Uganda has inaugurated its first large-scale gold mine, a $250 million Chinese-owned project in the country's east that will also refine the bullion to 99.9% purity, according to a statement from the president's office.

The landlocked East African country, which has a variety of minerals including copper, cobalt and iron ore, wants to expand its mining industry and position itself as a major gold producer and exporter.

Last year, Uganda raised $3.4 billion from gold exports, according to central bank data, about 37% of the country's total export revenue. The figure includes the re-export of gold brought into the country, with nearly all its domestic production from small-scale artisanal miners.

While its gold export earnings have increased in recent years, it is still far behind Africa's largest bullion producer Ghana, which raised $11.6 billion from shipments of the metal last year.

President calls for more value addition

"In order to wake up in the minerals sector, we must have full value addition for all minerals like gold, lithium, tin among others," President Yoweri Museveni said in a statement issued late on Saturday.

The Wagagai Gold Mining Project, owned by Wagagai Mining (U) Limited and covering just over nine square kilometres in Busia district, was inaugurated by Museveni on Saturday.

The plant, which has started operations, is expected to process 5,000 tonnes of gold ore per day and produce about 1.2 metric tonnes of refined gold a year, according to the statement. That compares to Uganda's total domestic production of just 0.0042 tonnes in 2023.

Uganda will use the revenue generated by exporting gold to develop assets such as power stations and the country's railway, Museveni said.

Landlocked Uganda is currently constructing a 2.7 billion euro ($3.16 billion) standard gauge railway to reduce the cost of transporting its exports and imports via neighbouring Kenya.