Uganda’s Ministry of Energy and Mineral Development has been linked to a sprawling bribery scandal involving the abrupt cancellation of iron ore exploration licences previously issued to Ugandan companies.
The matter centres on Devki Steel Company, a Kenyan-Indian owned firm accused of paying bribes to senior ministry officials in order to seize control of high-value iron ore deposits in Muko, located in the Kigezi subregion.
Devki Steel Company is owned and chaired by Narendra Raval, also known as Mr Guru, who also serves as the executive chairman of Devki Steel Mills Limited — a powerful conglomerate with vast interests in the East African construction and mining sectors.
The takeover has left affected local companies reeling from massive losses, while suspicion deepens over how the ministry orchestrated the revocations and reassigned the lucrative rights with no clear justification.
According to multiple accounts, the decision was neither explained nor supported by any documented breaches by the local firms, yet the licences were reallocated to Devki Steel in March.
The companies had previously received approvals to explore the deposits in November 2023 and had already commenced operations, having acquired land, constructed access roads, and mobilised heavy machinery.
They had also passed key compliance thresholds, including environmental inspections and geological assessments, and were already in negotiations with global investors to establish steel plants worth billions of dollars.
The disputed deposits — estimated to contain over 250 million tonnes of iron ore — are located across Kanungu, Kisoro, Rubanda and Kabale districts.
President Yoweri Museveni had in 2021 made a campaign pledge to establish a steel plant in the region, prompting the initial licensing of local firms to launch the process.
That plan now lies in ruins.
The sudden shift in licensing has provoked outrage from Members of Parliament in the affected constituencies. They have accused top officials in the ministry of colluding with Devki to edge out Ugandan companies, many of which had sunk substantial capital into their work.
Devki Steel is said to have now taken full control of the Muko mines, even though it was previously accused of illegally extracting iron ore through its subsidiary, National Cement Company.
The company, under Raval’s leadership, allegedly exported up to five million tonnes of iron ore from Uganda — a staggering figure ten times above the original 500,000-tonne approval.
Officials in the ministry are accused of feeding false information to President Museveni, claiming Devki had ceased exports, while it is alleged that the company secretly moved an additional 4.5 million tonnes out of the country.
Uganda’s mining regulations explicitly ban the export of raw iron ore.
The restriction, imposed by President Museveni in 2015 to foster local industrialisation, was later entrenched through the 2021 Mining and Minerals Bill and the 2022 Mining and Minerals Act.
These legal frameworks were designed to retain mineral value within Uganda and boost employment in mining regions.
Permanent Secretary Irene Batebe had publicly argued that Uganda would benefit far more from in-country processing of minerals, estimating that each mine could create between 3,000 and 5,000 jobs.
Yet, Devki Steel continues to enjoy unregulated access to raw iron ore, which it reportedly processes in Kenya while purchasing the commodity from Uganda at rock-bottom prices.
Available data shows Devki buys the ore for between USD 7 and 10 per tonne and sells the final product in Kenya at prices ranging between USD 900 and 1,300 per tonne.
In contrast, local firms like Thembo Steels pay USD 45 to 50 per tonne and are said to invest more in local communities and labour.
The Devki export model has been criticised for undercutting domestic players and worsening environmental degradation through unregulated roadside mining sites.
Focus has now turned to Minister of State for Mineral Development, Hon. Phiona Nyamutoro.
She is accused of backing Devki’s contested takeover by facilitating high-level meetings with military figures such as General Salim Saleh and lobbying for fresh export permits.
Local firms accuse her of sabotaging their operations and compromising the integrity of her office.
Her position has come under further scrutiny following a 2024 incident in which she and other officials narrowly avoided gunfire from Devki’s private guards during a site inspection at Muko.
The team had been responding to reports that Devki’s subsidiary was mining unlawfully and blocking rightful licence holders from accessing the site.
Observers are now baffled by the apparent turnaround, as the same minister now appears closely aligned with the company whose guards once threatened her safety.
Legal analysts warn that Uganda may suffer grave financial consequences if the ousted firms initiate lawsuits for breach of licence and compensation for sunk investments.
There are also fresh fears that Devki may be using Uganda’s iron ore deposits as collateral to secure foreign financing, with little guarantee of actual reinvestment into Uganda’s economy.
In Kenya, Devki has previously been caught up in a KSh 4 billion tax dispute, during which internal communications reportedly revealed attempts to lobby the Kenya Revenue Authority to waive tax obligations for its subsidiaries.
The company has also faced quality complaints over underweight cement bags and rejected steel products flagged by contractors.
With the scandal now attracting growing attention, industry stakeholders warn that the fallout may deepen in the coming weeks — exposing what many now view as a grand betrayal of Uganda’s local mining ambitions by the very officials charged with defending them.
