. That would help knowledge generated at Makuutu become part of national institutional capacity rather than remain largely within the project.

These ambitions must also serve the communities affected by development. Sustained engagement over land, livelihoods, environmental protection and infrastructure should be part of the arrangements from the outset. Addressing these issues is essential to local outcomes and the long-term viability of the project.

None of this should be perceived as hostility towards foreign investment. Being clearer about what Uganda requires could help it attract better partners. But the commitments sought must be compatible with financing and developing the project. Processing ambitions that cannot be commercially sustained would do little to build a lasting industry.

Makuutu’s greatest long-term contribution may be measured not only by tonnes produced or export revenues earned, but by what Uganda negotiates around the minerals in processing, skills, technology, local businesses and knowledge. The test will be whether those ambitions become commitments that can be tracked, and capabilities that Ugandans can use beyond a single mine.

Christopher Burke is a senior adviser at WMC Africa, a communications and advisory agency in Kampala.