Oil should flow, minerals stay put, solar power on

We export a lot of primary commodities or semi-processed things yet, if we are to catch up with the rest of the world, we should be using our natural endowment to kick-start our own development.

Last week, this column argued that the exploitation of our minerals needs to be done much more judiciously, allowing for the long term strategic interests of the country, and the need to avoid the Esau Syndrome that has laid to waste a lot of Africa’s natural resources.

Referring to Kilembe Mines, which is on offer for divestiture in a Public-Private Partnership arrangement, the argument was that the offer was premature, because Uganda is not yet industrially mature enough to consume the copper products and the cobalt, which means they would probably be exported, to our eternal disadvantage.

One correspondent, who is fairly familiar with the transaction, pointed out that Kilembe is not an outright sale and that the partnership would ensure that there is value addition, and good benefits for the country. The proviso that the entrepreneur ensures that “applicants should be able to demonstrate capacity to process all the copper ore in Uganda 100 per cent and for it to be usable in the manufacture of electrical wires, transformers and any other relevant materials for the purpose of Uganda’s industrialisation” was thoughtfully and authoritatively taken. Good points, which seem fine on paper, but likelihood is that the reality will be different to the intentions.

In Kilembe’s case, the odds are currently stacked against internal consumption of copper and cobalt because our levels of industrialisation today are such that the only market for revamped mining/smelted ore and semi-primary products thereof is the export market. And therein lies a strategic problem for Africa – we export a lot of primary commodities or semi-processed things yet, if we are to catch up with the rest of the world, we should be using our natural endowment to kick-start our own development through research and development, industrialisation and manufacturing for export, all with the attendant benefit of mass job creation. Because mass employment for our burgeoning population (Uganda’s population is projected to be 112 million in 50 years, a mere generation away) will only come from big industries, of which manufacturing is the most strategically viable. So our geological endowments need to be used for that strategic position.

Since we are not yet ready to maximise, why the rush? These minerals have been around for centuries, even millennia, so no need to get rid of them in a few short years. We still have many generations of Ugandans to come and, once they are ready when our development level has reached optimal point, then they can use the mineral resources for longer term benefit. I have an anecdotal account of un-mined resources of what is called “porphyry copper deposits” and other minerals in the semi-arid US state of Arizona. Who knows when these will finally be mined? The US does not lack the technical or financial means to mine them – they just have a strategic vision to do it later.

In contrast to many of these minerals whose exploitation needs to be phased strategically – Uganda’s geological resources include the metallic minerals beryl, bismuth, columbite, copper, chromite, diamond, gold, iron ore, tin and wolfram, and the industrial minerals asbestos, clay, diatomite, feldspar, granite, gneiss, graphite, gypsum, kaolin, kyanite, limestone, marble, mica, phosphates, rock salt, silca sand, talc, and vermiculite – the big one, oil, is ready for mining, refining, and exporting (with local consumption). Oil can sustainably change our economy, and there can be direct benefit to the citizens who would consume the oil themselves.

President Museveni has rightly, in my view, insisted on a refinery (Kenya’s own oil discoveries and existing refinery notwithstanding), so that we can maximise local value-addition to our exports. Oil’s time is now.

‘Understand Uganda’, the Daily Monitor publication marking 50 years of independence, published an insightful article on Uganda’s concentrated solar power (CSP) potential, pointing to CSP as a panacea to our chronic energy deficit. Put together by a think tank, the Institute for National Transformation (INT), the report pointed out that Uganda has some of the world’s highest CSP potential due to our high altitude location on the equatorial Sun Belt where we receive radiant solar energy, with potential to generate up to 100,000MW of electricity. The highest annual global radiation on earth is received in the Lira – Kaberamaido area.

Now Ghana is going to build Africa’s largest CSP plant. Blue Energy, the British company developing the $400m project, said last week the 155MW solar photovoltaic (PV) plant will be fully operational by October 2015. Construction is due to begin near the village of Aiwiaso in western Ghana next year, the Guardian newspaper reported.

At the time of planning it was the fourth biggest of its kind in the world. Ghana wants to increase renewable energy from 1 per cent of the country’s energy mix to 10 per cent by 2020. Uganda can add CSP to its good but more complicated renewable hydropower.

dsseppuuya@yahoo.com