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Discussion Starter · #1 ·
Chinese take over kilembe mines
Publish Date: Jul 05, 2013

By Ibrahim Kasita

A consortium of Chinese companies has been awarded the concession to manage and operate the copper company - Kilembe Mines Limited, a finance ministry official said on thursday.

The consortium is to pay a signature fee of $4.3m (about sh11b) and an annual concession fee of $1m (about sh2.5b) to the Government
A consortium of Chinese companies has been awarded the concession to manage and operate Kilembe Mines Limited (KML).

For acquiring the concession, the consortium is to pay a signature fee amounting to $4.3m (about sh11b) to the Government. It will pay a concession fee of $1m (sh2.5b) annually. It is estimated that the mine still has 4.5 million tonnes of copper.

The Government will also benefit from statutory payments, including income tax and mining royalties, according to a statement issued by Jim Mugunga, the finance ministry and Privatisation Unit spokesman.

Mugunga said the Tibet Hima Industry Company Limited-led consortium emerged winner of an international open tender process to find an investor in KML.

The consortium is to commit over $135m towards the rehabilitation of the mine and upgrading Mobuku power plant to 12MW.

This decision brings an end to a long on and off privatisation process which started two decades ago. Mugunga said the Divestiture Reform Implementation Committee (DRIC), which is responsible for the privatisation process, had on Wednesday declared the Tibet Hima Industry Company Limited-led consortium winner after it emerged the best evaluated bidder.

Initially five companies which had sufficient technical and financial capacity were pre-qualified. They included Gingko Energy Investments Company of China, Sino- Steel Limited (China) Konkola Copper Mines (Zambia), Tibet-Hima Industries Consortium (China) and Shree Minerals of Australia.

Recently, another Chinese company was awarded the tender to construct the $1.6b Karuma power dam project.

KML was incorporated in Uganda in July 1950 by two private Canadian mining companies, Frosbisher Ltd and Ventures to mine copper, which is associated with cobalt in Kasese.

In 1962, the company was taken over by Falconbridge of Africa, which sold its shares to the state in 1975. But in 1982, mining stopped because inflation was eating up the profits in addition to insecurity.

The consortium is composed of Shanghai Baosteel Group, which is an iron and steel conglomerate with expertise in smelter technological supplies; Chinalco Luoyang Copper Company; Yunnan Copper Company with vast experiences in exploration expertise provision; and Dongfang Electric Corporation, whose expertise is in hydro-power technical and development equipment supplies.

It also includes Tebian Electric Apparatus, who are manufacturers of cables, cords and transformers; Zijin mining Group (mining and downstream beneficiation) as well as Zongshen Industry Group (mining financial investments).

What is driving copper prices up?

The KML deal comes amidst soaring prices of copper in the international market.

The prices have been driven largely by the high demand in Asia, that accounts for about 60% of the consumption. Asians like modern houses with western-style wiring and plumbing. They also like cars and electronic gadgets, thus needing copper. In 2005, China accounted for 22% of global copper consumption. In 2009, the figure was 39% and it is continuing to rise.

5,740 Posts
Discussion Starter · #2 ·
Leaders welcome Kilembe mines privatisation
Publish Date: Jul 13, 2013

By Wilson Asiimwe

Kasese district leaders have welcomed the hand over of Kilembe copper mines to Chinese investors, saying the move will help revamp the mines.

Godfrey Kabyanga, the municipality mayor said people will get work at the mines that have been lying idle for over 40 years.

He said the privatisation is timely as many of Uganda’s youth are unemployed.

He added that the council will now increase its revenue base from the royalties that will be earned from the mines company.

“The Government has done something good. We hope that our roads will now be repaired from the tax revenues to be got from the mines. This will boost the Council’s capacity to deliver necessary services,” Kabyanga said.

Lt. Col. Dura Mawa, the local government chairman said the local government had benefited a lot from companies such as Hima Cement and said that it will also benefit from the Chinese firm that has taken over Kilembe mines.

He said they will strive to ensure that there is a conducive environment for the investors to do their work.

He asked the Government to find more investors to take over other government factories that are lying idle like the Katwe salt factory.

“I ask the Government to find more investors who can take up other government-owned factories in the district such as Katwe salt factory which has been idle for over 30 years, so that people can get employment and benefit from them,” said Mawa said.

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How much copper is in this mine???

2,842 Posts
Copper production to resume at Kilembe by ISAAC KHISA

Copper mining at Uganda’s Kilembe mines will resume later this year after a Chinese concessionaire completes its rehabilitation.

The bulk of the work on refurbishment of the machinery, which has been in disuse for more than three decades, is complete and production of copper concentrate will begin in May.

Copper smelting will follow three months later after metallurgical testing and installation of a small-scale smelter, according to Alex Kwatampora, project manager of the concessionaire, Tibet Hima Industry Company Ltd.

“We are resuming production of concentrated copper to a purity of 28 per cent. We will then stockpile it as we look at setting up a small smelter unit to refine it close to 100 per cent between August and the end of the year,” Mr Kwatampora added.

The metallurgical tests are intended to establish the quality of the copper and associated products that can be produced in country. The concession agreement requires them to export only finished copper products such as electrical conductors.

Unlike the past when the concentrate was transported to a refinery in Jinja, more than 400km northeast of Kasese, the new smelting operations will take place in Kasese because the smaller scale and availability of electricity allow that.

The ultimate production target is 5,000 tonnes daily, but initial production will start at 1,500 tonnes, then double in 2016.

Tibet Hima, which has committed $175 million to the project, is also in talks with the government to acquire Kasese Cobalt Company Ltd, a firm established in 1992 to recover cobalt metals from an unstable stockpile of a cobalt-rich sulphide concentrate, and see if one of the units could be converted to smelt copper and other metals.

KCCL, said to be the only cobalt bioleaching plant in the world, was meant to remove the threat of acid water runoff and contamination of Lake George and Queen Elizabeth National Park from the mining areas, but ceased production although the bacteria used in the process are still in store.

The refurbishment of the machinery and the rehabilitation of major roads linking various mining areas in Kilembe started in August last year.

Mr Kwatampora said the firm has also completed work on geological mapping, geochemical surveys and is currently working on geophysical surveys to ascertain the quality and quantity of minerals in the area.

“The purpose of exploration is to expand the existing ore reserves to ensure that there is sustainability of the mining activity for the next 25 years,” Mr Kwatampora said.

Located 370km west of Kampala on the foot of the Rwenzori mountains, the Kilembe mines were closed in 1982 following a drop in prices for copper in the global markets. Prices have however bounced back, averaging $7,000 per tonne, driven mainly by demand from China.

According to the Uganda Investment Authority, Kilembe had 4.17 million tonnes of reserves, with a copper content of 1.77 per cent, and opportunities to discover additional resources in the vicinity of the mine.
There are 5.5 million tonnes of cobalt in tailings (dumped material from previous mining) at an average grade 0.114 per cent cobalt.
The East African
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