Selling Kilembe Mines is selling our inheritance

A resource-hungry country like China or Japan or the United States will probably take interest in this offer, pour in the capital, ‘extract’ the minerals and take them away to power their own economies. We shall get a few dollars, and then what shall we be left with?

Something is afoot in the physical endowments of Uganda. On the face of it, it is noble, but deeper examination shows that what is supposedly good for the nation or the local people could, in the end, be counter-productive. Take Kilembe Mines.

The Government has offered the venerable mines for divestiture, in a Public Private Partnership (PPP), in which the public (Uganda and its peoples) would jointly own the mines with a private entrepreneur. They are expected to, among other things, “enter an agreement with the Government, to take over rehabilitation of assets, to resuscitate Kilembe Mines Ltd’s mining operations, and to commit to exploring for potential further deposits within the concession precinct on an on-going basis”. The offered assets include land and buildings, minerals and mining rights, plant and machinery, timber treatment plant, mining plant, foundry and electrical workshops, hydroelectric power plant, lime works, and ponds with Cobalt content.

Sounds like rich pickings; indeed they could be rich pickings for those with the capital. Unfortunately, there will not be any local companies or entrepreneurs with the capital and technical wherewithal (one of the requirements is for applicants to “demonstrate experience in the operation and/or revitalisation of similar mines”, which effectively rules out local firms).

Even if we got a local firm or consortium of investors, the end result would still be a loss to Uganda, because the products – Copper and Cobalt – are unlikely to be consumed in Uganda.

The Privatisation Unit has, in its advert, put in a rider that “applicants should be able to demonstrate capacity to process all the Copper Ore in Uganda (which is what used to happen between 1956 and the 1980s, when mining closed down) 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”.

That sounds good, except that it is not feasible. With current levels of industrialisation, we do not have sufficient capacity to consume the copper products and the Cobalt (Cobalt is used for high strength alloys and, medically, is essential for all animals including humans), which leaves the only viable option to be export.

Any interested parties will probably see that there is no local market and will build in an export component in their proposal. Now, export of a country’s natural resources, raw or processed, is not wise especially if the country expects to industrialise and become a middle class economy, let alone a First World nation in the distant future.

A resource-hungry country like China or Japan or the United States will probably take interest in this offer, pour in the capital, ‘extract’ the minerals and take them away to power their own economies. We shall get a few dollars, and then what shall we be left with?

We need to heed lessons from the past – reports say many places in the famed Copper Belt of Zambia are bleak, empty expanses after decades of extraction. In Uganda, even the railway to Kasese no longer works – it was made to extract – and does not benefit local people. On the outskirts of Johannesburg are great mounds of earth coming from decades of mining and exporting gold – today the greatest gold reserves are held in, in descending order, America, Germany, Italy, France, China, Switzerland, Russia, Japan, Netherlands, and India, all of which keep a considerable percentage of their foreign reserves in gold (there is talk of one day going back to the gold standard as an international currency). Of those ten countries, only China, the US and Russia actually produce gold.

The haste to offer our mineral resources for mining and export for the sake of a few dollars and short-term ‘development’ is akin to the biblical story of Esau and Jacob (Genesis 25: 27-34), the former coming home hungry and demanding for a bowl of stew, and the latter only giving it to him on condition that he sells him his birth-right/inheritance. Esau was said to have ‘despised his birth-right/inheritance’. The same principle applies to individuals or families that, for short term gain like paying school fees or building a house, sell long-held valuables like land.

Is this resource nationalism? Call it that if you may, but the long term benefit for families/communities/countries from resources that have existed for centuries, even millennia, must be considered carefully. (Last week, religious leaders, local MPs, and elders in Karamoja protested a Government decision to locate a cement factory in Budaka, Pallisa, yet the limestone feeding it will come from Rupa, in Moroto. The factory should be in Karamoja, so that local Karimojong benefit from their inheritance. It is how their livelihood will be lifted).

We should keep these resources intact till we are absolutely ready to exploit them for our own internal, sustained benefit.
dsseppuuya@yahoo.com