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CAPE TOWN Feb 10 (Reuters) - Uganda's new mining law seeks to scrap a series of taxes and introduce bidding rounds for exploration licenses with the aim of attracting investors to a long-neglected sector, the mining minister said on Tuesday.
The east African country, which is on track to become an oil exporter, says geological surveys have revealed significant deposits of a range of minerals including iron ore, gold, uranium, rare earths, titanium and diamonds.
The new law, to be reviewed by cabinet in March, proposes to abolish the exploration tax as well as an 18 percent value added tax (VAT) on mining equipment to lure investors into the sector, Peter Lokeris, state minister for minerals and energy, said.
"We found the exploration tax to be so prohibitive, the companies are really complaining," Lokeris told Reuters on the sidelines of the Mining Indaba conference in Cape Town.
The draft bill, which needs to be passed by parliament first after getting the go-ahead from cabinet, also recommends moving away from the "first-come, first-served" exploration licensing policy to help eliminate passive speculators.
"We want to streamline this by instituting the procedure of bidding rounds," Lokeris said.
Although Uganda has done little to tap its mineral resources, it has estimated oil reserves of 3.5 billion barrels discovered in its western region along the border with the Democratic Republic of Congo in 2006.
But production has been repeatedly delayed by contractual disagreements, tax disputes and infrastructural setbacks. (Reporting by Wendell Roelf; Editing by James Macharia)
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