www.ucmp.ug The Uganda Chamber of MINESMINES && PETROLEUMPETROLEUM Issue: 16 October, 2016
Development Minerals in the Spotlight
Tororo, Uganda’s Minerals Destination
GE enters Uganda as oil sector reawakens
Uganda Marble “competes with the best in the world DAO MARBLE LEADS VALUE ADDITION” DRIVE 2 The Uganda Chamber of Mines & Petroleum The Uganda Chamber of Mines & Petroleum 3 UCMP COUNCIL MEMBERS
Hon Elly Karuhanga, Adewale Fayemi, ChairmanCHAMBER COUNCIL COUNCIL
Partner – Kampala General Manager, Total E&P, Associated Advocates and Uganda Chairman dfcu bank, Nile Breweries, BAT and other companies
Hon Richard Kaijuka, Kellen Kayonga, Vice Chairman COUNCIL
Chairman, EA Gold & Africa Managing Director, of Askar Gold Refinery Security Services
Paul Sherwen Jimmy Mugerwa, General Secretary COUNCIL
Tullow, Uganda Country Manager
Jeff Baitwa Irene Nakalyango Treasurer COUNCIL
Director ThreeWays Shipping CEO, UCMP Services [Group] Ltd
Xiao Zong Wei COUNCIL
CNOOC, Uganda, President Xiao Zong Wei
44 TheThe UgandaUganda ChamberChamber ofof MinesMines && PetroleumPetroleum UCMP COUNCIL MEMBERS ADVISORS
Gordon Sentiba Herman Kasekende ADVISOR ADVISOR
Astor Finance Plc Standard Chartered Bank, Managing Director
Joshua Tuhumwire ADVISOR
Mining consultant, Gondwana Geoscience Denis Kusaasira, Consulting Ltd. Also former ADVISOR Commissioner of the Uganda Department of ABMAK Geological Survey & Mines Managing Partner
Igor Markov ADVISOR
Semliki Rift Trading
Sam Thakkar ADVISOR
Gerald Mukyenga UHY Thakkar & Associates ADVISOR Certified Public Accountants Multilines International CEO
Daniel Pettersson, Patrick Mweheire, ADVISOR ADVISOR Hima Cement, Stanbic Bank Uganda, MD Country Manager
TheThe Uganda Uganda Chamber Chamber of of Mines Mines & &Petroleum Petroleum 5 5 We can do it
ost of what we do is routine. Our daily tasks – whether personal or profession- al – are largely executed automatically; allowing the familiarity of the regular Msteps to guide us daily. But is this enough? Will the ‘routine’ transform Uganda’s potential overnight into this exotic paradise that we all dream about?
Definitely not!
In its simplest description, the Uganda Chamber of Mines and Petroleum’s (UCMP) man- date is more or less the same as that of the Ministry of Energy and Minerals Develop- ment, and by extension the Government of Uganda’s. As a not-for-profit, non-govern- mental organization representing the interests of the private sector in Uganda’s mining and petroleum sectors the UCMP is constantly collaborating with the state to develop the country’s extractive sector.
Constantly rallying current and prospective investors towards exploiting the country’s mineral wealth and in so doing, turn this potential into unbridled success, is simply what the UCMP is about. This is of course no different from the Ministry’s or the State’s obliga- tion.
The Mineral Wealth Conference (MWC), now in its 5th year, is one such platform within which the UCMP performs its aforementioned roles; and over the years, has enjoyed enormous support from the Government of Uganda. Every October, key decision makers including state officials, mining investors, business leaders, bankers and academics from all over the world gather under one roof to deliberate on one key thing – how to turn Uganda’s potential into tangible success.
As such, the MWC usually serves as a platform for the public and private sectors to brain- storm and identify the bottlenecks that could be holding us back from scaling the heights. Indeed, a lot of hurdles have been done away with as a result of these deliberations, like the scrapping of VAT on exploration, which lifted a very huge weight off every investor’s shoulders.
However, these interventions should be less, a result of years of negotiations but more regular and incisive, if Uganda’s dreams are to become valid. Like earlier noted, our goals, together with those of the state, intertwine. There should never be room for suspicion or doubt but rather mutual trust.
To achieve this mindset though, the routine must no longer be welcome. It is should now, more than ever, be Business Unusual.
Important to remember, is that when we have bothered to, we have moved mountains. There are numerous success stories in Uganda and across Africa that demonstrates that it is possible to achieve great things overnight, when the mindset is right.
We can do it. Chairman’s Note Chairman’s
6 The Uganda Chamber of Mines & Petroleum Talk to us about your mining ambitions
Our deep specialisation in natural resources, together with our connectivity to investor bases in the Americas, Europe and China, allows us to drive investment in Uganda and the region. With our highly skilled and experienced team of mining and financial professionals, and our local knowledge, we lead both traditional and non-traditional investment into resources. Let us be your partner for growth.
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Corporate and Investment Banking
The Uganda Chamber of Mines & Petroleum 7 content
AU PLANS12 NEW STRATEGY FOR AFRICA’S MINERALS
“Uganda Marble competes with the best in the world” 16
8 The Uganda Chamber of Mines & Petroleum content
Women miners in Uganda prepare Hima Cement for takeoff in $40m expansion 52 drive EnviroServ’s Modern Waste Facility To Serve 20 Region 34 Acknowledgements Layout and Design: Editorial to the editorial team assisted Moses L. Katumba Deep Earth International Ltd. by Richard Kaijuka. ([email protected]) ([email protected]) **This publication may be copied in whole or in part for any purpose, provided full credit as to source is given with the reproduction and that none of the material is incorporated into a document for which a copyright is sought.
The Uganda Chamber of Mines & Petroleum 9 GE Gives Uganda Oil Seal of Approval
Q&A 31
Formalisation Hima Cement FREE ZONES TO of Artisanal in $40m INCREASE Mining is expansion UGANDA’S COMPETITIVENESS Urgent drive 45 20 38 State Body Uganda’s oil sector to Support back on course Beneficiation 39
27
10 The Uganda Chamber of Mines & Petroleum Sponsors
Auc-Platinum. African Trade Insurance Agency-Sponsor. Agr-Gold. Aon-Bronze.
Barclays-Gold. Bronze Deloitte-Sponsor. Enviroserv-Sponsor.
Ernst & Young-Sponsor.
Frontier Resources Group-Sponsor. Gdf-Bronze. Hima-Silver.
Pwc-Bronze. Ssaka Transporters-Sponsors. Stanbic Bank-Silver.
Tororo Cement-Bronze.
African Trade Insurance Agency-Sponsor Undp-Silver.
Exhibitors
Undp-Silver. Toyota. Lets Go Travel. East Africa Chains.
Tororo Cement-Bronze. Dgsm_klein. Victoria Motors. Farm Enginnering.
Housing-Finance. Enviroserv-Sponsor. Spectrometer-Tech Bakawa.
Adt Africa. Ea Geological Services Geo Point. Stanbic Bank-Silver.
Barclays-Gold. Bronze (2). Agr-Gold. Aon-Bronze.
Hima-Silver.
The Uganda Chamber of Mines & Petroleum 11 AU PLANS NEW STRATEGY FOR AFRICA’S MINERALS
He also called for proper engagement with the African Private Sector and all the stakeholders along the value chains. He urged participants to work together in or- der to be at the centre of the boom that will be created by Africa’s own demand of manufactured and industrial products as Africa works its way up the ladder of social and economic structural transfor- mation of economies. Earlier, Mr. Jean Malic Kalima the Chair- man of Rwanda Mining Association (RMA), pointed out that Rwanda like most of other African countries was en- dowed with minerals. He said mining ac- tivities were being carried out by govern- ment until 2006 when the mining sector was privatized leading to the formation of RMA in 2012 to facilitate smooth transi- tion of mining business to entirely private business companies and cooperatives. The challenges that faced by the Rwan- AUC’s Mugyenyi (L) flanked by Rwanda Mining Association’s Kalima da sector included mineral price fluc- tuations, low technical capacities of the he African Union (AU) has said there “The thousands of young Africa men and main actors and limited access to finance, Tis a need to devise an urgent conti- women migrants and thousands of them said Kalima. RMA was now establishing a nental strategy to optimally use Africa’s perishing in the Mediterranean Sea try- strong collaborative framework among resources to the advantage and benefit ing to cross to where they think they can the private sector players, relevant gov- of Africa and Africans. find decent jobs, are not political asylum ernment institutions, and other associa- seekers but economic migrants. What tions for the purpose of value addition. Meeting for two days in Kigali, Rwanda, can we do about this?” he asked. the African Union Commission (AUC) Going forward five regional associations and the African Minerals Development “The answer is not simple but a must; – Southern, Eastern, Central, West and Center consulted the Private Sector on Africa is re-writing its history and - shift North Africa – will participate in setting the Africa Mining Vision (AMV) initiative ing the paradigm of development. Africa up one organised and effective continen- under the theme: “Leveraging the role of is writing its own narrative for develop- tal body. Chambers of Mines and Mining Associa- ment embedded in, social and economic tion in the implementation of the Africa structural transformation, underlined by Hon Richard H. Kaijuka, the Vice Presi- Mining Vision”. industrialization that leads to ‘inclusive dent of the Uganda Chamber of Mines growth and sustainable economic devel- and Petroleum (UCMP), will head an The objective of the meeting was to opment’ as articulated in Agenda 2063,” interim committee to spearhead the have a frank discussion and contribution Mugyenyi noted. formation of an association of mining amongst Private Sector and leaders from industry players in the Eastern Africa re- Chambers of Mines from East and Central gion; that will identify and bring up this African countries on how to implement region’s key mining issues for discussion the AMV. “Africa is writing its own at the next engagement. In 2009, the African Heads of State and narrative for development 11 countries form the Eastern Africa Governments adopted the AMV as a Con- block, namely; Uganda, Kenya, Tanzania, tinental Policy Framework with the long- embedded in, social Rwanda, Burundi, South Sudan, Republic term goal of attaining “transparent, equi- of Sudan, Ethiopia, Eritrea, Djibouti and table and optimal exploitation of mineral and economic structural Somalia. resources to underpin broad-based sus- transformation, underlined tainable growth and socio-economic de- In the meantime, Mali hosted the West velopment.” by industrialization” African version of the same meeting in September. In his keynote speech on behalf of H.E. Mrs. Fatima Haram Acyl, the Commis- The AMV emphasizes the transforma- sioner for Trade and Industry, Mr. Frank Accordingly, a global Strategy to opti- tive role played by the mineral resource Mugyenyi, Senior Industry Advisor for mally use Africa’s resources that benefit sector in the development milestones of the Department of Trade and Industry of all Africans is urgently needed for Africa. African countries. The AMV compact tar- gets mining companies including oil and the AUC, pointed out that the common “Africa cannot afford to have it wrong this refrains “remarkable economic growth gas, Chambers of Mines and other min- time around, there is no room for error eral sectors and it is based on principles rates” and “The rising Africa” did not and this can only be achieved through translate into job creation and poverty that can be aligned with corporate core broadening partnerships and bringing values, policies, strategic plans and mis- reduction and now with the falling com- the private sector on board in policy plan- modity prices, Africa is at its crossroads. sion statements of companies in the ex- ning and implementation,” emphasized. tractive sector.
12 The Uganda Chamber of Mines & Petroleum UNDP, EU, throw the spotlight on ‘Development Minerals’
Stakeholders conduct a site visit at Mbalala Stone Quarry, Mukono District
The ACP-EU Development Minerals Programme is a three-year, €13.1 million capacity building program that aims to build the profile, and improve the management, of Development Minerals. Development Minerals are minerals and materials that have a high degree of economic linkage close to the location where the commodity is mined, that is, they are mined for domestic use. Development Minerals include industrial minerals (such as barite, bentonite and calcium carbonate), construction materials (such as sand, cement and aggregate), dimension stones (such as marble and granite), and semi-precious stones (such as amythyst, garnet, beryl and tourmaline). The program is an initiative of the African, Caribbean and Pacific (ACP) Group of States, financed by the European Union andthe United Nations Development Programme (UNDP), and implemented by UNDP. Below,UNDP Uganda, Country Director, Ms Almaz Gebru, shares more detail on this initiative:
What informed the creation of the ACP- the challenges faced by this mining commonly occurs in an uncertain legal EU Development Minerals Programme? sector. and regulatory environment, with a lack of publicly available and easily accessible From toothpaste to paints, and buildings In comparison to the metals sector geological data, which exacerbates to plates, Development Minerals are (where commodities are mainly extracted wasteful exploration and discourages intrinsic to everyday life. They provide for export), Development Minerals have investment in the sector. crucial inputs for the infrastructure, closer links with the local economy, and manufacturing, construction and have the potential to generate more local The oversight of environmental, agriculture sectors of the economy jobs, with a greater impact on poverty social, health and safety issues is often and have the potential to be high value reduction. This is partly because the inadequate, and weak or often non- in terms of national development. sector is dominated by small and medium existent technical extension services such Development Minerals have, however, scale domestic businesses. However, as skills training, capacity building, access received inadequate attention for there are a number of environmental, to technology, finance, appropriate their potential to impact livelihoods social and economic challenges equipment, investment information and (both positive and negative) and few confronting the sector. Small-scale mining markets, has contributed to the sector’s development initiatives have addressed and quarrying of Development Minerals neglect.
