The revival of copper mining at Kilembe in the western Uganda district of Kasese is drawing closer, with the evaluation process of the four bids received at the Request for Proposal (RFP) stage, complete.
Chinese firms Liaoning Hongda (trading as Wagagai Mining), Gingko Energy, Sinomine Power China, and Sarrai Group from East and Southern Africa (the new majority shareholders of Hima Cement), were the four companies appraised.
Jervois Global, China Railway No. 10 and Mota-Engil did not take part in the final assessment after they did not submit their proposals before the December 16, 2023 deadline.
According to a Ministry of Energy and Mineral Development official, who preferred anonymity, post-evaluation visits to the companies’ premises to corroborate the content shared in their written proposals are planned, before the winning bid is announced.
A comprehensive post-evaluation due diligence is important, the official noted, to prevent a repeat of the setback from the previous concession owners, Tibet-Hima.
In 2013, Tibet-Hima, a Chinese consortium, was awarded a 25-year concession to revamp the Kilembe mines. However, this was terminated in 2017 after government accused the company of failure to fulfill most of its contractual obligations.
Tibet-Hima was said to have lacked the adequate capacity to revive Kilembe as it had claimed in its bid. Though a government team had visited China to assess the consortium’s capabilities before it was awarded the contract, some industry observers felt their assessment was not thorough enough.
Certain reports claimed Tibet-Hima’s troubles started after a more established copper industry player it had hoped to partner with in the Kilembe venture backed out.
Uganda is hoping that the winning bid this time around – expected to be announced before the end of the current financial year in June 2024 – is the real deal.
Opportunity
Canadian firm Falconbridge operated the Kilembe 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 on a care and maintenance basis.
More recently, the transition to green technology has become a key driver of future copper demand. Copper is essential in electric vehicles, renewable energy systems and other technologies in the shift away from fossil fuels.
Alex Kwatampora, a former project manager under Tibet-Hima and currently a geotechnical consultant at Mpora Geo-Tech, believes these copper prospects currently can make Kilembe influential in Uganda again as it was in its early years.
Kwatampora poses at a Kilembe mine
“This redevelopment is long overdue considering the vast potential. Granted I do have sentimental attachment to Kilembe seeing that my father dedicated his career to the company from 1957 to 1992 before I followed suit as a geologist in the 1990s and later served as a project manager there,” said Kwatampora, who also heads the Geological Society of Uganda (GSU).
It is estimated that there are 4.5 million tonnes of proven copper ore reserves at Kilembe, based on a cut-off grade of 1.77% – higher than the global standard of 0.6%.
2,000 acres of the mining lease remain unexplored.
The copper at Kilembe is associated with cobalt (another green energy mineral); with gold also said to be present in the ore. Kasese Cobalt Company Ltd (KCCL) has in the past exploited the cobalt stockpiles.
Whoever wins the bid is expected to verify the available data and carry out more exploration on the license. Kilembe has 621 sq km of exploration licenses that stretch from Kasese to the border with the Democratic Republic of Congo (DRC).
The new investor will also be expected to set up smelting and refining plants, with beneficiation a top priority of the Uganda government.
Apart from improving Uganda’s revenues and creating employment opportunities, Kwatampora hopes pending copper production at Kilembe will force the authorities to address the frequent floods in the area and also rehabilitate the dilapidated infrastructure including housing, roads, the railway and airstrip.
He also wants to see copper and cobalt from the neighboring DRC smelted and refined here once the plants are established.
Uganda is targeting to produce 2,000 metric tonnes of copper within five years, not only from Kilembe but from other prospective areas around the country that were captured during the airborne geophysical surveys.
