What you need to know:
- In a ruling delivered on September, 19, 2019, Justice David Wangutusi of the Commercial Division of the High Court ruled that Guangzhou Dongsong had acted illegally, directing the company to pay Fang Min $8m in damages.
Energy Minister Ruth Nankabirwa has said she wrote to President Museveni to intervene and save the multibillion dollar phosphate and fertiliser project in Osukuru, Tororo District.
Speaking during a tour of the plant in Osukuru sub country, Ms Nankabirwa said she had written to President Museveni, expressing the need to intervene in reviving the project that has now stalled for about two years.
“I initiated the need for the two presidents to talk. I feel bad about this plant [because] it was going to be a flagship project in the mineral sub-sector. It is one of the projects we had high hopes for,” she said, noting that if there is an alternative, the project owners should explore the possibility of seeking out another bank to complete the plant.
The project, owned by Guangzhou Dongsong Energy Group Uganda, has stalled due to lack of finances and a court battle that in 2019 resulted into a directive to compensate Ms Fang Min, a Kampala businesswoman over disputed mining rights.
In 2016, Ms Fang Min sued Guangzhou Dongsong and four others over illegal transfer of mining rights from Uganda Hui Neng Mining Limited.
In a ruling delivered on September, 19, 2019, Justice David Wangutusi of the Commercial Division of the High Court ruled that Guangzhou Dongsong had acted illegally, directing the company to pay Fang Min $8m in damages.
The court battle, in a 2019 letter to Guangzhou Dongsong, was cited as one of the reasons as to why the Industrial Commercial Bank of China would not go ahead with disbursing committed financing to a tune of $60m.
The bank, in the same letter, noted that the effect of Covid-19 had required that it lowers its overseas loan centralisation ratio and redistribute available resources.
The phosphate and fertiliser project, which was launched by President Museveni in 2018, was lauded as a key factor in achieving better agricultural yields .
During the tour, which also included visiting of gold mines in Busia, cement factories in Tororo and Pozzolana quarry sites in Kapchorwa, Minerals State Minister Peter Lokeris, said government was in a dilemma due to the predicament that the project has found itself in.
“Government has brought you here in good faith and it would be happy if all the things you promised to do were carried out, otherwise, we are in a dilemma,” he said.
A representative from Guangzhou Dongsong Energy Group Uganda only identified as Mr Liu also revealed that they had in October 2020, written to President Museveni, asking him to enlist the intervention of Mr Xi Jinping, in which the Chinese government would coordinate with the Industrial Commercial Bank of China to chart a way forward.
By press time, it was not immediately clear how far the President has intervened.
In January, Mr Changmin Lee, the Guangzhou Dongsong Energy Group Uganda deputy general manager, told Daily Monitor that the project had stalled, falling behind on a scheduled production of commercial fertilisers by almost two years.
The company, he said, was now stuck having spent a larger amount of obtained resources on geological exploration, land acquisition and construction of staff quarters, among others.