Uganda: Government in Final Stages to Call Bids for Kilembe Mines

23 September 2019

Government is fast-tracking a process in which it hopes to call interested investors to revive Kilembe Copper Mines in western Uganda.

In a status report from the Directorate of Geological Survey and Mines, government indicated it is quickly closing in on calling interested investors to revive the mines that have been under care and maintenance since 1982.

"A request for proposal document (RFP) is being finalised, after which interested parties will be requested to formally express interest," Mr Data Gabriel, the Directorate of Geological Survey and Mines assistant commissioner, said while announcing the eighth annual mineral conference slated for next month.

The move follows a Cabinet resolution directing the Ministry of Finance, Justice, Energy and Kilembe Mines Limited to fast-track the process of identifying a new investor to revamp the mines after termination of a concession agreement with Tibet Hima Mining Company.

A committee has since been set up to developed a term-sheet for the proposed mineral production sharing agreement and evaluation criteria under a Public-Private Partnership.

The committee will also be in charge of shortlisting interested companies.

The mines, which have been on care and maintenance for close to 40 years, had been handed to a Chinese company - Tibet Hima Mining Company - but government cancelled the 25-year concession, citing failure to implement planned investment in accordance with the permit and lack of capacity to develop the mines in accordance with modern technology.

Tibet Hima Mining Company had pledged to invest $175m after winning the concession in 2013 but had by the time of cancellation not lived up to the pledge.

The Chinese company sued government seeking compensation of at least $33m in damages and loss of business.

The mines are estimated to contain at least four million tonnes of ore.

Once a major copper and cobalt producer, the Kilembe Copper Mines were abandoned by Canadian firm - Falconbridge in the 1970s at a time when output is said to have peaked.

The mineral sector then contributed 30 per cent to the country's gross domestic product compared to 0.3 per cent currently.

To boost the sector's contribution to 7 per cent, Mr Richard Kaijuka, the chairman Uganda Chamber of Mines and Petroleum, recently called upon big exploration companies to complement present ones that he said were not conducting organised mining.

Tibet losses petition

Tibet Hima Mining Company lost an application for a temporary injunction in April 2018 seeking to block government from interfering with its operations after its 25year concession was cancelled in October 2017.

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