The Uganda Chamber of Mines & Petroleum 13 The ACP-EU Development Minerals This economic growth, the infrastructure accruing to government, compromised Programme was created to build the boom and rapid urbanisation has also health and safety of the miners and capacity of the small-scale private spurred demand for construction surrounding communities and adverse mining and quarrying sector, government materials, dimension stones, industrial immediate and long-term effects on the and civil society to ensure the sector minerals and semi-precious stones. environment. contributes to sustainable and inclusive For instance, the construction industry development. contributes over 12% of Uganda’s gross It is envisioned that the impact of the domestic product (GDP) and conservative programme will be widespread, providing The programme is implemented at estimates indicate that more than 1 transformative change in the lives of regional and country levels. At the million people in Uganda are engaged in thousands of small scale miners and regional level, the programme conducts this sector, with women making up more quarry workers, local communities and capacity building activities with than 25% of the work force. small businesses. Furthermore, through participants from forty ACP countries the capacity building interventions, through regional training workshops, In Uganda, the Development Minerals the productivity, competitiveness and field trips, the production of guidance sector is constrained by a number of investment profile of the Development products and knowledge exchange. environmental, social and economic Minerals sector will be greatly enhanced The programme will also host a final challenges, but with greater attention, through cross-sectoral linkages and value conference to enhance the knowledge policy support and regulatory oversight, addition. sharing activities conducted during the the sector could play a key role in driving programme. Participants of our regional Uganda’s inclusive growth agenda. Observers have always noted that training workshops implement the skills Technical extension services such as recommendations from such initiatives and knowledge that they have gained skills training, capacity building, access often remain on paper and are never from the training through return to work to technology, finance, appropriate actually implemented. Why should it be plans. equipment, investment information and different this time? market analysis are needed. The historical At the country level, in depth capacity neglect of the sector has contributed The ACP-EU Development Minerals building is undertaken with six focus to economic, environmental and social Programme is a capacity building countries: Cameroon (Central Africa); consequences including low revenues programme. The aim is not to provide Guinea - Conakry (West Africa); Uganda recommendations or advice, but to (East Africa); Zambia (Southern Africa); instead support people involved in Jamaica (Caribbean); and Fiji (Pacific). the sector with skills, networks, and Country-level activities include: training; In comparison knowledge. small grants; the production of maps and databases; development of regulations to the metals For example, the training delivered under on environment, health and safety; the programme is directly linked with the organization of community dialogues, sector – where workplaces and lives of each participant. technology fairs and networking events, Training participants develop a Return such as this Mineral Wealth Conference. commodities are to Work Plan during training events to implement in the months following What is the situation in Uganda that the mainly extracted the training. Formalization, through programme is trying to address? What is registration and formation of associations the expected impact once the program for export –, by the artisanal and small scale miners, in comes to an end? the Development Minerals sector, will be Development key to ensuring that the skills generated Uganda has a favourable investment by the programme continue to be shared. climate that accommodates all facets of Minerals have capital investment. The country is also Furthermore, Uganda is one of the endowed with mineral resources, but closer links with six focus countries of the programme. most people focus on the metal sector. The activities that will be undertaken While commodity prices have been in in Uganda have been collaboratively decline for globally traded metals, prices the local economy, designed with government, private of Development Minerals, like sand, sector and civil society stakeholders and concrete and aggregates, have remained and have the informed by field visits and a national stable. potential to consultation workshop. High economic growth in emerging How much support is the program economies is usually followed by demand generate more getting from Uganda’s Ministry of Energy for housing and consumption goods and & Minerals Development? Uganda has not been an exception. For local jobs, with a instance, during the year ending June The government of Uganda took 2015, Uganda’s economy grew by 5%, greater impact on the lead in identifying the need for compared to 4.5% of the previous year. the implementation of the ACP-EU Uganda’s construction industry has poverty reduction Development Minerals Programme experienced rapid growth and this has as a result of the pertinent challenges increased the demand for construction confronting the Development Minerals materials and related services. sector in Uganda. They approached like- minded partners such as ACP Group
14 The Uganda Chamber of Mines & Petroleum of States, UNDP and the EU to jointly miners and quarry workers in health address the challenges. Thus, from and safety, efficient technologies and inception, the programme has been a environmentally sustainable mining. Ugandan-led effort that is aligned with While Feedback from stakeholders indicates Uganda’s development targets and that existing information about the priorities especially as reflected in the commodity sector is either out-dated or scant and second National Development Plan. has limited access for investors and prices have been other stakeholders. The programme has The Government of Uganda is undertaking initiated an extensive baseline survey several policy, legal and regulatory in decline for to generate accurate information on interventions aimed addressing the the location of Development Minerals sectoral challenges and unlocking the globally traded deposits/reserves and actors involved in potential of the sector. Additionally, the this sector in Uganda. It is expected that Government has prioritized development metals, prices this will be another vital contribution to of geological surveys, formulation of the mining sector since interested parties the mineral development master plan of Development will have access to accurate, up-to-date containing the Country Mining Vision and information that would not only bolster construction of supportive infrastructure Minerals, like investment into the sector, but also for the mining sector. The Ministry inform government strategic planning of Energy & Minerals Development, and monitoring functions. through its Directorate of Geological sand, concrete and Surveys and Mines is directly involved in Beyond the mining sector, the programme the implementation of this programme aggregates, have will benefit the wider socioeconomic and has availed extensive support to the development of the country through programme through technical and other remained stable. contribution to increased household logistical support. incomes that will augment access to neglected. Part of the work done so health, education and other social and How else will the program impact far has been to ensure that the issues human development services. The Uganda’s mining sector and the general pertinent to the Development Minerals programme will facilitate formalisation socioeconomic development of the sector are reflected in the new Mining of small-scale mining associations and country? and Minerals Policy of 2016. The aim the establishment of linkages to other is to ensure that while the laws and cross-sectoral ventures that include As highlighted, the programme is an policies are right, practice is also aligned. service provision, value chain integration extensive multi-faceted effort to address In addition, extensive training and and other complimentary economic and the Development Minerals sector in support will be provided for small scale social activities. Uganda that has to date been largely
Nairobi Office: Mwanzo House Dunga Close, P. O. Box 42754, 00100 Nairobi. Tel: 6531376-7-8-9 Fax: 6535608/9 Email: [email protected] Kampala Office: Plot 3, 2nd Street Industrial Area P. O. Box 3209 Kampala, Tel/Fax: 0414 257028/9, 0414 258837. Email: [email protected] THE NAME THAT Mombasa Office: Jomo Kenyatta Avenue. P. O. Box 85954, 80100 Mombasa. Tel: 2491246 / 2492785 Fax: 2490325. Email: [email protected] CARRIES WEIGHT
C O N V E Y O R B E L T S Europe Gummilabor
P R E C I S I O N . P O W E R . P E R F O R M A N C E . VLIFTING EQUIPMENTI .
MORE than Chains
The Uganda Chamber of Mines & Petroleum 15 “Uganda Marble competes with the best in the world”
DAO CEO, Mr. Mohammed Aoun
ganda is on the verge of becoming Subsequent tests of the marble samples another $5m lined up in Phase II. The one of the main producers of in USA, India, China and Italy, revealed plant employs just over 40 workers but Umarble in Africa and the world that it was genuine true, non-porous the number will have grown to 100 by the thanks to DAO Marble Ltd. From its marble. close of the year (with over 90% of the quarries in Moroto, DAO Marble is workers Ugandan). now mining raw marble blocks while This encouraged us to set up a complete processing polished slabs and tiles at its marble manufacturing facility in Uganda At the moment we are producing slabs newly established plant in Kampala at as a priority over the cement project and tiles of different sizes. In the next Kinawataka, Mbuya. Mr Mohammed (which remains in the pipeline). phase we will also have mosaic in addition to calcium carbonate, agriculture Aoun, CEO and Chairman, of DAO The deposit is big enough to support Marble shares the company’s story so far dolomite and whitening material which this business for the next 25 years at can be used for paints and undercoating. with the a magazine: the maximum production rate of about What is DAO Mable’s story in Uganda so 50,000 tonnes per year. What informed the decision to have far? the plant in Kampala not at the mineral DAO Marble has invested about $12m source in Karamoja? In 2012, in a meeting with HE President dollars so far; and there an additional Yoweri Museveni about investing in $40m lined up for expansion in the next Our initial plan was to have the factory in Uganda, a few projects were considered 2 years. Moroto, Karamoja but the infrastructural bottlenecks could not allow us, hence including power, a refinery and cement From initially exporting dimension production. We finally settled on cement the relocation to Kampala. Poor road stones, you are now producing slabs conditions can mean losing up to three and our technical team embarked on and tiles at your Kampala factory. How prospecting for limestone suitable for days on the road after a heavy downpour big is this investment and what are the during the rainy season. Also, this industry the process. After a thorough and costly expansion plans? exploration, however, the geologists is heavily dependent on constant power encountered this beautiful, true marble As I noted, we have so far invested supply, yet Moroto lacks power. Presently that was of the highest quality and grade about $12m in total towards the entire we are using our own diesel generators with unique characteristics. project and something in the range of to produce energy for the quarrying and $4.6M towards the processing plant mining operations – a very expensive in Kinawataka, Mbuya – Kampala with alternative.
16 The Uganda Chamber of Mines & Petroleum Another drawback is the lack of spare world. parts or the inability to quickly restore a faulty machine or system breakdown. Finished products from Uganda are It may take 3 to 4 days to get a problem often derided for lacking ‘international fixed in Moroto versus about 2 –8 standards’, how are you competing the hours to a get a similar problem fixed in global market? Kampala. Indeed in the stone business, Africa Having said that, DAO has invested is not yet classified in the minds of heavily in our Karamoja operations where natural marble clients internationally. 90% of our workforce is local. We have To ensure we compete strongly, our first also provided 20 scholarships to local class marble is polished with the same kids and have sponsored the Moroto machinery as is used in Italy and Europe; football team, the Shepherd Warriors. hence the finished product is as superior Importantly, we are spending up to in quality standards. $100,000 on procurement of spares, How do the DAO products compete electrical parts, food among others in with those already on the local Uganda Moroto on a monthly basis – a sizeable market– in terms of quality and price? contribution to the local economy. There is a current challenge of cheap How has the market responded to your product from China, Vietnam and India product? that is dumped on the Ugandan market. The market response can be summarised China for instance subsidizes its electricity in one word – encouraging. Whoever to as low as $2 cents per kilowatt, gets a feel of our material loves it and making it tough for a Ugandan company places an order. This is a product that – spending $12 cents per kilowatt – to is liked; beauty and quality-wise DAO’s marble compares with the world’s best from Italy. Notable local customers so far include Having heard of our Serena Hotel (expansion phase), Golf Course Apartments, the new airport, a progress and the market new Imperial Royale hotel in Entebbe and Sudhir Ruparelia’s new offices. response through the Having heard of our progress and the market response through the media, media, we are proud we are proud that President Museveni compete fairly. This is in addition to the has asked that our product is installed that President Museveni heavy taxes on diesel that the Ugandan at the State House. Hopefully, he will firm has to pay – almost 100%. market us to his guests and we get more has asked that our prod- So it’s imperative that the government international orders. uct is installed at the introduces some kind of protection for Before we invested in a plant, we this new industry that is 100% Ugandan. exhibited in Italy, USA, Europe and China State House. Hopefully, Instead of traders importing a low and the overwhelming reviews we got inferior quality type of tiles and pay there informed the factory decision. he will market us to his very little duties, why not protect this new high quality natural marble product With the positive response from the guests and we get more from Uganda’s world class deposit? This market, we have no doubt that within would help this infant the industry grow, a few years, DAO Marble will be one of international orders. expand and employ Ugandans besides the top natural-stone companies in the the huge export earnings.
The Uganda Chamber of Mines & Petroleum 17 The sugar and rice import tax is very The President has indeed supported serious – 100% import tax; we need this cause and we take this opportunity something similar in our industry for to thank him for the time and help this business to flourish. Currently he has granted the company so far! 80%-90% of the market is flooded with We are pleased to announce that in cheap inferior tiles. addition to the marble project, DAO have also introduced a new product Tough government intervention that called agriculture dolomite. With the results in stringent import laws, will Ugandan economy heavily agro-based; see us grow our investment from $12m we expect this product to go big. to $52m to meet worldwide demand and make the industry one of the top The President can look at DAO as a produce and export businesses in success story. Probably this is why he Uganda. wants our product in State House to show his visitors. The Moroto local We have so far written to the state and leadership and the Ministry of Energy expressed our concerns and sought and Mineral Development are all trying support and protection but we haven’t to help now. One local leader described gotten a response. We hope the state DAO as the one bird in the hand that intervenes soon as it would also benefit needed all the best attention there is. greatly from the foreign exchange we He has a point if the President’s value bring in addition dream is to be fulfilled. Would DAO meet the demand if The local product needs to be protected government restricted the imports? from cheap competing imports for the Absolutely! The plant produces 25,000 value addition vision to come true. square metres a month (approx Brazil, USA, Australia protect their local 240,000 annually) which we will double products, why not here? in the next phase. Uganda imports The advice we can give to anyone about 200,000 sqmtrs annually at investing in this industry is that the moment; hence even before we patience and perseverance must be expand, we could have an excess of key ingredients in anything they do. 40,000 sq mtrs if we were to become It’s now four and a half tough years exclusive suppliers. of DAO’s presence in Uganda, and we We are also very competitive on price continue investing despite being ages as well, with our pure, first class marble away from breaking even. trading at $30 per sqmtr, just $7-9 above the inferior porcelain tiles (sold at approx $23 per sq mtr), despite all the challenges mentioned above. Currently, those importing the pure marble, that matches ours in quality, have to part with about $60 to $100 per sqmtr. So if the government was to give us UCMP boss Karuhanga and Katto of concessions on electricity and diesel for DGSM lead officials on a tour of the DAO instance while imposing a significant Marble plant in Kampala recently import tax on competing foreign products, our price would drop as well. Why should a Ugandan use marble instead of the cheaper alternatives? Whereas you would need an extra $7 to purchase natural marble compared to say, porcelain, it would be a worthwhile expenditure, since marble is of superior quality. Porcelain breaks and chips away hence it will need replacing every 2 to 3 years whereas marble is durable and you don’t have to replace it once installed. We have tried to make our product affordable and are delivering more or less better quality at a fraction of the price. President Museveni has been at the forefront of advocating for value addition on Uganda’s minerals. How does this DAO plant help this value addition narrative?
