Shs450b Kilembe investment to benefit local communities

Wednesday September 11 2013

Shs450b Kilembe investment to benefit local communities

A dilapidated section of Kilembe Mines. File Photo.  

By Faridah Kulabako

The Chinese Consortium Tibet-Hima plans to invest at least Shs450 billion (about $175 million) in the first three years as it embarks on a journey to revitalise Kilembe Copper Mines Limited, after it was awarded concession rights by the Uganda government.

Tibet-Hima Consortium chairman Li Weiguo, said the transaction is expected to derive additional benefits to Ugandans through the rehabilitation of Kilembe’s social infrastructure including roads, hospitals, schools and housing, create employment to the communities and promote revenue sharing with the Uganda government through royalties and sharing of windfall profits.

The consortium, which beat off eight other bidders signed a concession agreement with the Ugandan government in Kampala last week and committed to revive the mines to the lost glory.

Thus, the Shs450 billion is part of the financial resources and technical expertise the consortium is expected to invest to ensure the restoration of the Kilembe Mines.

Under the agreement, the assets to be ceded to Tibet by KML include; its mining lease, exploration licences, the hydro-power station (Mubuku I), land, some core buildings and other physical assets as required to revive mining.

This, therefore, means that Tibet-Hima, which was given chance to run the Mines for 25 years, is expected to rehabilitate the assets, revive mining activities and carry out further exploration activities during the period.

The Uganda government is also to be paid an upfront fee of about Shs10.3 billion (about $4.03 million), an annual concession fee of Shs2.5 billion (about $ 1.005 million) and expand the copper reserves from the current 4.5 million tonnes through a comprehensive exploration programme.

Finance Minister Maria Kiwanuka who signed on behlaf of the government together with her Energy and Mineral Development counterpart, Irene Muloni hailed the development saying it was a major milestone.

Ms Kiwanuka said the intention of this long process sought to ensure that the best candidate and partners are selected for the benefit of the nation.

The consortium is also expected to upgrade the hydro-power station from the current 5MW to 12MW and to maximise value-addition through a beneficial process to allow production of end-user products such as electric copper wires for Uganda’s rural electrification programme and for export.

Ms Muloni urged the new managers of the Mines to create employment for Ugandans, train the local workforce and ensure technological transfer to benefit a wider Ugandan community.

Ms Kiwanuka asked the consortium to consider further investments in other core sectors of the economy.