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May 9, 2014

Chinese consortium to revive Uganda’s once-vital copper mines

Some houses at Kilembe that still stand despite recent flooding

A Chinese consortium recently won a concession to revive production at the Kilembe Mines in southwestern Uganda. The mines, which contain substantial deposits of copper and cobalt, stopped operating in 1982. With funding from the Wits China-Africa Reporting Project, Fredrick Mugira travelled to the mines to find out what the investment means to Kasese and Uganda.

by Fredrick Mugira

In their heyday, the Kilembe mines were the lifeblood of the Kasese District in southwestern Uganda, and accounted for a large part of the 30 percent that the mining sector contributed to total export earnings. However, production of copper and cobalt ore at the mines stopped in 1982 due to insecurity and a fall in copper prices.

The abandoned and dilapidated mines sit on the foothills of the Rwenzori Mountains, about 368km south of the capital Kampala.

After crossing a narrow bridge on River Nyamwamba, a pebbled road leads you uphill to an area described as ‘45 portal’, where the lower mines are located.  A steel tower used for crushing the copper ore stones hangs loosely above a large heap of stones. Four large tanks that were used to treat liquid waste from the mines sit still atop the lower mines. A rail of cable cars that carried miners in and out of the mines is stuck in one place.

With dozens of houses at the mines, Kilembe estate covers an area of about 8.5 kilometers long on the banks of River Nyamwamba and Nyalusegi stream. Life is relatively slow, and it is not until you get to Kilembe Hospital, owned and run by Kilembe Mines Limited, that you are drawn out of the gloom that comes with visiting the mines.

The main fuel station and post office are non-functional. Only a few shops and business centers remain of the once thriving town that seems to have frozen in time. Many structures have barely changed over the course of decades.

Chinese consortium takes over

Tibet Hima Industry Company Limited, a consortium of Chinese companies, is reviving copper mining in Kilembe after signing a concession agreement with the government of Uganda in 2013.

The firm is to invest US$175 million in the mines in the first three years, which will go to resuscitating smelting, refining, and product factory development. It also plans to increase power production at the Maluku power plant, one of Kilembe’s assets, to 12MW from 5MW.

According to the Uganda government, Kilembe had 4.17 million tons of copper reserves when it ceased production in 1982. In addition to the unexploited copper ore, there is 5.5 million tons of cobalt in tailings (dumped material from previous mining). The government also says there are additional copper reserves in the vicinity of the mine.

Lu Guo, the deputy chief executive of Tibet Hima Mining Co. Ltd, told journalists in Kampala at the announcement of the investment that they paid the Ugandan government a signature fee of more than US$4 million and shall pay an annual concession fee of US$1.5 million for 25 years – the duration of the concession.

Thousands of jobs to be created


Tinka Alex Kwatampora, a geologist and consultant with Tibet Hima Industry Company shows Chinese visitors around the Kilembe mines copper smelting plant

As a direct result of this investment, Lee Quinaguo, the company’s general manager says the mines are to offer more than 3500 direct jobs after the ongoing exploration process.

“Currently we are doing the rehabilitation and exploration process and after that, we shall start the mining and processing,” Quinaguo says.

Alex Tinka Kwatampora, Tibet Hima’s lead consultant, says that exploration is taking place in the areas of Kyalumba, Ihandiro, Kitholu, Muhokya, Rukooki, Bubara and Bukangara.

“According to the results so far obtained, the copper that exists is economically viable and can run the company for the next 25 years,” he says.

The company plans to renovate the mines and the houses which surround them.  “During the rehabilitation process we are also going to look at the property that we have inherited from government,” says Kwatampora.  “We shall renovate those which are not condemned and also demolish those that have been condemned.”

Currently, up to 300 people are employed in the mines as field assistants, working as causal labourers among other jobs.

Memories of the old mines

In the 1970’s copper production at Kilembe was one of the Uganda’s leading foreign exchange earners and provided employment to over 6,000 workers, according to Kwatampora who has lived in Kilembe for the last 40 years.

For about 12 years until 2002, Amos George Mfitebasaze was the General Manager of Kilembe Mines Limited (KML), a public company that was 99 percent owned by the government of Uganda and one percent by the Kingdom of Tooro. KML maintained the mines from 1975 until Tibet Hima Industry Company Limited was given the concession to run the mines.

“Even after stopping production, in 1990 the mines employed 1200 people. By 2000 we had 600 employees,” says Mfitebasaze.

Buhikire Bwakatahwire, a social worker, lived at the mines in mid-1960s. He was by then a secondary school student staying with his uncle who worked in the mines. Bwakatahwire says  that during the 1960s people employed in the mines lived fairly better lives.

“They had at least enough money to take their children to school, build better houses back at home, and their children are right now living good lives.”

“Several Bakiga (a Ugandan tribe) migrated from Kabale District to work in the mines. They were able to get money and educate their children. This is why Bakiga people are among the mostly highly educated Ugandans now,” Bwakatahwire says.

Bwakatahwire also cites the extension of the railway line to Kasese to transport copper to Jinja for smelting, and introduction of cotton as a cash crop as some of the benefits the mines brought to Kasese.

“If the old mines were able to bring all these developments to the region, then expect the new ones to more than triple them,” insists Buhikire.

Kasese to benefit too

The power dam that will be renovated to produce 12MW of electricity at Bugoye Sub County

The revival of the mines will bring several other benefits, not just employment alone.

The company plans to increase power production at the Mobuku power plant to 12MW from 5MW, increasing power supply to the communities living close to the mines.

The company will also pay royalties and other taxes as stipulated by the government in the concession agreement.

“We have started benefiting indirectly because the hotels where they (consultants and exploration experts) are residing in Kasese town pay local service taxes and when full production starts we shall also get royalties from them,” says Lieutenant Colonel Dura Muhindo Mawa, the Kasese district chairperson.

Guo says Tibet Hima is also considering taking over the management of Kasese Cobalt Company Limited (KCCL), which closed last year as a result of lack of raw materials. “You can’t run a cobalt plant when you don’t have raw materials. Now that we have the raw materials we are going to consider buying KCCL so that we can process our cobalt from that plant.” Cobalt is extracted from the sludge left after copper is extracted from the raw ore.

Pollution fears

However, there are fears that reviving the mines will cause pollution. Asiimwe Wilson, a Kasese-based journalist, says he has covered stories of pollution from the mines and fears that their revival could mean increased pollution in the area.

But Augustine Koli, the Kasese district environment officer says there should be no cause for worry. “We are working closely with the new company in the exploration process to ensure that what is taking place is environmentally friendly,” says Koli.

Funding for coverage of this story was provided by the Wits China-Africa Reporting Project managed by the Journalism Department at the University of the Witwatersrand. It was first published at People's Daily Online.


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