18 The Uganda Chamber of Mines & Petroleum Uganda targets $50m to $100m for Minerals Exploration ganda is well endowed with mineral resources and like many naturally Ugifted African countries, is becoming very keen in ensuring that these resources play a transformative role in its long term structural transformation dream – Vision 2040. This is also in line with the African Union 50 year vision Agenda 2063 as well as the global Agenda 2030 that highlights key Sustainable Development Goals (SDGs). The African Mining Vision stresses that revenues from minerals should be used for development. It also seeks to demystify the “Curse Paradox” that is often associated with the mineral-rich African countries where, upon their discovery, tension and conflicts are often expected to emerge instead of development. The only assured path to optimize value from the mineral resources is to attract responsible investments into the sector that lead to value addition and industrialization. In order to attract responsible investments, it is important that a country is knowledgeable of its mineral wealth. This can be achieved through a comprehensive country exploration programme that involves both the private By Hon Richard H. Kaijuka and public sector investments. Context The Uganda Mineral Exploration Initiative (UMEXI) is a private sector led initiative that will drive this minerals’ exploration campaign in Uganda. To operate like a Public-Private Partnership (PPP), UMEXI will be steered by In order the Uganda Chamber of Mines and Petroleum (UCMP), with support from the African Union Commission. It will be based on critical success experiences of countries such as Brazil and to attract Australia. The initiative will also benefit from the expertise of development institutions like the World Bank, African Minerals and Geoscience Centre (AMGC – formerly SEAMIC, of which Uganda is a member) as well as the African responsible Union’s African Minerals Development Centre (AMDC). A full proposal will be presented at the Mineral Wealth Conference that takes investments, place on October 5th and 6th, at the Serena Hotel in Kampala. Subsequently, it is hoped that the success of UMEXI will trigger the development it is important of a regional exploration programme. Implementation that a country is The execution of UMEXI will be based on a PPP model that is already being realized in other African countries such as the West African Exploration Initiative knowledgeable (WAXI). It will require the collaboration of the government and the private sector, including mining companies and other institutions that are involved in of its mineral geological data and information gathering to ensure a countrywide exploration of Uganda’s mineral wealth is completed successfully. It is envisaged that UMEXI will mobilize about $50 to $100m in the medium wealth term for this comprehensive effort. The writer is the Vice President of the Uganda Chamber of Mines and Petroleum and a former Energy Minister
The Uganda Chamber of Mines & Petroleum 19 Hima Cement in $40m expansion drive
Daniel Patterson, Country CEO, Sheila Byenkya, project manager, Part of the plant equipment grinding station Hima Cement
ima Cement is to build a grinding station producer of building solutions providing its customers in Tororo, with the company announcing it with innovative value adding propositions,” Pettersson will spend $40 million on the investment. added. On completion, the station, which will be H He added: “Hima Cement is committed to ensuring constructed at Nyakesi, Rubongi will boost Hima’s sufficient cement capacity to serve the national production by an addition c1 million tonnes. infrastructure and construction projects, individuals and In total, the investment at Tororo will bring Hima’s cement the commercial sector. As a result, we are embarking production capacity at c1.9 million tonnes. on several capacity building projects starting with the construction of a Grinding Station at the end of 2016.” In a statement, Hima Cement, Country CEO, Daniel Pettersson, said that the aim of building the grinding Recently, Hima Cement signed a Memorandum of station is “to meet the increasing demand for cement and Understanding (MoU) with Guangzhou Dongsong Energy concrete not only within Uganda but the regional market Group Company for the supply of 40,000 tonnes of cement. as well.” Guangzhou Dongsong is executing the $620 Sukulu Phosphates Comprehensive Industrial Development Construction of the station is expected to start at the end of Project in Tororo, Eastern Uganda. 2016. Uganda is currently undertaking huge infrastructure projects, such as the standard gauge railway, power plants Pettersson also noted that Hima Cement was in the final at Karuma and Isimba, plus the Entebbe expressway. All stages of exploration for a limestone position in North East these require huge supplies of cement, on top of the real Uganda to support a future clinker position. estate boom. As a result, the construction industry in “Lastly we are launching a RMX (ready mix concrete) Uganda has grown at an average of 10%, offering a strong operation in Kigali next month to be followed by further market potential for Hima Cement. aggregates and RMX operations in Uganda and Rwanda in “We are very positive about the long-term prospects of the near future,” he added. the cement industry in Uganda; and LafargeHolcim is keen to solidify its position in the region as the leading
20 The Uganda Chamber of Mines & Petroleum he Sukulu Phosphates Comprehensive Industrial Develop- ment Project is taking shape, although with some challeng- Tes. In 2014, government awarded a mining lease to Guang- zhou Dongsong Energy Group Company Ltd to mine and process $620m Sukulu phosphates into fertilizers, among others. The project cost is es- timated at $620m. Leo Chueng, the deputy finance manager at Guangzhou Dong- song, says the company is on course in implementing the project, with a lot of technical and ground works carried out in the last 3 phosphates years. He explains that so far, the company has completed the techical designs and acquired technology licences to enable the sepera- tion of phosphorous from the iron ore, and produce steel prod- project takes ucts and phosphate fertilizers. The exploration conducted by Yunnan Geology Investigation Bu- reau revealed that the mineral deposits, which are mainly distrib- uted in the three valleys, include 216.93 million tonnes of min- eral reserves, where phosphates alone in form of apatite were shape estimated at 62.45 million tonnes at an average grade of 11.31% P2O5; iron ore estimated at 61.77 million tonnes at 30.12%, Nio-
The Uganda Chamber of Mines & Petroleum 21 He said the investor opted for 99 years to avoid the headache of renewal that comes with a shorter period. However, the lease would automatically terminate if the mining lease (21 years) is terminated or not renewed. So far, 124 land owners have been com- pensated and have since moved else- where. A total of 4,800 people are likely to be affected by the project in 14 villages covering 26.5 square kilometers in the sub counties of Rubongi and Osukuru in Tororo district. IGG Hurdle However, the project faces uncertain times after a recent Inspectorate- Gen eral of Government (IGG) investigation bium pentoxide (Nb2O5) estimated at impediments. recommended the cancelation of Guang- 429,800 tonnes; and the Rare Earth Ele- zhou Dongsong’s exploration license and ments estimated at 890,600 tonnes. The project is expected to generate more by extension its mining lease, citing -ir than 1,200 direct jobs mainly for Ugan- regularities in its acquisition. The mining area has a mining capacity of dans, Xu adds. 1 million tons of ore per annum for over On this, Kusaasira notes that the compa- 38 years but cold extend beyond this if Recently, Hima Cement signed a Memo- ny was not afforded the right to be heard reserves are increased by new technol- randum of Understanding (MoU) with and has since written to the Ombudsman ogy or economic factors. Guangzhou Dongsong for the supply of to consider withdrawing the report. 40,000 tonnes of cement. Chueng says the company is now con- “If this is not done, the company may structing an accommodation and admin- “The purpose of this MoU is to estab- challenge the validity of the report in the istration block to house the technical lish the relationship between Hima and courts of law,” adds the lawyer. Guangzhou Dongsong. This cooperation team that will come to assemble the fac- In a May 13, 2013 a letter, President Yow- tories in the later part of this year. Con- of both parties shall cover the project of construction of the phosphate plant and eri Museveni directed Energy & Miner- struction is being undertaken by M23rd als Development Minister Irene Muloni Metallurgy (U) Company. Currently, the steel mill plant, and any other projects within the Sukulu industrial park,” Daniel to award the Sukulu phosphates deal to company is in the final stages of complet- “our friend the Chinese.” ing the interior decoration. Pettersson, the country manager, Hima Cement, said recently. He noted that the Chinese group, Guang- Chueng says the project includes con- Uganda is also expected to earn billions zhou Dongsong, had ambitious plans to struction of the state of the art polyme- develop the phosphates deposits at Su- tallic ore dressing plant with capacity to of shillings through mainly taxes and roy- alties. kulu into fertilizers as well as fully exploit process 2 million tonnes a year and a the other minerals occurring in the same steel mill plant with an annual production 21 or 99 year lease environs, hence his strong recommenda- capacity of 300,000 tonnes. “We have acquired 334 acres of mining tion for them to be awarded the license The industrial complex, now under con- land from local residents and 600 acres “if these people are capable in terms of struction on a 600-acre piece of land, will from the Ugandan government for fac- technology and finance.” also contain a phosphate fertilizer plant tory construction. The lease period is 99 In addition to Museveni’s support, the with a production capacity of at least years,” Chueng explains. company signed a Memorandum of Un- 300,000 tonnes per year, a power plant Some locals though are said to be unhap- derstanding with the Uganda Free Zone and a sulphuric acid plant with a capacity Authority to develop an industrial park in of 200,000 tonnes per year. py with the 99 year lease, claiming they were under the impression that it would Tororo district on September 7, 2016. “We have so far injected about $90 mil- not go beyond 21 years. CSR lion (about Shs 306 billion) into the project mainly in land acquisitions, ex- However, Denis Kusaasira, the managing Chueng explained that for the last two ploration and construction of the ad- partner at ABMAK Associates – Guang- years the company has spent a lot of ministration and accommodation block, zhou Dongsong’s legal advisors– notes money on Corporate Social Responsibil- among others,” says Zheng Xu, the gen- that everything was made clear to the ity (CSR) initiatives endearing the project eral manager, Guangzhou Dongsong En- landowners from the start. He explains to the locals. ergy Group, that the compensation at the rate of UShs 30m per acre of land was paid in The company has strongly been involved He explains that once production starts, addition to compensation for crops, trees in school projects. It has donated 1,000 locally-produced fertilizers will be afford- and other developments on the land. On sets of school bags, uniforms as well as able and will go a long way to boosting top of the total compensation, the resi- other school supplies to students in the agricultural production in the country. He dents received 30% disturbance allow- Sukulu mining area, and donated anoth- said the steel products from the project ance as well – which in totality is fair and er $4,000 (UShs13m) to renovate school will bring down the prices of imported adequate, according to Kusaasira. buildings. The refurbishments of the St steel in Uganda. The first phase of the Jim High School library plus $300,000 project is scheduled to start in first quar- “If we signed for a 21 year lease, the com- (UShs1.02b) towards Lyolwa Technical ter of 2018. It should have commenced pensation would have been much lower,” School are the other educational grants earlier but the project has faced a few he adds. from the Chinese firm.
22 The Uganda Chamber of Mines & Petroleum Tororo, Uganda’s Top
Mining Destination ore than 40 years ago when copper Commissioner of Tororo district, said There is also the Standard Gauge Railway Maccounted for a large size of Kenya’s Simba Cement is expected to (SGR). Already the people of Tororo have Uganda’s economy, Kasese in the western start production in the first quarter of been compensated for the land needed part of the country, where the mineral next year. for the Tororo – Packwach railway line. was mined, used to be the country’s Preliminary engineering designs of this mining town. Nearly all standard facilities Tororo Cement Limited, the oldest line have been completed. that the workers at the mines needed cement company operating in the district, were there – hospitals, schools, a train, is already in the process of investing in And yet, with Tororo basking in the an airfield, among others. more machinery that will increase its increased cash flows into the district, annual capacity to three million tonnes other problems have emerged. The land The town of Kilembe in Kasese was seen from the current 1.9 million tonnes. question remains a point of contention as fights emerge over the ownership. as a haven that could survive on its own, The people of Tororo are already feeling nearly detached from the economic the financial benefits that have come Other residents feel the compensation chaos that came with a fragile political with mineral investments. rates are low. Usually the problem comes environment of Uganda. Things started from the time lag between the time the turning sour for Kasese when copper “There are positive changes happening land was valued to the day payment is prices on the world market started in Tororo today in terms of employment made. With the erratic rise in land prices, collapsing in the 1970s. for the local people,” Orochi pointed out. many residents feel the compensation “Many people were also compensated for The mines started operating below rates do not reflect the current market the land [to pave way for the phosphate prices, something that has created capacity. Exports fell while many workers mining project].” from Kilembe Mines Limited, the disagreements and damaged the company that was producing copper, relationship between the local people were gradually laid off. Today, Kilembe is and the companies in the district. a shadow of its former glory, even as new Land has become expensive in Tororo, Chinese investors try to revive copper according to Orochi. “You cannot get a production. plot [of 50 feet by 100 feet around the There is a new mineral cradle today, town] at less than S hs 20 though – Tororo in Eastern Uganda. Life million,” he said. High land prices have in Tororo is slowly changing for the better. pushed people are from the town deeper The once quiet town, whose main source into the villages, where social services of revenue used to be the cross-border are limited. trade between Uganda and Kenya, is Orochi said the district is grappling with witnessing a change in fortune. issues of some people squandering the Dongsong’s plans to put up an industrial money they have received as a result of There are three cement companies now park in Tororo could attract other based in Tororo district – Tororo Cement, the boom in business. District officials businesses in the district. The Chinese have seen many people spend money Hima Cement, and Kenya National company signed a Memorandum of Cement Limited. in non-productive areas such as drinking Understanding in September this year more booze. If this sort of behavior spirals Apart from the cement companies, with the Uganda Free Zone Authority out of control, it can spark off a crime there is also a large phosphate project over the development of the industrial wave and hurt the town’s prospects for coming up in Tororo district, which is park. investments. being undertaken by China’s Guangzhou Companies are also engaged in different Dongsong Energy Company limited. Orochi noted that they are trying to corporate social responsibility activities sensitize people about the benefits of The expected investment at the Sukulu in critical areas such as health and phosphate is $620 million. investing the money in areas where education. For example, they can get a return. Much of the hope, Together with the three cement DongSong Group donated $300,000 to though, will lie with the companies companies, the combined investment Tororo Iyolwa Technical School for the employing more local people in order to from these four companies is more than reconstruction of a number of blocks at keep them in productive. $1 billion – the largest mining investment the school. in a single district in Uganda. “We want them to employ more local The mining industry is set to tap into people. Let them give priority to local Hima Cement recently announced it was other linkages as government pays more people. We have our capable sons about to start constructing a grinding attention to Tororo district. For example, and daughters in this country who are station in Tororo, which is valued at $40 the government has received a loan qualified to do those jobs,” Orochi said. million. The investment is expected to from the African Development Fund to Companies will have to listen to such increase Hima Cement’s capacity to c1.9 upgrade the 260km Tororo-Lira 132kV million metric tonnes per year. pleas, and acting on them, in order to transmission line in order to supply make Tororo the beacon of hope for Martin Orochi, the Resident District power to the mushrooming premises other upcoming mining towns. along the line.
The Uganda Chamber of Mines & Petroleum 23 CITIBANK HIMA CEMENT CNOOC INAUGURATION 2016 INAUGURATION EU BUSINESS FORUM KIA MOTOR AT KAYOLA BUS LAUNCH KAYOLA KIA MOTOR AT
24 The Uganda Chamber of Mines & Petroleum CITIBANK HIMA CEMENT CNOOC INAUGURATION 2016 INAUGURATION EU BUSINESS FORUM KIA MOTOR AT KAYOLA BUS LAUNCH KAYOLA KIA MOTOR AT
The Uganda Chamber of Mines & Petroleum 25 NFT POPE VISIT NEW PRAU PRESIDENT
26 The Uganda Chamber of Mines & Petroleum NFT Uganda’s oil sector back on course
licenses, Muloni implored oil companies to make final investment decisions (FIDs). “Companies are required to take final investment decisions in the first 18 months after the issuance of production license,” she said. To the oil companies, the award of production licenses marks a major milestone towards the production of POPE VISIT Uganda’s oil resources and expressed readiness to proceed to make a Final Investment Decision for the integrated Lake Albert project. The companies noted: “It complements the production license issued to CNOOC Uganda Ltd as the operator of Exploration Area 3 (Kingfisher) and the important decision made to export crude oil to the international market through a 24 inch, 1,443km pipeline from Kabaale to Tanga port. The granting of production licenses now paves way for the joint venture partners and other stakeholders to make Dr Josephine Wapakabulo, considerations for significant long term capital and infrastructure investments in new CEO, Uganda National Oil Company Uganda,”
NEW PRAU PRESIDENT For the last three years, Uganda’s oil Muloni awarded eight production In addition to the award of production industry has experienced very little licenses to Tullow Operations Pty Ltd licenses, government is also soon activity as both government and the oil and Total E&P Uganda BV. Tullow was expected to issue oil exploration licenses companies have been preoccupied with awarded five production licenses while from the first competitive round of boardroom negotiations. Total three. Tullow’s licenses for the oil licensing. fields of Mputa-Nzizi-Waraga, Kasemene- With little work going on in the oil fields, Already, government is in negotiations Wahrindi, Kigogole-Ngara, Nsoga and many companies laid off hundreds of with four oil companies for production Ngege in Exploration Area 2 (EA2). workers, while the local suppliers have sharing agreements (PSAs) for the three struggled to stay in business as they are Total on the other hand, was awarded out of six oil blocks it advertised. The weighed down with other costs such as exploration licenses in respect of Ngiri, companies are: WalterSmith Oil Ltd paying off huge bank debts. JobiRii and Gunya fields in Exploration (Nigeria) which is negotiating a PSA Area 1 (EA1). The issuance of the for Turaco, while two other Nigerian However, the recent award of eight production licence puts on course the companies – Oranto Petroleum production licenses to Tullow and Total country’s hopes of having its ‘First Oil’ by International Ltd and Delta Petroleum E&P Uganda BV, and the expected 2020. Resources Ltd are in negotiations for a issuance of four oil exploration licenses PSA over Ngassa block. to a set of new companies, is bound to According to the Petroleum Act, 2013, rejuvenate the sector once again. production licenses are valid for 20 years Australia’s Armour Energy Ltd is from the date of the grant, subject to negotiating a PSA for Kanywataba block. In August, 2016 Energy Minister, Irene renewal for another five years. After the Negotiations were expected to be
The Uganda Chamber of Mines & Petroleum 27 E&P Uganda BV has already expressed interest to finance the construction of the pipeline, which is estimated at $4bn. Refinery Setback While the issuance of the Production Licenses may have lifted spirits in the sector, the withdrawal of the Russian-led consortium, RT Global Resources, from the oil refinery construction negotiations in July was a major setback in Uganda’s quest to become an oil producing country by 2020. The Selected Preferred Bidder to serve as the lead investor refinery, pulled out at the last minute after failing to agree with Uganda on several negotiation clauses, 14 months after winning the bid. As a result, the government has restructured the oil refinery project and is now in a new search for a lead investor according to Dozith Abeinomugisha, the Assistant Commissioner in the Ministry of Energy and Mineral Development. “Initially, we had a Public Private Ernest Rubondo, newly appointed ED of the Petroleum Authority of Uganda Partnership, but with Rostec [RT Global Resources] leaving, we are looking at restructuring the project to bring it to concluded before the end of 2016 with Development. a public-lead instead of private-sector the companies receiving exploration His appointment ended a search which led investment. This means government licenses. had started in January 2016. He formally takes majority of the shares and the Oil Institutions took office on September 1, 2016. private developer takes a smaller share,” The Petroleum Authority of Uganda is Abeinomugisha said at the Uganda The recent months have also seen established by Petroleum (Exploration, Chamber of Mines and Petroleum government constitute the three Production and Development) Act, 2013 (UCMP) member’s annual general important ‘oil institutions’ – the as the regulator for the oil sector. meeting last month. Petroleum Authority of Uganda, National Oil Company and the Directorate of Also in August this year, Dr Josephine “Negations with the alternate bidder Petroleum in the Ministry of Energy and Wapakabulo took office as the Chief have never commenced. There was never Minerals Development. Executive Officer (CEO) of the Uganda any negotiation with the South Koreans National Oil Company. Wapakabulo and [SK Engineering and Construction],” he In August this year, Ernest Rubondo, was Rubondo’s appointments set a new pace added. appointed the executive director of the for the sector. Petroleum Authority of Uganda (PAU). In the previous arrangement, the refinery Prior to his appointment, Rubondo was Earlier in May, government chose was to be constructed on Public Private the director, Petroleum Directorate Tanga in Tanzania as its preferred end- Partnership (PPP) with a private lead in the Ministry of Energy and Mineral point for the crude oil pipeline. Total investor owning 60 percent stake while the remaining 40 percent would be owned by government including, EAC partner states. According to Abeinomugisha, in the new arrangement, government will have a higher stake in the refinery. “That is the structure we are undertaking but we still need a lead investor who has the technology to build and operate the refinery. So, we are looking for an investor that will partner with government,” he explained.
