The Mines Department in the Ministry of Energy and Mineral Development has warned more than 300 companies and individuals to pay outstanding dues in licence fees and royalties; failure of which defaulters will be subjected to legal action.
In a notice, the Ministry named companies and individuals that have fallen into default on statutory payments, highlighting a growing compliance gap on both annual mineral rent fees and royalties.
‘This . serves as the last and final notice to all . licence holders to pay their respective amounts within 14 days of the notice before further legal action is taken,’ the notice reads in part.
The notice shows total arrears of Shs5.73b across the two categories, of which annual mineral rent fees account for Shs3.67b, while royalty arrears amount to Shs2.05b.
The notice further lists 149 licence holders as defaulters under annual mineral rent fees, while 165 licence holders are cited under royalties.
The Ministry shows that among the ‘list of defaulters’ of annual mineral rent fees, the largest defaulters include Woodcross Mining Company at Shs120m, followed by Kilembe Mines at Shs65m and Shiye Mining at Shs59.4m.
For royalties, the notice shows that Kifaru Holdings leads at Shs500m, followed by Great Lakes Iron and Steel Company at Shs439.28m, and Kigezi Iron Ore Artisanal Miners Association, which owes government Shs208.38m.
The notice comes as government places renewed emphasis on domestic revenue mobilisation and tighter oversight of the extractives sector, which has been promoted as one of the economy’s next major growth pillars.
This is also widely viewed as a shift in enforcement from routine back-and-forth between licence holders and regulators to more visible accountability measures.
Mineral companies are required to pay fees and royalties for mining rights, which are government-issued permits to explore, develop, or extract resources held in trust for the public.
In exchange for this privilege, operators are expected to meet regulatory conditions, including environmental and reporting obligations, and to make scheduled payments to government, which are intended to ensure the country obtains tangible benefits from non-renewable resources.
Annual mineral rent fees serve as the cost of holding a licence over time, while royalties, on the other hand, are linked to extraction and sales and represent the public’s direct share of mineral production, often charged as a percentage of assessed value or on a production basis, so that when minerals leave the ground and enter commerce, the country receives a return immediately, even before corporate income tax and other obligations are calculated.
That makes royalties especially sensitive: when they are not paid on time, it raises questions about the accuracy of production reporting, the integrity of mineral valuation, operational cash-flow pressures, or deliberate non-compliance.
Defaults build up due to the fact that some smaller or mid-sized operators struggle with liquidity, particularly in remote operations where transport costs, fuel prices, and equipment maintenance can be punishing, and where access to affordable credit is limited.
In other cases, the build-up can be administrative, with weak internal controls and delayed reconciliations allowing arrears to accumulate unnoticed until the regulator flags them.
But the change of enforcement signals government’s increasing worry about firms that continue operating, while postponing statutory payments, effectively using government obligations as an interest-free source of financing.
Persistent failure to meet statutory obligations exposes licence holders to penalties and interest, challenges in renewing licences, suspension of activities, or other sanctions, depending on the governing terms of the mineral right and applicable law.
The scale of the arrears published in the notice also shows a gap in matters for public confidence. Communities in mining areas regularly demand clearer evidence that extractive activity translates into local and national benefits, especially where environmental impacts and land-use pressures are high.
Royalties and licence-related fees are among the most visible indicators that government is capturing value from extraction, alongside taxes and employment-related contributions.
Companies that pay fees and royalties on time have previously argued that non-compliant competitors gain an unfair advantage by cutting corners, delaying payments, and underpricing products.
Therefore, recovering Shs5.73b is not only about closing a revenue gap, but also about strengthening mineral governance, where transparent reporting, credible monitoring, and consistent enforcement are critical to sustaining investment and public trust.