13 March 2019

Uganda: Chinese Firms Fight Over Tororo Mineral Project

Kampala — Chinese investors are embroiled in a legal battle over ownership of a multimillion dollar mineral project in Osukuru Hills, Tororo District.

A Chinese company, Guangzhou Dong Song Energy Group, which implements the Osukuru Phosphate Comprehensive Project in Tororo, has been sued for alleged unlawful expropriation of the $620m (about Shs2.3 trillion) project on the 26square kilometre mineral site.

Launched in October last year, Guangzhou Dong Song Energy Group is jointly sued with its directors LV Weidong, Mao Jie, Yang Junjia and Uganda Hui Neng Mining Limited.

In the case before the Commercial Division of the High Court, a businesswoman, Ms Fang Min, is claiming more than $18m (about Shs67 billion) as interest after investing more than $5m in licensing requirements by the Department of Geological Surveys and Mines.

She is seeking general damages for economic loss and lost opportunities her company, Uganda Hui Neng Mining Limited, suffered as a result of the unlawful actions of Guangzhou Dong Song Energy Group.

Claims

Ms Min, who is also the proprietor of Fang Fang Hotel, alleges that government granted an exploration licence for the Osukuru phosphate reserves to Uganda Hui Neng Mining Limited where she is a shareholder, but in December 2013, LV Weidong, Mao Jie and Yang Junjia allegedly connived to pass a board resolution of Uganda Hui Neng Mining Limited to transfer its exploration licence to Guangzhou Dong Song Energy Group.

It is alleged that the purported board resolution was passed without the knowledge and consent of Ms Min and without following the due process of convening board meetings. During the case hearing before Justice David Wangutusi yesterday, a Canada-based mineral and valuation expert, Mr Chirisa Munyaradzi, testified that he assessed the projected income of the mineral deposit and filed a report to show that it was a profitable business.

Justice Wangutusi adjourned the hearing to April 23.

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