By Edward Ssekika
28 The Uganda Chamber of Mines & Petroleum Tax hurdles to negotiate in the Uganda-Tanzania oil popeline
The Chad-Cameroon Pipeline Project has viable lessons
By Denis Yekoyasi Kakembo he governments of Uganda and Tanzania agreed in April 2016 to build a cross border pipeline. As Uganda is a At the point of deciding Tlandlocked country, a pipeline to facilitate the delivery whether to go ahead with the of the crude oil to export markets amongst other commercial undertakings is required to successfully develop the country’s project, lenders are keen on hydrocarbon discoveries. Discussions to establish the legal, fiscal and financial framework under which the project will be a stable legal and predictable developed are understood to be underway. Since this announcement, there has been heightened tax environment. Lenders are anticipation of economic benefits that will flow from this venture wary that future legal and tax which needs to be moderated with a measure of reality as not all proposed pipeline projects take off. Cross border pipelines changes can impact the ability present challenges that other ventures do not. They run long distances and the Uganda and Tanzania pipeline will cover over of the project company to 1400 kilometers crossing both countries which operate different legal and tax regimes. Political and economic consideration repay its loans
The Uganda Chamber of Mines & Petroleum 29 inherent to pipeline projects loom large to utilize tax credits on the tax suffered in and operation, VAT incurred during compared to other ventures combining each of the jurisdiction which can affect construction will be significant unless to create an intricate terrain that must be the returns hence the project viability. eliminated. Uganda recently revised its navigated if a viable and bankable project Both Uganda and Tanzania have general VAT regime to eliminate VAT incurred structure is to be created. measures within their laws to alleviate during the investment phase of pipeline double taxation but these may need construction but the same should be As this proposed pipeline project will be to reviewed to ensure that they do not reflected by Tanzania. Significant input private sector led, the project sponsors result in any tax leakages that may affect VAT will also be incurred at operational and lenders will be keen to commit the venture returns in respect of the phase creating repayment claims that capital to a venture that is commercially proposed pipeline project. will be handled by the tax authorities viable from which their investment can in both countries. Unless this issue be recouped. This article explores the The tax exemptions and incentives is appropriately handled, it has the tax issues that both the governments of provided in the project agreements may potential to escalate the investment Tanzania and Uganda have to contend not be honoured by the government costs potentially rendering the venture with at this formative stage if their bodies in Uganda and Tanzania unless the uneconomic. These issues must be aspiration to successfully develop this same are reflected in local tax legislation satisfactorily addressed by the project pipeline is to be realized. or the agreements are ratified into law agreements. Pipeline legal framework influences The imposition of import taxes and the venture taxation regime which associated levies on goods imported in can impact the cost structure for the relation to the pipeline construction and construction and operation stages. operation can increase the overall costs High construction and operational costs The euphoria and affect the project viability. There is arising from tax policy have the potential no special regime envisioned under the to render pipeline projects uneconomic. surrounding import legislation applicable to both The governments of Uganda and Tanzania countries that exempts equipment and will enter into an inter-governmental the impending inputs imported during the pipeline agreement (IGA) and a host government construction stage from taxes. The agreement (HGA) separately with the construction position adopted by other countries and project sponsors which will constitute for some of the ongoing infrastructure the pipeline legal framework. These of the Uganda- projects in Uganda and Tanzania has agreements will in general deal with Tanzania crude oil been to exempt such ventures from the land right issues, harmonization of the requirement to pay import duties so as legal and tax structures, physical security, pipeline should to keep the building costs low and viable. government and investor obligations and other relevant project implementation be converted into The setting of transit fees to allow the issues. crude oil pipeline through another’s territory is always a controversial subject. A form of debt financing known as tangible action Issues around transit fees are the major project financing will most likely fund the with the respective source of conflict between countries building of this pipeline. The global pool and disruption of the throughput of capital available for project financing governments when operation commences. Mutually is finite and competed for globally. beneficial transit fees that will allow the A company to build and operate the walking the talk to project to remain viable in the current pipeline will be formed and will repay environment of low crude oil prices the lenders from the project returns. create a favourable should be agreed by the governments of At the point of deciding whether to Uganda and Tanzania. go ahead with the project, lenders are tax and fiscal keen on a stable legal and predictable The euphoria surrounding the impending tax environment. Lenders are wary that environment lest construction of the Uganda-Tanzania future legal and tax changes can impact crude oil pipeline should be converted the ability of the project company to the project remains into tangible action with the respective repay its loans. It is therefore expected governments walking the talk to create that the IGA and HGA will include unattainable a favourable tax and fiscal environment robust stabilization clauses and dispute lest the project remains unattainable. resolution measures. Stabilization clauses Both Uganda and Tanzania have the preclude host countries from amending benefit of picking valuable lessons from legislation that touches the project or can by both countries. Investors will be keen more relatively recent built cross border trigger a renegotiation of the investment that the exemptions and incentives in pipelines such as the Chad-Cameroon agreement to restore the previous fiscal these agreements have the force of law. pipeline and the Baku-Tblisi-Ceyhan line balance. Some infrastructural projects currently to put together a viable and bankable being undertaken in Uganda and Tanzania pipeline project structure. The project agreements should also have benefited from this measure and it clearly determine the pipeline tax base is hoped the same will be extended to the The writer is a Senior Tax Manager and in both Uganda and Tanzania. Multiple proposed pipeline project. energy sector specialist with Deloitte layers of taxation or uncertainty around East Africa how income tax applies to each country’s The construction and operational costs portion of the pipeline can create tax incurred will be significant. Given the inefficiencies stemming from the inability long lead time between construction
30 The Uganda Chamber of Mines & Petroleum After graduation, Bukenya made it a Profile point to return home, landing a job in the downstream division of Royal Dutch Shell Adrian Bukenya-Mulindwa graduated as a in Africa, in a more commercial role as Chemical Engineer from Drexel University, business improvement analyst for Africa. Philadelphia, USA, in 2001. He has since Although based in Uganda, his jurisdiction worked across the value chain in the oil extended across Sub Saharan Africa. and gas sector, for more than 10 years. He later became the Sales Manager for Bukenya started off as a Materials Engineer lubricants and LPG at Shell, Uganda. at Black and Decker Corporation in 2001, After five years with Shell, Bukenya joined in Maryland, USA where, for three years, Tullow Oil Uganda as a Commercial he was involved in the manufacturing Advisor in 2010. In 2012 when the joint of plastics and usage of plastic polymer venture partners (Total E&P and CNOOC) materials to make equipment. farmed-in, Bukenya’s role expanded into During his time at Black and Decker, joint-venture management, primarily Bukenya helped transfer an entire plastics responsible for managing his company’s Adrian Bukenya, production unit from the US to Mexico; contractual relationships with its JV Business Development Manager, which eventually ended up in China. partners and the government of Uganda. This was when the industry trend was Bukenya played a key role in the regulatory GE Oil & Gas, Uganda globalization and manufacturing was management aspects, including the moving from the US mainland into lower production licence application process at cost centres – Mexico and China. the time. He later attended Oxford University in the In March, 2016, Bukenya became UK, graduating with an MBA in Finance General Electric Oil & Gas’ first employee and Economics in 2005. in Uganda, in the role of Business Development Manager
GE Gives Uganda Oil Seal of Approval
What is General Electric, Oil & Gas and design. Because we provide a lot lead businesses – in Uganda’s case, it has about? of equipment and services for the been oil & gas – and then everything else development of oil & gas across the value is attended to simultaneously. My role GE is the world’s leading engineering chain, we see ourselves playing a big role is primarily focused around oil & gas, and manufacturing company. GE is here i.e. the upstream development, the however as and when the opportunities an original equipment manufacturer refinery project and others such as the avail themselves I will support the (OEM) and provides products and crude oil export pipeline. As such, we development of the other GE businesses solutions that work in subsea, offshore, have started engaging with the different (Healthcare, Aviation, Power etc) across onshore, pipeline, natural gas, refinery stakeholders involved in these projects as all other sectors as well. and petrochemical sectors of the oil & we set up the structure of the company gas Value chain (these include but not Over the next few years you will see the to allow us to operate efficiently and limited to turbo machinery – turbines, presence of GE growing across quite a effectively. compressors, pumps, flow process number of diverse sectors, when the technologies, inspection technologies, Is it only oil & gas GE is interested in opportunities present themselves. measurement and sensing equipment Uganda? What will give GE the edge over other etc.) we also provide a whole range of We are interested in a lot more than just equipment suppliers? digital solutions within the development oil and gas since our product portfolio of the oil and gas sector. Besides having the best equipment and is quite diverse. We can participate in technology on the market, it is important In line with GE’s recent focus on mining and other industries like cement to note that GE is the only digital industrial developing its business across sub production because the equipment company in the world right now. Saharan Africa, from the regional office that we use and the technologies and in Nairobi, my role is to ensure that we solutions that we have are quite relevant Because of our 124-year history, we have participate in the development of oil & to all these different sectors. gathered lots of data and knowledge gas in Uganda. across different engineering applications. GE is looking to fully explore all the This data has been digitalized and we can We currently have a very strong oil & gas opportunities to participate in the Uganda now use a digital platform to increase operation within Nigeria and Angola as economy. We have GE Healthcare, GE efficiencies in people’s processes well as Mozambique, where it is about to Power & Water, GE Renewable Energy, irrespective of whether they are using GE go into full scale development. GE Transport, GE Aviation, GE Energy equipment or not. Connections, all of which are pursuing Now with the confirmation of the pipeline opportunities in Uganda. Most people think of internet apps route for Uganda’s oil and the issuing in terms of the social use; with most of production licenses, the next phase Our business model is such that we apps addressing social needs – like is going to be the front end engineering enter into a market using one of the communication. However, GE is using the
The Uganda Chamber of Mines & Petroleum 31 same principle in industrial applications – good at doing i.e. building very efficient, in such a way that will enable the client to utilizing the growth in the digital platform effective and reliable equipment and manage the financing process. to make industrial solutions a lot more supporting industries to become a lot GE does not just stop at the point of efficient, mainstream and user friendly. more productive and profitable. sale. We work with our customers to Normally a jet engine is seen as a Is there value for a company of GE’s enable them get the best value out of our piece of machinery that will help the magnitude in a thin economy like equipment and technology. We provide aeroplane take off, land and propel the Uganda’s? very attractive service arrangements that plane. However, if you use the data that help the client as they operate through Uganda is the perfect market to apply comes out of this engine (or any turbine, the lifespan of our equipment; in fact GE solutions. Uganda is emerging out generator, compressor etc), you could because of our deep understanding of of early development, with ambitions make developing future equipment a the industries within which we operate of becoming a middle-income economy lot more efficient, servicing it a lot more we are able to provide service packages in the next five years. Irrespective of effective and give its users much better for equipment from other manufacturers. the state of the economy, GE can find a experience in terms of its output. way of providing the right solution that American firms have been criticized GE makes a lot of equipment across supports the project while utilizing our as failing to appreciate Africa’s market various industries and we keep in equipment & technology effectively. dynamics. How does this apply to GE? constant touch with our clientele. It GE appreciates that for Uganda’s We appreciate how the market in Sub is this feedback that we use to create economy to grow, it will need to have Saharan Africa works. In oil & gas, applications that enable more efficient certain infrastructure in place; GE we are already operating in Nigeria, use of our equipment (and any other products are intrinsically related to Mozambique and Angola, and in the brand of equipment). infrastructure – extracting natural other businesses (power, healthcare, One is able to use the data to project resources, improving healthcare systems, aviation etc) we are present across Sub the challenges or the liabilities of the developing electricity grid solutions etc, Saharan Africa. We are willing to work project and fix them before a problem all these projects require the appropriate within the market dynamics and ensure occurs. The biggest costs facing huge infrastructure and are extremely capital- that we comply with all applicable laws manufacturers and industrial operators intensive and often times they need long and regulations. are usually related to downtime. So, term investment commitments. Uganda, We have demonstrated our ability to if downtime can be reduced or even for one, isn’t just spending money on oil successfully do that across the continent eliminated by applying technology, this and gas right now; it is investing – and and continue to improve our capability to will add significant value to the customer. with investing, you expect a sustainable directly service Africa. return in the long run. GE works with Remember, our founder, Thomas Edison, our clients to ensure that the investment Many Ugandans are not patient enough was known for many inventions and that is made in the projects works in a to see the investment in the oil resource innovations, hence the bread and butter sustainable manner. maturing. From your experience, how of this company is to continuously invent, can the expectations be managed? innovate and keep imagination alive. So, Remember, we are providing the right one of the areas is to try and capture solutions for our clients. If one of the Management of expectations and this new digital thinking platform and challenges is financing, GE can work with revenue distribution are the biggest apply it to the things that we are really the client so as to package the transaction challenges with resources like oil.
