Plans to revive copper mining at Kilembe in western Uganda received a boost recently when representatives of the seven companies bidding for the company’s concessionaire rights visited the mines as they continue to prepare their proposals before the December 16, 2023 deadline.
The ongoing Request for Proposal (RFP) stage has Jervois Global, China Railway No. 10, Gingko Energy, Liaoning Hongda (trading as Wagagai Mining), Sinomine Power China, Mota-Engil Uganda, and Sarrai Group participating.
“The visit was successful, we wait for the outcome,” noted a Kilembe Mines Ltd (KML) official, who preferred anonymity because he is not authorized to speak for the company.
The bidders toured the mines, the Mubuku electricity generation plant, timber treatment plant, foundry and machine-shop plus other social infrastructure to get a feel of what kind of investment would be required to make the mines operational again, 40 years since production of copper stopped.
Canadian firm Falconbridge operated the mines in addition to a copper smelting plant in Jinja from 1956 to 1975 before it relinquished ownership to the state.
Following a combination of depressed world copper prices and inflation that eroded profits, mining ceased in 1982. Since then, Kilembe has operated under a care and maintenance basis.
Over the years, much of the infrastructure and equipment have become dilapidated due to neglect and flooding as a result of River Nyamwamba bursting its banks.
A representative of one of the bidders who also preferred anonymity in order to speak freely noted that the high costs needed to refurbish the infrastructure, including roads and buildings like office blocks, residential houses, schools and health centres, may prove prohibitive.
In 2013, Uganda’s government awarded Tibet-Hima, a Chinese consortium, a 25-year concession to revamp the mines. However, the concession was terminated in 2017 after the firm failed to fulfill most of its contractual obligations.
After the bidders hand in their proposals by December 16, the government is expected to announce the winning bid before the end of the current financial year in June 2024.
KML is jointly owned by the Government of Uganda (99.99%) and the estate of the late Rukiidi III, the Omukama of Tooro Kingdom (0.005%).