Chinese investor demands 30,000 metric tons of gold before reviving Kilembe mines

The Minister of State for Investment, Anite Evelyn, revealed that the contract for Tibet-Hima, the Concessionaire for Kilembe was cancelled, after the Chinese investor demanded to carry out of Uganda 30,000 metric tons of gold, copper and cobalt as samples for testing to China.

She made the remarks while appearing before Parliament’s Committee of Natural Resources recently, where she had been summoned to explain the slow progress in the revival of Kilembe Mines in Kasese.

“This contractor demanded from the Government that just for a sample, he needed 30,000 metric tons of copper, cobalt and gold. Just for a sample. It was very wrong in the wisdom of the contractor to think that we could allow him to take our God given natural resources to a magnitude of 30,000 metric tons and take it as a sample,” explained Anite.

According to the minister, the President said that these resources belong to Ugandans. However, the concessionaire Tibet-Hima said, if that is the case, they would not continue with the process of reviving Kilembe mines

“And we couldn’t allow them to give 30,000 metric tons of our natural resources, just to take as samples to China for testing. It couldn’t make sense, not to the President, not to me, not anyone in Government, and therefore we refused and that was the point of departure,” said Anite.

The minister clarified that due diligence was done and they opened up and discovered that this company had no capacity, hence what the government did to contract this concessionaire was wrong.

She said, “that is why we instituted the winding up commission and then terminated the contract. That was the sign that the concessionaire wasn’t up to the contract. We lost jobs, we lost the concessionaire fees, and we lost the opportunity of revamping Kilembe Mines to its past glory. So it is financial, material, social and emotional loss to Government of Uganda,”

Kilembe Mines

Kilembe mines is located in Kilembe, a suburb of the town of Kasese, in the foothills of the Rwenzori Mountains in the Western Region of Uganda. The mine is approximately 380 kilometers (236 miles), by road, west of Kampala, the country’s capital and largest city.

Fast-forward, on September 14, 2022, the Ministry of Finance, Planning and Economic Development appointed a new board of directors for Kilembe Mines Limited, the governing company for the mines. Hon. Sanjay Tanna, a prominent businessman and politician who was the former Member of Parliament for Tororo Municipality, was sworn in as the Board chairman, alongside Atwoki Gilbert Mujogya, Ruth Sengonzi, Semitala Nobert, Eric Chandiga and Hon. Loice Bira Bwambale, who all serve as Board Members.

Ministers Ruth Nankabirwa Sentamu and Evelyn Anite of the Ministry of Energy and Mineral Development and Ministry of State for Privatization and Investment, respectively, unveiled plans for the redevelopment of Kilembe Mines, which is expected to bring about industrialization, employment opportunities, and additional revenue.

With the new board leadership, several companies are expected to express interest in partnering with the government through a Mineral Production Sharing Agreement (MPSA).  The restoration of the mines and the process of procuring an investor is a significant step to achieve this goal, according to the government.

Kilembe Mines is known to contain reserves and resources of copper in ore and tailings, as well as potential for cobalt, copper, and associated base metals, making it a key element in the transition to clean energy. The current price of copper is between $ 10,000 and $ 10,500 per tonne