32 The Uganda Chamber of Mines & Petroleum Experience has shown that utilization of The operators try to help the suppliers get local suppliers and partners is one of the They need to appreciate that the it right, with regular workshops hosted better ways of managing expectations where suppliers are taken through, say, a and achieving a sense of sustainability. upside is round the corner and all typical tendering process. they can do is prepare themselves to GE is very aware of this and will maximize tap into the upcoming opportunities. In general, Ugandan companies have the utilization of national content in stepped up, especially in areas that they whatever form – be it suppliers, partners When an organization of GE’s global are comfortable in. They can for instance and definitely the human resource. This stature pitches camp in Uganda it build camps; offer logistical support and is the most cost effective and sustainable demonstrates that the country’s do this within the accepted industry way since such an investment is long petroleum project is world class and standards. However the amount of local term. therefore opportunities will present companies and individuals at this level needs to be increased because there will Where utilizing a national service themselves. be numerous opportunities in the next provider or employ a Ugandan isn’t phase as highlighted by the Industrial possible, expatriate partners can come Baseline Survey. in, in the short term but they will petroleum industry alone. You might find facilitate knowledge and skills transfer to yourself stuck when the industry slows What can companies like GE and the the nationals to carry the developments down like it has happened in the recent government do to help Ugandans catch forward. GE has local partners in Nigeria past. The more prudent option is to up to the industry demands? who operate our technology well within become better in your core competence Companies and the government are our expectations. We are doing the same by improving your operating standards, already making a lot of effort in providing in Angola and Mozambique and we will efficiencies, responsiveness, health and training and skilling opportunities operate the same way in Uganda. safety and the like. for Ugandans. GE has a very strong But the average Ugandan individual or After all, once you have worked in this training system. For example, under our company will tell you it is very costly to highly regulated industry, you can work “GE University” we not only train our upgrade to match industry standards. anywhere. I know people trained in employees but our clients and customers How can this be done sustainably? lifting in the upstream oil & gas sector on a broad range of industry state of the who have now moved on easily to utilize art technologies& equipment. Ugandans who want to participate in the their highly-qualified skill set in other petroleum industry must focus on the industries in the East African region GE is also interested in partnering with area they are good at. If you are a farmer, because their certification is extremely training institutions and universities focus on being the best farmer you can well-respected across multiple industries. where it is relevant. be so that you can take advantage of the It is important to note that Ugandans are opportunities when the oil & gas sector As regards the human resource, most more than capable to run this industry, takes off. This will be a sustainable focus direct jobs in this industry are vocational and GE respects and encourages this. because your service will be required or artisanal and are also finite. So, again, irrespective of whether there is an oil if everyone was to suddenly pursue oil The slowdown in the activities in the boom or not. and gas qualifications, an oversupply of industry left many companies and trained engineers and the like will be individuals that had invested in the The real impact of the oil and gas inevitable. It will be more sustainable, sector bruised. What is your advice to sector will not necessarily be direct, therefore, to focus on the areas that are them? but rather it will be a knock-on effect not solely dependent on the oil & gas on the economy. Remember Uganda’s sector but can be applied to many other They need to appreciate that the upside petroleum project is actually more of a sectors. is round the corner and all they can logistics project. Being 1,400km from the do is prepare themselves to tap into sea means there is a huge opportunity It is important to note that whether at the upcoming opportunities. When in getting goods services and people to individual or company level, if you aspire an organization of GE’s global stature and from the area of activity. So, if one to be in the oil & gas industry, your pitches camp in Uganda, it demonstrates improves their logistics capabilities to mindset has to not only be attuned to that the country’s petroleum project is match the industry standard – as the meeting the industry standards but also world class and therefore opportunities upstream, pipeline and refinery have to towards working hard and continuously will present themselves. be built with significant amounts of cargo innovating in order for you to remain It is everyone’s responsibility to ensure flowing into the country and thereafter competitive in your particular discipline. this project benefits all of us. The oil the road, rail and air transport systems From your time in the industry, are will not be here forever so we must are all going to be improved as you can Ugandan firms and suppliers cognizant develop it so as to positively impact already see around the country. This is of these high industry standards and are future generations. Dubai had the same benefiting all of Uganda, not only the oil they making an effort to meet them? resources as we did – 200,000bpd – & gas sector. Therefore, it is incumbent and this resource has practically been on any Uganda businessman to begin There are some companies that have depleted. However, the UAE has used improving their operational productivity embraced the opportunity and made their resource to transform their country so as to take advantage of the improving the effort to improve. You will notice into something sustainable. We can learn infrastructure. that they are the same companies that continuously win the tenders. There is no from this. The biggest mistake is to drop everything favoritism; the contracting process is fully you were doing before to focus on the transparent.
The Uganda Chamber of Mines & Petroleum 33 EnviroServ’s Modern Waste Facility To Serve Region STANBIC TRADE INVESTMENT BREAKFAST STANBIC
nviroServ Waste Management The landfill site is a Class A facility Waste streams accepted Ltd is a proudly African company with a lifespan of 20 to 30 years and is Ewith over 35 years’ experience supported by a state of the art laboratory. Our facility is licensed to receive both offering cost effective and integrated The laboratory has the latest equipment hazardous and general waste streams. waste management solutions across sub- that has the capability to analyse Saharan Africa. The company operates samples for environmental parameters Waste management remains a new with total integrity, and is always (environmental testing is a niche service) concept in Uganda; however, EnviroServ prioritising environmental care. in a remote location and in central Africa Uganda’s entry into the waste where these services are not readily management industry has ensured that Driven by a need to expand its sustainable available. All hazardous waste is screened communities are educated on correct service offering into other countries, the before it is accepted onto the site. waste management practices. A number company partnered with Green Albertine of Ugandans in and around the landfill in June 2013 and invested resources to Industries site have received training on waste TOTAL UGANDA TOTAL establish EnviroServ Uganda Limited. management and are employed at EnviroServ Uganda has constructed the We service numerous industries which the site. The communities adjacent to first technologically advanced waste include: mining, oil and gas, automotive, the site are beneficiaries of EnviroServ treatment and disposal facility with chemical and related, construction, food Uganda’s corporate social responsibility the aim of providing industrial and and beverage, retail, manufacturing, programmes such as the stationery hazardous waste management in Uganda metallurgical, paper, printing and purchased for some school children to and her neighbouring countries. The packaging, pharmaceutical and medical, advance education in the area. There has facility is engineered and complies with power generation, textile, leather and been an undeniable ripple effect since the stringent waste management legislation, wood amongst others. construction of this site in Nyamasoga in including Uganda’s National Environment Hoima District. Management Authority’s (NEMA). Recently, we have been tasked EnviroServ Uganda has resources, skills with asbestos stripping and safe EnviroServ provides peace of mind to set and expertise to manage this facility disposal thereof. Asbestos is a highly its customers, by offering a professional in a manner which assures customers hazardous fibre with adverse health service that is auditable and compliant peace of mind knowing that their waste implications. Furthermore, EnviroServ with legislation. is handled responsibly. Uganda can expertly treat liquid and waste water. www.enviroserv.co.za UAP COMPLEX OPENING
34 The Uganda Chamber of Mines & Petroleum STANBIC TRADE INVESTMENT BREAKFAST STANBIC TOTAL UGANDA TOTAL UAP COMPLEX OPENING
The Uganda Chamber of Mines & Petroleum 35 UCMP AND MARSH COCKTAIL UGANDA FREE ZONE AUTHORITY UCMP OIL CONVENTION 2016 UIA @50yrs Celebration ERA UNIFREIGHT CLIENTS’ PARTY
36 The Uganda Chamber of Mines & Petroleum UCMP AND MARSH COCKTAIL UGANDA FREE ZONE AUTHORITY UCMP OIL CONVENTION 2016 UIA @50yrs Celebration ERA UNIFREIGHT CLIENTS’ PARTY
The Uganda Chamber of Mines & Petroleum 37 Free Zones to Increase Uganda’s Competitiveness ganda Free Zones Authority (UFZA) is a body corporate under the supervision of the Ministry of Finance, Planning and Economic Development. It was Uestablished following His Excellency the President’s assent to the Free Zones Act, 2014 and started operations on September 1, 2014. The Authority is responsible for the establishment, development, management, marketing, maintenance, supervision and control of Free Zones in Uganda. A Free Zone, is a designated area where goods introduced and produced are generally regarded as being outside the customs territory, in so far as import and export duties are concerned. They are usually labour-intensive manufacturing centres that involve the import of raw materials or components and the export of factory products. They involve production of goods and services, such as tourism and hospitality services, mainly for the export market. In this interview, UFZA’s Executive Director Mr. Richard Jabo elaborates more on the subject:
What purpose will Free Zones serve? capital goods for the first ten years, 100% Where deductions apply, they are exemption from tax on income from agro- made after determination of taxable Free Zones will serve as economic processing, 100% exemption on income income and exhaustion of the applicable development tools to; boost private derived from the operation of aircrafts incentives. investment, production and exports in domestic and international traffic or in specified priority sectors; improve the leasing of aircraft, 100% exemption Where have these Free Zones worked or the quality of manufactured goods on income of a person offering technical been successful? to meet the international market assistance and 00% exemption of the standards; commercialise and develop The Jebel Ali FTZ in Dubai, the first in the income of an investor compensation UAE, is one of the most successful FTZ the agricultural sector; increase fund. manufacturing and value addition. in the world. The UAE has undergone Investors also get unrestricted remittance large-scale transformation and has We will also see improved infrastructure, of profits after tax, 100% deduction experienced speedy financial, economic an increase in employment opportunities of expenses incurred on intangible and trading success in only 20 years as a and improve the quality of the workforce. assets with an ascertainable useful life, result of the free zones. Jebel Ali attracts The economy will be diversified and exemption on plant and machinery used foreign investment, has created jobs and technological transfer and knowledge in the free zones for 5 years and 1 day backward linkages with the UAE economy spill-over to Uganda will be inevitable. from customs duty upon disposal. and increased export for the country. Uganda’s trade deficit should be lowered There is also exemption from all taxes, Kenya - has had the longest experience as a result. In 2012 for instance, Uganda’s levies and rates on exports from the free with EPZs in the EAC having commenced exports earnings amounted to $2.8 zones namely excise duty and customs with the enactment of the EPZ Act in billion compared to the total import bill taxes; 100% deduction of expenditure 1990 and has recorded the most success of $6.1 billion – a trade deficit peak of on scientific research, 100% deduction of with about 75 EPZ firms. $3.3 billion. training expenditure and exemption and Uganda is a landlocked country. Isn’t this Do existing companies manufacturing Zero rating for Value Added Tax for most a negative attribute for us as a country? for export qualify to be licensed as Free supplies and services. Zones? Does the law act retrospectively? Uganda is strategically positioned and is A list of exempted and zero rated supplies easily accessible to all our neighbours; Existing companies manufacturing for exists in the law from which investors can Uganda provides easy access to DRC, export qualify to be licensed as Free benefit. Central African Republic, Kenya, Somalia, Zones on condition that they meet the The non-tax incentives include access Mogadishu, Zambia and a whole host set requirements prescribed in the Act, to physical amenities, infrastructure, of other Central and Southern African one of which is to be registered for the manpower and training; warehousing countries. sole purpose of operating in a Free Zone. of domestic goods which are not to be With government’s plans to develop the The authority can issue various licences exported provided that the warehousing standard gauge railway which is going including a Developer’s and Operator’s facilities of the free zone users are under to link the whole of East Africa up to licenses. utilised; on site customs inspection of Ethiopia through S. Sudan and plans to buildings and premises in the free zone develop the Airport to become a regional What incentives are available to an and on site customs inspection of natural and continental hub, access to and from investor who establishes within a Free persons, vehicles, vessels and aircrafts the country will be made a lot easier and Zone? entering and leaving the free zone; will provide immense opportunities for There are several incentives including These incentives will allow our investors the country. exemption from taxes and duties on all to produce and/or process large Uganda has access to the regional export processing zone imported inputs, quantities and better quality goods at a markets of COMESA and SADC as well 100% exemption of income derived from relatively competitive lower cost for the as preferential access to the EU and US exportation of finished consumer and export market. markets;
38 The Uganda Chamber of Mines & Petroleum Government to Support Beneficiation
he Mineral Wealth and Mining and management; mining regulation district reveals more spatial extension Infrastructure Development and administration; planning and of iron ore beyond the interpreted T(MWAMID) Project that implementation; environment, health boundaries and association with gold commenced in July 2015, under the and safety; and training of artisanal mineralization, samples are being Directorate of Geological Surveys and and small scale miners (ASMs). Masters analysed to established quality of iron Mines (DGSM) is aimed at strengthening of Science in Information System ore and other associated elements. the mineral sub-sector in the areas Management; short-term regional Geological, geochemical and geophysical of mining legislation, geological data and international collaborations in urveys were conducted to confirm and acquisition, mineral assessment, geosciences and resource management further re-define the Uranium Anomaly capacity building and management were also attended in Kenya, Sudan, in Amuru and Adjumani Districts labelled of geo-scientific data, promotion of China and Czech Republic. as ’Kitgum West Anomaly’ i.e. Kit4 and value addition and mineral trade and The project also conducted training Kit5 in Amuru and Adjumani Districts earthquake research. for 10 DSGM staff on mines inspection respectively. The project supported stakeholder’s procedures, standards, and requirements The Uranium assays recorded has an consultative meetings on the d r a ft in accordance with Regional Certification average concentration of 5ppm with mineral policy and principles to be Mechanism (RCM) and mine operators Thorium concentration of 30ppm in both embodied in the Mining Act Amendment on the requirements for compliance with targets. The Uranium concentrations Bill leading to a draft Green Paper on the RCM. Draft inspection template based seem too low for both prospects for any the Minerals and Mining policy; a draft on RCM requirements was produced. economic mineralization; however, it Cabinet Memo on the principles for the Exploration to Beneficiation Promotion may be worth to investigate the vicinity policy review and Cabinet Memo for the of the Aswa Shear zone for sporadic principles to be embodied in the Mining Geological, Geochemical and Geophysical mineralisation. Act amendment, 2016. Surveys and studies were undertaken over the Uranium target located at Ndale A resistivity /IP survey was undertaken The Directorate through MWAMID Volcanic field in Fort Portal (Kabarole) across the NNW trending graphite Project also initiated procurement for District. The studies has confirmed that bearing mafic granulite at Orom to drafting of Mineral Laboratory Policy Ndale volcanic field is rich in radioactive ascertain existence of disseminated as one of the key requirements for minerals with average concentrations of sulphide mineralisation. Two massive International Standards Organization Thorium (Th) – 150ppm, Uranium (U) – very conductive zones of graphitic (ISO) to enable the laboratory competitive 55ppm and Potassium (K) – 1.5%. Over gneiss and high chargeability anomalies internationally. a delineated anomaly covering 198 km2 interpreted as disseminated sulphide Enhancement of institutional out of 507 km2 interpreted. likely to host Zn and other base metals of capacity was also undertaken in economic value were mapped. Exploration of iron ore at Rutenga, Kabale areas of geoscience data acquisition
The Uganda Chamber of Mines & Petroleum 39 The project conducted appraisal of ASMs were undertaken and a base map The affected licensees were advised to Nyakasura geosite in FortPortal District. showing areas of active ASM mining adhere to the provisions of the Mining The Nyakasura geosite comprises of a areas in Uganda has also been updated. Act 2003. series of beautiful volcanic hills, explosive Five Mining Associations have been In addition a total of thirty 30 more crater, Lava dammed lakes, Calders, the registered. Kayonza- Kitumbi mining inspections were carried out on sites Rwenzori massif and legendary stalagmite Association in Mubende district; under illegal mining activities in Busia, and stalactite caves that need to be Morulem Mining Association in Moroto Mubende, Namayingo, Amudat, Kabale further developed into geo-tourist site. district; Busia United SMM in Busia and Kisoro districts. The team observed Consultatives meetings were held with District; Karita Mining Association in serious environmental degradations and the landowners in the area and creation Kapchorwa district and Singo Artisanal use of dangerous chemicals like cyanide of guide labels of geology documentation Miners Associationsin Mubende district. and mercury. is in process for the site. Inspections & monitoring The miners were sensitized on the HSE & Social awareness dangers of these chemicals and advised Sixty inspections covering 30 mining Capacity building of exploration and to register and legalize their operations. Leases were conducted. The inspections mining companies were undertaken to The project will engage local government established that 6 out of the 30 Mining address environmental, social, gender; leadership in the mining communities Leases were non-operational while some safety and best mining practices in the and miners to discourage use of those were noncompliant with environment, areas of Mubende, Namayingo, Buhweju, toxic chemicals without appropriate safe health and safety protections for Busia, Amudat, Moroto, Mbarara, Kabale, technologies. miners, poor mining methods, illegal Kisoro, Isingiro and Abim. Sensitization and improper mining methods as well Some of the inspections under the Mineral of over 3000 ASMs (artisanal & small as poor record keeping including filing Wealth and Mining Infrastructure scale miners) on health, safety and of production statistics at mine sites in Development (MWAMID) project social awareness in mining was also some mines sites. included: undertaken. Mapping and profiling of Africa Gold Refinery Hailed investment which is in line with the Only South Africa and Ghana have such Mineral Policy Objective of value refineries in Africa. addition to mineral ores and increase in mineral trade. The Permanent Secretary pledged support and challenged and encouraged Boasting 30 years’ experience in AGR to look forward to producing the trade, Tony Goetz N.V, a Belgian finished products especially jewellery. national, is AGR’s main investor. He has other refineries in Belgium and Dubai. The facility will officially and responsibly source for raw gold not only from The facility that sits on 1.9 hectares Uganda but from the entire eastern of land, strategically located near and central African region including Entebbe International Airport, is a $20m Tanzania, D.R.C, South Sudan and West investment, with most of the modern Africa, making it an African regional hub machinery and equipment imported refinery. from Europe. Apart from gold, it can also MEMD team at Africa Gold Refinary (AGR) process other precious metals. Using Gold, silver, platinum occur in all regions in Entebbe AQUA REGIA technology in processing, of Uganda. There are an estimated 8 million ounces of proven gold reserves he AGR Gold Refinery (AGR) project the plant has established accurate and speedy Assay services in its laboratory in the country, with artisanal and small at Entebbe has made considerable scale miners (ASMs) the dominant progress and the Ministry of Energy and has an installed production capacity T of 200Kg per day in a double shift. miners in the Eastern, N.E, Western and and Minerals Development has been Central Uganda. Further exploration impressed by the investment made. According to a company statement, and evaluation will discover and prove A team from the Ministry that was led AGR decided to invest in this project more potential areas for precious metals by the Permanent Secretary Kabagambe essentially because of the attractive requiring investment in mechanized Kaliisa and the head of the Petroleum liberal economic policies in Uganda, mining and processing. Authority, Ernest Rubondo conducted the county’s emphasis on a familiarization tour of the AGR facility. beneficiation and a free capital The purpose of the visit was for the account in the country (full team to acquaint themselves with convertibility of currencies). the operations of the gold refinery. Also, importantly, there is Discussions with the AGR management no such facility in the entire were held amidst a tour and inspection Eastern and Central Africa of the operations. region, with all the raw gold The team was impressed by the hitherto exported to Dubai, Europe and Asia for processing.
