The Minister of State for Energy and Minerals, Sarah Opendi, has asked the government to investigate the administration of Kilembe Mines Ltd in Kasese district over allegations that machinery has been vandalized and sold as scrap.
Opendi made the remarks during her visit to the mines on Saturday where she discovered that functional tanks and pipes were taken by the company contracted to collect scrap from the area and manage the stores.
She noted that the stores which are supposed to keep samples picked during exploration are empty hence ordering the halting of scrap collection from the area until an investigation is done.
Modesto Kamate, the LC3 chairperson for Kilembe sub county told the minister that the company that was contracted to dispose of scrap has gone beyond its mandate and vandalized tanks and pipes that are in good working condition.
The Chief Executive Officer for Kilembe Mines Ltd, Fred Kyakonye, also confirmed that mineral samples are missing.
He noted that samples were collected and dumped by the company assigned to collect scrap, however, he denied claims that some of the samples were still functional.
The minister said the selling of scrap materials should be first halted to give room for investigation into the matter.
“Our instruction is that they should halt the sell of scrap because it seems, it is raising a big problem in the community. What is known as scrap is being left and the company is moving in the area and taking equipment that should not have been sold as scrap,” she said.
“So our instruction to the management is to halt any further sale of the scrap because this matter need to be investigated and concluded before they can continue,” Opendi added.
The government in 2017 cancelled the concession of Tibet Hima Mining Company Ltd, a Chinese consortium that had won the contract to revamp the mines about four years earlier saying the investor had caused financial loss to the government.
The Chinese were supposed to extract at least 5 million tons of copper for 25 years.
Leaders in Kasese called upon the government to find a serious investor who can take over management of Kilembe mines saying that the current management can’t run their responsibilities.
ABOUT KML
In July 1950, two Canadian mining companies, Frosbisher Limited and Ventures Limited, formed a joint venture, named Kilembe Mines Limited (KML), whose objective was to mine copper from under the Rwenzori Mountains near Kasese. KML built and operated a copper smelter in Jinja and maintained offices in Kampala, the country’s capital. Other assets include a housing estate for staff in Kasese and the 5MW Mubuku I Power Station in the Rwenzori Mountains.
In 1962, KML was acquired by Falconbridge of Africa, who sold it to the Government of Uganda in 1975. Copper extraction ceased in 1982 due to dilapidated equipment, high inflation and insecurity.
In 2013, after nearly 30 years of dormancy and after several failed attempts to privatize the mine, a consortium led by Tibet-Hima Mining Company Limited, won the competitive bid to manage, rehabilitate and operate Kilembe Mines Limited for 25 years from 2013 until 2038. In exchange for those rights, the consortium paid a cash down payment of US$4.3 million and is expected to make an annual payment of US$1 million until the end of the concession. Also, the consortium will invest US$135 million into rehabilitating and improving the mine and will increase the capacity of Mubuku I Power Station to 12MW. In addition to the cash payments above, the Ugandan government will receive royalties on the minerals extracted as well as taxes from Kilembe Mines Limited business operations.