The government has provided an explanation for the termination of its contract with Tibet-Hima, a Chinese company that was contracted to revive Kilembe Mines.
The termination followed Tibet-Hima’s request to export 30,000 metric tons of gold, copper, and cobalt as “samples” for testing in China.
In June 2017, the government ended the contract, leading the company to challenge the decision by seeking a temporary court injunction and petitioning various authorities.
Tibet-Hima had been awarded approximately 1,550 square kilometers of land, extending to the border with the Democratic Republic of Congo, to restart copper and cobalt mining operations.
In May this year, the company petitioned Parliament to investigate the circumstances surrounding the termination of its 25-year contract to manage, rehabilitate, and operate Kilembe Mines.
The company, which was tasked with resuming copper ore mining in Kilembe Mines in Kasese District, accused the government of frustrating the 2013 concession agreement, resulting in financial losses.
Minister of State for Investment, Evelyn Anite, addressed Parliament’s Committee on Natural Resources, providing insight into the government’s decision.
Anite explained that Tibet-Hima’s demand was unreasonable and unacceptable.
“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,” she said.
Anite noted that President Museveni also disapproved of the request, seeing it as a threat to Uganda’s national resources.
“The President said that these resources belong to Ugandans. The concessionaire, Tibet-Hima, said, ‘If that is the case, I will not continue with you,’” she explained.
She added that this disagreement ultimately led to the contract’s termination.
Beyond these demands, Anite revealed that Tibet-Hima lacked the capacity to fulfill its contractual obligations, which led the government to conduct further investigations.
“We did due diligence and discovered that this company had no capacity. What the government did by contracting this concessionaire was wrong,” Anite admitted.
The cancellation has resulted in significant losses for Uganda, including missed concession fees, job opportunities, and the chance to revive the once-thriving Kilembe Mines.
This fallout highlights the challenges in reviving Kilembe Mines, which has long been viewed as a potential source of wealth and employment for Uganda.
Despite the losses, Anite reaffirmed the government’s commitment to safeguarding Uganda’s natural resources.