40 The Uganda Chamber of Mines & Petroleum Small Scale Miners (ASM) to feed the BNT installs crusher. Namakera To date, all artisanal miners claim pay coltan plant arrears to the tune of about UShs1b. This is a lost production record for which the wants NT Mining Company, which was Directorate has started investigations to Blicensed to develop and exploit the verify payment of royalties. quarterly tantalite deposit in Kakanena, Ntungamo In the event of mining without the district has installed a coltan gravity required License, the company should concentration and processing plant. pay royalties for the material mined export The inspection of the mine development and face the consequences of mining and operations established that the without a Mining License. permits gravity concentration plant is deemed to produce a concentrate of at least 85% tantalite, depending on the cut-off grade and runs of magnetic separation, African considering that superficial material is being mined. Plant trials had been undertaken and Panther operations were due to commence. Stockpiles of about 10 tonnes were Resources found on site, of which royalty returns has to be paid. installs tin However, key among the challenges raised was lack of power from the national grid and above all limited plant extent of deposit to support operations in the long run.
amekara Mining Company, which Steel Rolling mines the Namakera vermiculite Ndeposit has completed aeromagnetic surveys over an area of 99 Mills struggles square kilometres and today production stands at 30,000 tonnes of concentrate iron (from 150,000 tonnes of ore) per year. The ban on export of raw minerals last year however affected the operations of African Panther Resources has installed the mine a processing plant that will beneficiate The inspection team noted that the the tin ore it mines in Isingiro district. company is compliant with its royalty Richard Gunn, the General Manager, obligations which are charged on African Panther Resources said the stockpiled material but need to submit plant is intended to concentrate the tin monthly and quarterly returns on a ore to more than 70% purity and once regular basis. completed, will be one of the largest These findings were made by a team tin processing plants in the Eastern and from the Ministry of Energy and Minerals Central Africa. under the Mineral Wealth and Mineral The company has also implemented Development (MWAMID) project during mineral certification to provide the four inspections they conducted as part necessary assurance to international of the project. Steel Rolling Mills has failed to explore bodies that minerals are not sourced and mine for iron ore on a license it from conflict affected areas. The team inspected the operations and holds in Kabale district. noted that Rio Tinto had discovered The company employs 600 Ugandans The Ministry of Energy and Minerals has from Kikagate and Isingiro areas. 54.9MT of vermiculite, but under recommended that operations should Namekara Mining Company (formerly The Ministry inspection team instructed Gulf Resources) conducted reverse be suspended until the legality of the the company to submit periodic reports operation is sorted out. circulation and core drilling resulting to DGSM regarding their operations in into an estimated reserve of 49.9MT. During an inspection by the MWAMID time to enable the Government carry out performance evaluations. project, the team found a medium scale The company suggested that the iron crushing plant at the mine site. The The team also recommended that the Directorate should consider issuance company produces an estimated 100 company be assisted by the state to of quarterly export permits to avoid tons of crushed material per day and acquire a transformer to attain the bureaucracy and delays in export of the buys iron ore from the Artisanal and required supply of electricity. mineral products.
The Uganda Chamber of Mines & Petroleum 41 Greenstone settles with artisanal gold miners
April and August 2015, but resumed investigations and design of an open pit production on September 5, 2015 after mine. the ban was lifted Greenstone was told to immediately The company conducts three shifts per institute mechanisms to have production day and possess a 3 tonne/hour milling statistics dully filed and ready for plant that works for 24 hours. inspection at any time. The company is presently mixing village The Ministry team also wants the artisanal tailings with run-off mine company to carry out an environmental material (stockpile) in order to meet daily audit for tailings and the waste water production needs. The underground treatment plant according to the mining ollowing the lifting of the ban on workings cannot presently sustain law and should keep records describing export of raw ores, Greenstone production, hence the use of tailings. how far their operations conform to Resources resumed operations and the approved environmental impact F The total number of employees is 67, of assessment. This information should be presently they mine 1.76g/t of gold with which 58 workers are Ugandans working availed to both DGSM and NEMA. a cut-off grade of 0.9g/t. Greenstone at the plant. Five Ugandans work at the Resources holds a license (ML 4128) to engineering section and 11 Ugandans Furthermore, the company was asked to mine gold and silver in Busia district. work at the underground mine. revise and update their feasibility study During inspections by the Ministry, it indicating a detailed appraisal of the The company stated that they had arrived deposit and reflecting amendments to was discovered that production statistics at a mutual agreement with landowners were not readily available. their programme of development and and artisanal mining groups on the scale mining operations as introduced under The inspection team noted that due to of operations for each group. sections 43(3) (c) and section 48 of the the ban on export of raw minerals the The company has contracted Shaft Mining Act 2003 respectively. mine had ceased operations between Sinkers to carryout geotechnical site
• RAB DRILLING • AIRCORE DRILLING • RC DRILLING • DIAMOND DRILLING
ADT AFRICA LIMITED Plot 7, Spring Close (Off 5th Street), Industrial Area, Bugolobi. P.O.BOX 1023 Kampala, Uganda Tel: (+256) 414 221565 Mob: (+256) 782 660926 Email: [email protected] www.adtafrica.com
42 The Uganda Chamber of Mines & Petroleum Tororo Cement Growth Continues Apace he addition of ultramodern Growth Path cement-grinding, storage and electronic Ttechnology, cement grinding mills, packing system. rotary packers and storage silos last year Tororo Cement Ltd’s owners gave the may have taken Tororo Cement Limited company its present name after acquiring The first phase is in under construction, (TCL) annual production capacity to it in 1995 from the Government of installation with an investment of $25m. 1.8 million tons but the company is still Uganda. A carefully executed staff This is to increase of Cement grinding looking at expansion. recruitment drive coupled with well capacity to 3 million ton from 1.8 Million tested operational strategies has seen P.A. with packing, storage and feeding The Company is focusing on a production the company emerge as the leading system. The expansion is likely to be capacity of 3 million tons while and largest manufacturer of cement in complete by March 2017. In the second simultaneously undergoing detailed Uganda over the years. phase, an investment of $200m in a mineral prospecting and exploration for clinkerization plant of 4,500 ton per day its second phase of expansion - $200 TCL has not limited itself to producing will be made. million to expand its Cliknerisation only cement – albeit various types – it also facility. manufactures and distributes numerous Challenges construction materials like corrugated Operating in the districts of Tororo iron sheets, nails, chain link and barbed High foreign exchange conversion costs (manufacturing) and Kapchorwa and wire under the reputable brand Nyumba. paid on the many imports needed in Moroto (mining), the company has the production of cement, undedicated been keen to keep on the right side of The high quality of its products, which electric power and a dearth of the country’s mining and environmental has since attracted UNBS and ISO skilled manpower and other support regulations. certification, has seen the company infrastructure continue to slow the build a huge customer base across the company’s progress. The quality of the With an ISO accreditation 9001 -2015 East African landscape in addition to the limestone deposit is also disappointing and 14001 -2015, Tororo Cement is the Democratic Republic of the Congo and of late. The viability of cement plant is first in Uganda to launch an Integrated South Sudan markets. on “bulk mining” with consistent quality. Management system in quality with clean The usual life span of the Cement plant environment. NEMA has recognized and These expansion and upgrading projects is 50 years and availability of quality awarded the Company for its adhering have happened in phases. Since 1995, limestone-(Minimum of 5000-6000 to best emission and clean environment TCL has invested more than $150m to tons per day) 75 Million ton is required operations. upgrade the clinkerzation plant and to essentially expand (with updated technology) the
The Uganda Chamber of Mines & Petroleum 43 Tibet-Hima on the Spot Over Kilembe Concession after over 30 years in limbo, through a $175m investment. It was also to invest $16m in further exploration with a view of increasing the current known ore reserves of 4.50mt of Cu and Co to economic quantities under CRIRSCO compliance format and therefore sustain the mine for another 25 years or more. The consortium was also to rehabilitate the entire mine infrastructure from 3300 level to 6800 level, restore the Concentrator Plant by replacing all the floatation cells and replacing all the old mills with new modern mills in order to produce more than 24,000 tons per annum of copper concentrate containing between 25.5% - 30.0% Cu at a recovery of 92% and Cobaltiferous Environmental Impact Assessment report pyrite concentrate containing 1.40% Co fter a June visit to Kilembe copper a while back, demonstrating that it had at a recovery of 79%. mines, an inspection team from gotten a solution for the disposal of its Other agreements included setting up a Athe Directorate of Geological tailings. smelting plant in Kasese to produce 99% Survey and Mines (DGSM) gave Tibet “NEMA was unhappy with the stockpiling copper plates, setup a tailings processing Hima Mining Company Ltd (THMCL), the plant to concentrate the tailings in the concessionaire holder a thumbs down. of the tailings in open pits though we had plans for sealing it off like had been the dams from 0.114% Co. to 1.35% Co. in DGSM noted that the Chinese consortium order to feed Kasese Cobalt Plant. was found to be in breach of almost all case before the floods. We have since the pacts apart from rehabilitating the built a 3km long pipeline to deposit Tibet-Hima was also to rehabilitate Cobalt Concentrator Plant; where it had the tailings in the old approved site in Hima Lime Works in order to have lime imported and fabricated on site flotation Mburakasaka,” noted Kwatampora. to be used in the Concentrator plant cells, installed a 1,500 ton per day ball By April 2016, at least 2000 tons of for pH control amongst other general mill and accessory spiral classifier. It had copper concentrate (25%-30% copper) agreements on HSE, royalties, CSR, local also renovated one of the two existing had been produced by the company, content and the like. thickeners, renovated one of the six before NEMA’s environmental concerns A concession fee of $1m per year may existing crushed ore bins or tanks, and halted procedures. prove to be too much for the company installed a new vacuum concentrate going forward. Already $250,000 filtration unit. Tibet-Hima is also in the final stages of agreeing a power-purchasing agreement has been paid this year according to The company was ordered to meet with the Electricity Regulatory Authority Kwatampora, with some of the rest going its obligations under the concession to upgrade the Mubuku I Hydropower to clearing an old debt Kilembe Mines urgently. dam from 5 MW to 12.6 MW and Limited owed power distributer Umeme (UShs542m). In response however, Tibet-Hima says finally to 17.6 MW, as was agreed in the operations are on course and it will soon concession. “We hope we can convince the respond to the Directorate in detail, In the agreement Tibet-Hima signed government of Uganda to reverse this demonstrating exactly what it has been with Uganda in September 2013 it clause as it is not sustainable currently, up to. The report will be due in 6 months committed to reviving copper mining at when a lot is being spent on exploration,” from August, 2016. the Kasese, Western Uganda based mine he added. According to Alex Kwatampora, the consortium’s project manager at Kilembe, THMCL has only recently discovered 6 blocks of high grade copper anomalies in the Nkenda Prospects and more is likely to be found in the highly promising Bukangama West, as the exploration drive continues. “We have just imported four drill rigs for deep drilling to ascertain the reserve quantities. The first drill is already in Kilembe,” he said. The company was also awaiting a Waste Disposal Permit from the National Environment Management Authority (NEMA) after handing in an
44 The Uganda Chamber of Mines & Petroleum Formalisation of Artisanal Mining is Urgent
Mubende gold-rush village
ganda’s Artisanal and Small Scale active artisanal and small scale mining, humans and animals in the area. Mining (ASM) sub-Sector should there is good recovery of gold from the U “Mine accidents are on increase as a be formalized and regulated to bring quartz-hematite veins in Mubende and result of poor mining practices,” a part positive and sustainable contribution to Singo areas. the economy. of the study reads in part. “The use of HSE Concerns mercury and cyanide in gold recovery is Artisanal mining especially for gold is health harzard and should be discouraged However, the study warns that the rampant in the Mubende and Singo areas or else safety precautions should be unregulated artisanal miners’ activities in central Uganda employing hundreds taken.” of thousands of people working in poor have led to the destruction of the conditions and unleashing degradation environment whereby miners are using According to Data, the sector should on the environment. crude methods in the search for the gold. be brought under regulation. “There is bound to be serious environmental According to a study titled “Illegal Artisanal mining is the most basic form impacts and health issues related artisanal & small scale mining in of mineral extraction where miners use to pollution of streams and rivers of Mubende and Singo” that was carried out basic tools like pick axes and shovels. Mubende,” reads the report. by Gabriel Data, a Principal Geologist, at There is very minimal investment in the Directorate of Geological Surveys and machinery at the onset. The study recommends that given the Mines (DGSM), there is no doubt that area’s productivity, the mining of gold Small scale mining is a notch higher. Such economic deposits of recoverable gold in the area must be done in accordance mining operations have basic machinery occur in the region. with the law. like power drills and small generators. The DGSM is the technical arm of Combined they are referred to as “Proper mineral rights have to be the Ministry of Energy and Minerals Artisanal and Small Scale Mining (ASM). obtained from the relevant authorities Development, responsible for mining. to avoid future problems with the State It says that if the situation is not brought The study was carried out through the of the Republic of Uganda,” the study under control, restoration of the Mineral Wealth and Mining Infrastructure reads in part. “This confirms urgent need environment will cost the taxpayer a lot Development (MWAMID) a project under to formalize the ASM and if need be the of money in a few years. the DGSM. As part of its activities, the illegal miners.” project monitors and assesses the impact However, as artisanal miners continue Because the sector employs thousands, of artisanal mining across the country in to dig up the ground unregulated, the if managed properly, the state can as well general. hundreds of mining pits and holes that directly feel the impact in the treasury have already been dug are a menace to The study goes on to say that from the and on the economy.
