The abandoned plant at the Kilembe Mines in Kasese District. The company is set to be revamped and sold off. Photo/FILE
What you need to know:
Divestiture Reform and Implementation Committee is set to clear five firms that had been short-listed for evaluation in order to pick a winner.
Kilembe’s divestiture had for years been uncertain as a litigant claiming interest in the firm sought to block the process.
Kilembe Copper Mines has among its assets a smelter, a five megawatt-hydro power plant and a lime factory.
The selling off of part of Uganda’s Kilembe Copper Mines and its possible revamping, which had been delayed, is back on track after the courts dismissed a case that had blocked the process.
This will now see the Divestiture Reform and Implementation Committee clear five firms that had been short-listed for evaluation in order to pick a winner.
“The committee met and is now ready to issue proposal documents to the prequalified bidders,” said Jim Mugunga, the Finance Ministry spokesman.
The shortlisted companies — Sino-Steel (China), Tibet-Hima Group (China), Konkola Copper Mines PLC (Zambia), Shree Minerals (Australia) and Gingko Energy Investments Co (China) — will now be required to submit detailed technical and financial proposals for final evaluation.
Kilembe’s divestiture had for years been uncertain as a litigant claiming interest in the firm sought to block the process.
Canaf Group, formerly Uganda Gold Mining, had sued Kilembe Copper Mines and the Attorney-General as it sort to stop the mining firm from being sold off.
Three-year contract
In 2005, the company entered into a three-year mineral exploration and feasibility study agreement with Kilembe Copper Mines, which would lead to Canaf acquiring a 70 per cent stake if the exploration site proved commercially viable.
The dispute started when Canaf’s request for a title to use in its bid to get financing was rejected. The firm took the matter to court, which then saw the Attorney General challenge the agreement and its legality.
The Attorney-General was never consulted prior to the signing of the agreement between Canaf and Kilembe Copper Mines, as required by Article 119(5) of the constitution.
With the standoff, Canaf filed another case to stop Kilembe Copper Mines from being privatised. Canaf argued that since Kilembe Copper Mines and the government had not reviewed the agreement, the contract remained legally binding.
But, Justice Christopher Madrama ruled against Canafa, saying their request would interfere with the government’s privatisation process “on the basis of a contract to which the government was not a party.”
President complains
Speaking at a recent National Resistance Movement party retreat in Kyankwanzi, President Yoweri Museveni complained of red tape, which could see a frustrated Chinese investor, eyeing the Kilembe Copper Mines, give up.
Kilembe Copper Mines has among its assets a smelter, a five megawatt-hydro power plant and a lime factory.
The company ceased mining and processing copper about two decades ago.
At the mining company’s inception in 1956, it confirmed about four million tonnes of ore with 1.98 tonnes of them being pure copper and 0.17 tonnes of cobalt.
Only 10 per cent of the company’s mining fields have been explored leaving the remaining 3,000 acres yet to be prospected.
Copper production in Uganda ceased in the late 1970s due to a combination of civil unrest, ageing equipment and falling world prices.
However, prices have recovered in recent years with the cost of a tonne of copper going for $6,000, making the business economically attractive once again.