The Uganda Chamber of Mines & Petroleum 45 According to Jonny Sasiirwe, the long serving chairman of the Uganda Artisanal Miners Association, formalization and legalization of the artisanal miners’ activities continues to be the major objective of the association from inception. However, he feels their struggles are not fully appreciated by the state authorities. “We are very okay with being formalized and regulated as this can ensure we adhere to the right health, safety and environment regulations,” says Sasiirwe, “However, the state authorities are not paying much attention to us, despite our great contribution to the economy.” He says that despite being derided as speculators, the artisanal miners are the “sniffer dogs” that lead the companies to where the minerals are. Hence aiding them with soft loans the same way farmers and other commercial industries are helped by the government could go a long way in growing the Uganda’s mining industry. “Just UShs10m ($3,000) to every group The study covered and identifies gold The Ministry is developing a strategy to of 100 artisanal miners, can help them mining and trade camps in eight sites in register, formalize and regulate the ASM. assemble a plant and acquire basic tools Mubende and Singo gold fields namely: Ignored? to mine up to 1kg of gold a week. These Kayonza, Bukuya, Lugigi, Masaka, are much more and quicker revenues Kamelenge (coded as Kampala), Kapya, than from any other commercial activity Walukwago, Kabaada and Kayimbirimbi. the state is supporting,” he reasons. As it is, gold mining and trade in the Tanzania Lessons Mubende area, which has been on for As Uganda grapples with the problem the last five years has become even more and readies to regulate the sub-sector, rampant and is characterized by invasion Tanzania is recognised around the world of other licenses; illegal mining, trade as a success story in managing and and bribery; environmental degradation; developing the Small Scale Mining (ASM) health and safety hazards; insecurity and sub-sector. vagrancy; social disorder; and migration of people. In another report on a study trip to Tanzania’s Artisanal and Small Scale It is estimated that the number of sub-sector, which was to benchmark, Ugandans directly involved in ASM has share and learn from Geita Gold Fields’ doubled in the last three years to an experience and success story, Uganda estimated 400,000 in 2015, with another is picking up mining lessons from its 1.5 million indirectly benefiting from southern neighbour. artisanal and small scale mining activities. Participation in the trip has enlightened Globally, ASM occurs in over 80 countries the Ugandan delegation on technical, and employs 30 to 50 million miners (90% structural, legal and economic issues of the global mining workforce) concerning small scale mining. Uganda is currently in the process of The Ssingo Artisanal Gold Miners reviewing its Mining Policy and Mining Association established collaborations legislations. The small scale mining sub- with the mines visited and plans to sector currently constitutes 90% of the invite miners to train them in mining and mineral sector employing a large number processing of gold. of people mainly from the rural areas. The organizational structure and The Government plans to integrate the relationship with employees are other ASM sub-sector for it to operate and qualities admired from the mines. The contribute towards the national economy Jonny Sasiirwe, chairman of the Uganda importance of registration and operating and livelihoods of the communities living under the law was expressed. in the mining areas. Artisanal Miners’ Association
46 The Uganda Chamber of Mines & Petroleum Design of Earthquake Research facility takes off
he Mineral Wealth and Mineral Development (MWAMID) project Thas initiated the procurement of a consultant to design an Earthquake Research Facility in Entebbe and the construction of a regional office and mineral beneficiation centre in Moroto. A team from DGSM conducted verification on the status of land in Fort portal and Ntungamo that was originally earmarked for the construction Exploration design, of a regional office and mineral execution and management beneficiation centres under the SMMRP. to resource development The facility in Entebbe and the other that Geological, Regolith and will be built in different upcountry towns structural mapping are part of the MWAMID project. East African Geological reporting (JORC The project is aimed at strengthening the Geological Services and N143-101 requirements) mineral sub-sector in the areas of mining legislation, geological data acquisition, mineral assessment, capacity building and management of geo-scientific data, promotion of value addition and mineral trade and earthquake research. Among the key objectives of MWAMID are: construction and restoration of earthquake research facilities and monitoring network stations, construct four mineral beneficiation pilot centers and strengthen institutional research capacity in geosciences, mining and develop mineral value addition skills of the youth to fully participate in extractive industry. Under the period that is being reviewed, the Directorate conducted investigation Come to our stand and we shall of status of land in Gulu and the team demonstrate to you our XRF Capabilities noted a new development on the Plot on your selected mineral samples 4, Bere Road Gulu Municipality ear marked for the Directorate of Geological PLOT 2215/2217, Azam Road, Surveys and Mines in Gulu without the Bweyogerere Kazinga. knowledge of the Directorate. P.O.BOX 1023,Kampala. The project is fast tracking the Tel: 0414221565 Mob:0751796283 procurement for a contractor for the construction of Karamoja Regional Office www.eageoservices.com Email:[email protected] in Moroto Municipality, Moroto District and the evaluation of bids is on-going.
The Uganda Chamber of Mines & Petroleum 47 How mineral certification will unlock Uganda’s potential
By Stephen Turyahikayo
n December 15, 2010, Uganda alongside eleven member states of the International Conference on the Great lakes Region O(ICGLR) signed the Lusaka Declaration that set in motion the implementation of regional certification mechanism (RCM). The purpose of the RCM tool is to facilitate responsible and conflict free mineral supply chains from the Great Lakes Region and applies to all ICGLR Member States. The minerals targeted by RCM remain tin, tantalum, tungsten and gold. Key components of the RCM system are:
Step 1: RCM has to be integrated into the mining legal publicly accessed. A process is ongoing to establish and framework. The process is ongoing and a statutory operationalize the database. instrument is being finalized for this purpose. Step 7: Third party audits are required across entire supply Step 2: Mine sites are to be inspected and qualified into Green, chain to confirm it has remained compliant. It is through Yellow, and Red. Only Green and Yellow mine sites can these audits that exporters are monitored to ensure produce for export. Government mine site inspectors they comply with the RCM standards and hence can have been trained and an RCM mine inspection template export. Third party auditors are available and accredited drafted for this purpose. by ICGLR audit committee. Step 3: A robust system is required to track all production at the On December 15 2012, the ICGLR certificate technically became mine sites and all along the supply and transportation a mandatory requirement to accompany all exports of tin, route to the point of export to eliminate any tantalum, tungsten and gold originating from the great lakes contamination of conflict free minerals. Data collected region of Africa. It is through implementing the above steps by the system remains the property of the ICGLR that Uganda will be considered fully compliant with the regional Member State which routinely transmits it to the ICGLR certification mechanism. regional database. Chain of custody and tracking service providers have been welcomed in Uganda and at least 2 On an international scene, minerals supply and trade is rapidly have set up and tested their systems. evolving to accommodate best practices and responsible conduct. Some of the related initiatives include: 1) United Step 4: The Member State bears the responsibility to produce States Dodd Frank Wall Street Reform and Consumer Protection and put in place a mechanism for issuing ICGLR Act, section 1502 on conflict minerals and corresponding SEC certificates. An ICGLR certificate once issued is valid for rules; 2) OECD due diligence guidance for responsible supply 90 days and serves as proof of conflict free status for the chains of minerals from conflict-affected and high-risk areas; 3) tin, tantalum, tungsten and gold being exported. European Union initiative on responsible mineral supply chains and related legislation under consideration; 4) China Chamber Step 5: The Independent Mineral Chain Auditor (IMCA) who of Commerce Metals, Minerals and Chemicals (CCCMMC)-due is based at ICGLR secretariat in Bujumbura is tasked to diligence guidelines for responsible mineral supply chains etc. continuously review processes 1-4 in all Member States to ensure they comply with the RCM standards. In conclusion, this paradigm shift in global mineral supply and trade calls for urgent implementation of the regional certification Step 6: A regional database is to maintain record of the conflict mechanism as a gateway for Ugandan produced tin, tantalum, free mineral flows within the great lakes region. tungsten and gold to access and remain competitive in both the This database will be based at ICGLR secretariat in international and regional markets. Bujumbura and Member States are required to transmit production and export statistics that will feed into the The writer is a Mineral Certification and Due Diligence Expert system and be regularly updated. This database shall be
48 The Uganda Chamber of Mines & Petroleum Women miners in Uganda prepare for takeoff
omen in Mining Uganda Chapter (WIMUG) is seeking Wfunding for its activities, which if successful will see the body become fully-fledged to among others empower women to fully embrace and responsibly benefit from Uganda’s mineral sector, which is experiencing a recovery. WIMUG was launched in Uganda under the Uganda Chamber of Mines and Petroleum (UCMP) by Peter Lokeris, the State Minister for Mineral Development and Ms. Melody Kweba, President, African Women in Mining Association during the annual Mineral Wealth Conference 2015. The organization’s mission is to promote the role of women in Uganda’s mineral sector through sharing knowledge and experiences for economic empowerment and extension of professional network. The primary objective of WIMUG is to create an empowering network to inspire, support and develop the progression of women working in Uganda’s mineral sector through mentorship, specific-capacity building initiatives for skills development, education on women rights and their responsibilities in the sector. WIMUG also aims to create gender balance in the sector, promote and increase the role of women in the sector, create a network platform, increase the number of women at both technical and high level managerial/ decision-making positions and to create an opportunity for their (women) showcase on the global platform. For members who join the chapter, benefits include having a clear voice for women in the mineral sector, representation regionally, nationally and globally. Other benefits are an opportunity to share information on industry-related issues as well as networking opportunities. Membership is free and open to all women who are active or interested in the growth of Uganda’s mineral sector. WIMUG is purely run on voluntary basis and membership is open to women entrepreneurs, mineral dealers, miners, professionals (geologists, engineers, HSE, and conservation specialists etc.) working in both the informal and formal setting in Uganda’s mineral sector. As part of activities to prepare for takeoff, WIMUG plans to create a website link under the Uganda Chamber of Mines and Petroleum (UCMP) main website to display events, meetings, reading material and newsletters. WIMUG has also planned training workshops in HSE and human rights. It also plans to hold a National chapter forum involving all stake holders (department of mines, Department of Labour and gender, politicians, UIA, NEMA, UNBS, and Activists etc. WIMUG is also planning regional capacity building seminars and creation of regional subcommittees and small women groups and reconnaissance field visits and distribution of PPE to some groups.
The Uganda Chamber of Mines & Petroleum 49 Busia Artisanal Miners Get Alternative Life Skills
n Uganda, artisanal and small scale Uganda Project has started a campaign mining is estimated to directly to increase awareness and support benefit more than 190,000 women artisanal gold miners of Siyanyonja The reality, Iand men miners. Of these, at least and Tiira villages to ensure they are 50,000 women and men are involved in adequately prepared and cushioned however, is that artisanal gold mining activities. Busia for the post mining era. District is among the artisanal gold natural resources mining epicenters in Uganda. The Foundation primary objectives Since 1930, the communities of Tiira are: to offer technical advice extension are finite in nature and Siyanyonja in Busitema subcounty to artisanal miners on economic of Busia District have relied on artisanal livelihood diversification, working with and over time gold mining for their economic artisanal miners to identify appropriate livelihood. More often than not, natural alternative income generating they get depleted. resource dependent communities activities, to support and guide miners possess an erroneous impression that to adopt the identified alternative these natural resources shall be at their income generating activities and to Worse still, the disposal forever. initiate and promote a culture of saving among the artisanal miners. communities in This has sometimes shaped the path to destructive mining practices. In March and April 2016, artisanal gold most cases are The reality, however, is that natural miners in Tiira and Siyanyonja received resources are finite in nature and over a donation of goats as a beginners unprepared for the time they get depleted. Worse still, boost to their household incomes. the communities in most cases are Additional investment opportunities post mining era unprepared for the post mining era. are being developed together with the artisanal miners and some of Based on this background, Earthbeat these include projects in apiary, Foundation through their Heartbeat agroforestry and farming etc. In early
50 The Uganda Chamber of Mines & Petroleum 2017, the Heartbeat Uganda initiative will train and empower artisanal miners to acquire the necessary skills to start and operate profitable and sustainable community based bee keeping and honey business.
In conclusion, artisanal mining is among the contributors of employment opportunities in rural Uganda. However, the finite nature around natural resources ought to shape great responsibility on the miners during extraction and beneficiation process. The economic behavior should reflect confidence amongst them to survive the post mining era. Together, let us spread the message far and wide to all artisanal miners to understand that natural resources eventually get depleted. Therefore, a saving culture and investment in alternative income generating activities is a must for them to survive the post mining era.
Stephen Turyahikayo, Partner Earthbeat Foundation, www. earthbeatfoundation.org Sipa’s prospects in Kitgum improve
Sipa finalise exciting new W.A prospect and prepare for drill campaign
hings are looking up for Sipa disseminated mineralization we have Uganda, with its main targets being the Resources Limited, an Australian- seen to date…” Akelikongo, with its potential for nickel based exploration company, at and copper, and the Pamwa hill that has T The company is prospecting for nickel, its Kitgum-Pader base metal project a zinc lead silver system. copper and zinc in the Akelikongo area. in the northern part of the country In a progress report that the company after the company announced in mid The company noted that “these higher issued recently, it said: “An independent September that it was resuming drilling grade zones are interpreted to represent review of the Akelikongo mineralisation after encouraging results from earlier the high-grade basal position of the and exploration model, commissioned investigations. Akelikongo Ultramafic Complex, and lie by Sipa and conducted by CSA Global at the footwall of the wide and shallow Results from a drilling programme in Pty Ltd has provided strong affirmation zones of disseminated sulphides. This the area, which was conducted in May, regarding Sipa’s exploration approach basal position is typically where massive showed that the company is holding a at Akelikongo. A key conclusion of the sulphides form in large nickel-copper mineral-rich license. review was that the nickel tenor is of systems and represents a priority focus good quality and should be pivotal in the According to Lynda Burnett, the for on-going drilling. further discovery of massive sulphide managing director of the company, Sipa holds more than 6000sq km of material.” the survey revealed “some of the exploration tenements in northern most significant broad intercepts of
The Uganda Chamber of Mines & Petroleum 51 Canadian firm widens interest in Kitgum, Mityana minerals
new report by Consolidated Africa low lithium grades, although a grab firstly trench and sample the identified ALimited, released in July, shows that sample from the nearby Nampewo mine, targets. The samples will be tested for the company is considering widening located outside the license area, had a flake distribution size and defined into its search for graphite in the district fine grade of lithium. categories showing the large and jumbo of Kitgum after a helicopter-borne flake size,” Philip Lindsay, the company “This indicates that the pegmatites of geophysical survey noted that the area chairman, said in a statement. Nampewo Hill and the surrounding could hold more reserves than earlier areas contain potential for lithium The company noted that the helicopter anticipated. mineralisation, even if it was not detected was rigged with sophisticated technical “As the graphite occurrence is locally at surface,” the company noted. equipment capable of producing high- continuous, it is also likely to continue resolution data both at near surface and Still, it is in Kitgum that Consolidated further eastwards and will be further at great depth. Africa Limited intends to place a lot more investigated by surface mapping,” the focus. The company said it “discovered The data assessed, it has turned out, company’s July report notes. an extension of the graphite occurrence came out promising, according to the To be sure, the Canadian firm has applied and have applied for an exploration lease company. for an exploration license over a new over this new area. The new area is to the However, it is still unclear whether area after the survey it undertook in East of the existing lease and is on ground Consolidated Africa Limited has the May found an “extension of the graphite that is generally flat and amenable to financial capacity to develop the graphite occurrence” in the area. trench work and drilling,” the company in Kitgum – 400km north of the capital announced in June. It is not only Kitgum that Consolidated Kampala. The company said that it was Africa Limited has set its eyes on. In early May, a helicopter carrying a “finalising a small placement that will The company recently entered into a team of geologists flew more than 90km sustain this current work program” on memorandum of understanding with around Kitgum in northern Uganda as Orom. It did not say how much it was Uchimba Investments Ltd to acquire an Consolidated Africa Limited started looking to source. It has, however, noted exploration license that would allow it assessing the mineral potential of the that it cannot give any assurances that it search for lithium in Mityana. The value Orom area, where it holds a license to will achieve commercial viability through for this transaction is valued at $40,000. prospect for graphite. the exploration, development and mining of the Orom project. On the Mityana deal, Consolidated Africa Consolidated Africa Limited, which Limited contracted a geological team of completed the acquisition of Consolidated Africa Limited said they are Minrom from South Africa to investigate Consolidated Africa Resources Uganda keeping their faith in the Orom project the Nampewo lithium pegmatite to Limited in March this year, said the because demand for graphite is “expected assess its resource viability. helicopter-borne geophysical survey was to dramatically increase during the next meant to show the targets that can be ten years, due in part to the increasing According to what the South African drilled for graphite. production of the Li-ion batteries.” team discoveredfrom the short area it assessed, all the samples from the “Our objective is to take the analysis The company was incorporated on May exploration area in Nampewo contained from the air geophysical survey and to 5, 2015.
52 The Uganda Chamber of Mines & Petroleum UCMP MEMBERS 2015-2016 Canadian Chamber Diamond Members firm widens COMPANY CONTACT PERSON SECTOR Tullow Oil Ltd Mr. Abdul Kibuuka Oil and gas exploration and production CNOOC Uganda Ms. Chai Wei Oil and gas exploration and production interest Total E&P Uganda Ms. Ahlem Friga-Noy Oil and gas exploration and production Bank Of Africa Ms. Sarah Muhaise Banking House Finance Bank Ms. Judith Owembabazi Banking in Kitgum, Zakhem International Construction Ltd Mr. Peter Bitarakwate Oil and Gas Infrastructure Chamber Gold Members Mityana COMPANY CONTACT PERSON SECTOR DFCU Bank Mr. James Mugabi Banking Orient Bank Mr. Kenneth Kisambira Banking minerals Hima Cement Ltd Mr.Daniel Pettersson Cement Manufacturers Stanbic Bank Mr. Patrick Muheirwe Banking Standard Chartered Bank Ms. Cynthia Mpanga Banking
Lion Assurance Co. Ltd Mr. Newton Jazire Insurance United Bank Of Africa(U) Ltd Ms. Sarah Muhaise Banking
Barclays Banks Mr. Gibson Nangono Banking
Roofings Group Mr. Stuart Mwesigwa Steel Manufacturing
Centenary Bank Mr. Fabian Kansi Banking Mr. Benson Ndungu KPMG Audit, Tax and Advisory
AERSUD Uganda Ltd Mr. William Mutlow Mineral Trading & Mining
ENS AFRICA Mr. Alex Kibandama Law Firm
Mukwano Industries Uganda Ltd Mr. Ali Reza Manufacturing
Sebalu & Lule Advocates Mr. Nicholas Ecimu Law Firm Tibet Hima Mining Co.Ltd- Kilembe Mr. Alex Kwatampora Copper Mining Mines UHY Thakkar & Associates Mr. Sam Thakkar Tax Advisory Accounting
International Energy Technik(U) Ltd Mr. Dinanath Yadav Electrical Engineering
G.E Oil & Gas Mr. Adrian Bukenya
Uganda Development Bank Patricia A. Ojangole Banking
Chamber Silver Members COMPANY CONTACT PERSON SECTOR Agility Logistics Mr. Lakshimi Narasimba Logistics AON Risk Services Ms. Caroline Athiyo Insurance and risk management AUC Mining Mr. Moses Masagazi Gold Mining BTS Clearing & Forwarding Ms. Merian Sebunya Clearing & Forwarding Greenstone Resources Ltd Mr. Nimit Patel Gold Mining
The Uganda Chamber of Mines & Petroleum 53 COMPANY CONTACT PERSON SECTOR AIG Uganda Ltd Mr. James Mugaru Insurance Citibank U Ltd Ms. Bagorogoza Clare Banking Civicon Limited Mr. Nick Dames Mechanical & Civil Engineering Works Deloitte U Ltd Mr. Tallarovic Matthew Auditors Custom Clearance, Heavy Equipment Eagle Logistics Solutions Ltd Mr. David Walabyeki Hire East Africa Chains U Ltd Mr. David Mayanja Dealers in mechanical tools ORTEC Group Ms. Michele Ottria Lifting Services Epsilon U Ltd Mr. Moses Kayemba Waste Management Ernst & Young Mr. Muhammed Ssempija Auditors Farm Engineering Industries Mr. T.S Padhaal Equipment Supply Flemish Inv.Ltd Mr. Bruce Milne Mineral Exploration Facilities Maintenance & Catering GCC Services (U) Ltd Anita Atwine Services Goodlife (U) Ltd Mr. Shem Nnaggenda Training Services Namekara Mining Company Mr. Henson Mambo Mining Halliburton International Inc. Ms. Natasha Epenu Oil & Gas Services Schlumberger Oilfield Mr. Denis Bonifay Oil & Gas Services Kampala Associates Advocates Mr. David Mpanga Law Firm Krone (U) Ltd Mrs.Rose Rugazora Mineral Exploration/Wolfram ABMAK Associates Mr.Denis Kusaasira Law Firm Llyods British Testing Mr. Andrew Davis Inspection, Training & Assessment Marsh Uganda Ltd Mr. Latimer Mukasa Insurance & Risk Management Askar Investments Ltd/Askar Security Mrs. Kellen Kayonga Mineral Exploration/Tantalite Multilines International Ltd Mr. Gerald Mukyenga Clearing and Forwarding Astor Finance Plc Limited Mr. Gordon Sentiba Micro Leasing and Financial services Oil gold Muruli Ltd/ Gold Empire Ltd Mr. John Muruli Gold Exploration Ogas Solutions Mr. Patrick Danaux Recruitment And Training Pricewaterhouse Coopers Limited Mr. Francis Kamulegeya Auditing, Tax and Advisory Richflow Lift Services Mr. Richard Magezi Lift Services Bollore Africa Logistics Ms. Nancy Kiconco Logistics Service Provider Semiliki Rift Trading Co Mr. Patrick Van Pee Lift Services and Ferries Sino Mineral Investment co Ltd Ms. Sarah Namara Mineral exploration Specialized Welding Mr. Sameer Vyas Welding services Spedag Interfreight U Limited Mr. Dilip Bhandari Logistics service provider Threeways Shipping Mr. Jeff Baitwa Logistics Service Provider Toyota U Limited Mr. Mahmood Omar Car Dealers Uganda Insurer Association Mrs. Faith Ekudu Insurance Union Logistic Mr. Hitesh Shan Clearing & Forwarding Victoria Equipment Limited Mr. Peter Sekandi General Machinery Victoria Motors Limited Mr. Dickson Mwesigwa Car Dealers Woodmore Energy Consultancy Ltd Mr. David Kayemba Oil and Gas Downstream British High Commission Mr. Eric Olanya Diplomatic Mission Critical Mission Support & site Janus Global Operations, Inc Mr. Norbert Rugunda Restoration Services Let’s Go Travel Mrs. Joan Kantu Else Tour and Travel
Achelis Uganda Ltd Mr. Hans Georg Hinterberger Equipment sale & Rental
54 The Uganda Chamber of Mines & Petroleum COMPANY CONTACT PERSON SECTOR Pearl Engineering Company Limited Mr. Gumirisa Birantana Construction Enviroserv U Ltd Ms. Jennifer Bangirana Waste management Goldstar Insurance Co.Ltd Mr. Paul Kavuma Insurance UAP Insurance Uganda Ltd Ms. Ruth Nduhukire Insurance Unifreight Cargo Handling Ms. Jennifer Mwijukye Cargo Handling First Mining Company Ltd Mr. Dorde Grujic Mining The Mining Co. Ltd Mr. Barnabas Taremwa B Mining Gras Savoye Uganda Insurance Brokers Mr. Denis Odongo Insurance Ltd Sipa Exploration Uganda Ltd Ms. Natasha Venus Mining Sheraton Kampala Hotel Hospitality Beta Projects Ltd Mr. Nelson Mugenyi Procurement & Consulting ADT Africa Exploration Drilling Services Mr. Ben Vietnieks Exploration Drilling Services Tower Resources Plc Mr. Rashid Mugabe Oil and gas exploration and production Airborne Geospatial Data Acquisition, Aerophoto System Engineering Co Mr. Nalukoola Muwanga Aerial Photography, Surveying, Mapping East African Gold Hon. Richard Kaijuka Mineral exploration Megha Minerals Mr. Sikander Meghani Mineral Exploration Capital Law Partners Mr. Ronald Asiimwe Mitegyeko Construction, Warehousing. Camp Mineral Services Ltd Mr. Edward Kabuchu Building, Motor Vehicle Support Kenfreight Mr. Amos Dwoka Freight Services Velosi Corporate Services Mr. Willie Rankin Asset Integrity Management Simba Mines and Mineral Resources Ltd Mr. Johnny Sasirwe Mining Mantrac Uganda Ltd Mr. Walid Hassan Caterpillar Products Tororo Cement Limited Mr. Gagrani B.M Cement Manufacturers Beta Minerals Ms. Jennifer Hinton Mineral Exploration TransAfrica Assurance Company Limited Mr. Madhav Kumar Insurance Ligormac Advocates Mr. Joshua Ogwal Law Firm Roads, Mining, Consulting, Traminco (U) Limited Mr. David K Kawooya Construction, Earthmoving Quantum Express Logistics Mr. George Odeke Freight Forwarding Logistics services Nangwala, Rezida & Co.Advocates Mr. James Nangwala Law Firm Niletrac Uganda Ltd Mr. Mark Davidson Dealers in plant & machinery Geotraciability Mr. Matthieu Guemas Mineral Traceablility Ssaka Transport Co. Ltd Mr. Rolland Mulindwa Transport & Logistics Fabrication of structural steel, Office fit Fabrication Systems(U) Ltd Mr. Kalpesh Mehta out, Otis lifts, Escalator installation & maintenance African Gold Refinery Mr. Alphonse Katarebe Gold Refining Afrofreight Clearing & Forwarding (U) Ltd Ms. Grace Tumukunde Clearing and Forwarding Transport, Logistics, Building Great Lakes Carriers Limited Mr. Assaf Natan construction and Civil works.
Chamber Individual Members
Name Specialty Mr. Minaz Karmali Businessman Mr. Brian Kaggwa Lawyer Mr. Rajesh Dewani Construction Mr. Joshua Tuhumwire Mining Mr.Rossini Silveira Oil, Gas & Renewable Energy Mr. Malkit Singh Saini Construction
The Uganda Chamber of Mines & Petroleum 55
3rd Floor, Amber House Plot 29/33 Kampala Road P. O. Box 71797 Kampala [email protected] www.ucmp.ug
APPLICATION FORM FOR MEMBERSHIP
To: The Executive Secretary, Uganda Chamber of Mines and Petroleum P.O. Box 71797 Kampala E-mail: [email protected]
I hereby apply for membership of the Uganda Chamber of Mines and Petroleum Company/Organization…………………………………………………………………….. Address:……………………………………………………………………………………. ……………………………………………………………………………………………… Telephone…………………………………………………………………………………... Contact person: …………………………………………………………………………….
Position……………………………………………..Telephone…………………………… E-mail: ……………………………………………………………………………………... Please provide a brief description of your company/investment, its size and its activities. Description......
Signature of Applicant: …………………………….…….… Date: ………………………
Your application will be considered by the Governing Council as soon as possible.
56 The Uganda Chamber of Mines & Petroleum The Uganda Chamber of Mines & Petroleum 57 58 The Uganda Chamber of Mines & Petroleum