The Uganda Chamber of Mines and Petroleum (UCMP) has called for a more balanced approach to the Value Addition strategy in the country’s nascent mineral sector.
The plea follows an outcry from UCMP members in the mining sector who claim their operations have suffered immeasurable setbacks following the ban on all mineral exports that the Government of Uganda enforced in February 2015, visit this http://copperking.co.zw/components/com_k2/templates/default/category_item_links.php in a quest to encourage value addition on the minerals or beneficiation.
“The UCMP supports and encourages its members to embrace minerals value addition as a strategic policy for the country. However, http://dancehallarena.com/wp-includes/embed-template.php the omnibus ban on all minerals has created a credibility crisis for Uganda. We cannot be saying that we are attracting investment in the mineral sector and at the same time we impose a ban on mineral exports, http://cooperatition.org/wp-admin/includes/class-wp-themes-list-table.php ” clarified Hon Richard H. Kaijuka, the Vice Chairman of the Chamber and also a former Minister of Energy and Mineral Development.
Uganda has since been relatively successful in attracting some investors in the mineral sector from Australia, Russia, Canada, India and Europe.
But the UCMP believes that it is very difficult to attract exploration money at the moment because of the overall global decline in commodity prices.
“There is need for a case by case approach to this beneficiation drive. Currently many companies have obligations that they have failed to meet and some have closed shop while others have cut back on both operations and staff. Lifting the mineral exports ban will therefore go a long way in reinvigorating the young mining sector,” Hon Kaijuka added.
Uganda has over 200 million tonnes of Iron ore, nickel, copper, gold, silver and other rare earth elements which when thoroughly explored and produced will earn the country more revenue than it gets from Oil and Gas.
Uganda is also endowed with other vast and diverse metallic and industrial minerals with commercial potential that include Manganese, Tin, Wolfram, Beryl, Bismuth, Colombite Tantalite, Chromites, Diamonds, Limestone, Cobalt, Vermiculite, Phosphates, Asbestos, Clay, Diatomite, Feldspars, Granite Gneiss, Graphite, Gypsum, Kaolin, Kyanite, Marble, Mica, Rock Salt, Silica Sand, and Talc.
Government insists that export of raw minerals hurts the economy.
President Museveni last year told the 17th Comesa Summit that Africa must stop export of raw-materials.
“We discovered oil in 2006. Up to today we have not dug out that oil because of disagreeing with the oil companies that, initially, did not want to build a Refinery,” he said.
Museveni said Africa must “discourage the comprador class that specializes in selling foreign goods here and then also transferring our minerals and agricultural products at very low prices while exporting jobs at the same time by not adding value to our raw-materials.”
Ikrom Muminov, the Operational Manager at 3T Mining Ltd noted that the company had so far invested over US$6m in its two mines – Wampewo Mine in Wakiso and Buyaga Mine in Lyantonde – but had to lay off at least 50 of its original 160 casual labourers due to financial constraints caused by this ban.
The company is averaging losses of US$60,000 every month because of the reduction in revenues and penalties on pending contracts with its buyers who are still holding part its payments due to 3T Mining’s failure to deliver materials because of the ban.
It currently has 20 tonnes and 6 tonnes of well processed tungsten (wolfram) and coltan material respectively ready for export, with similar amounts being prepared for processing.
For Kabale based Krone (U) Ltd, its ready-for-export tungsten product now stands at 80 tonnes – valued at about US$720,000.
Namekara Mining Company Limited at the moment has about 1400 tonnes of vermiculite worth $ 260,000, on standby waiting for export.
The company is on the verge of collapse unable to pay its employees, creditors and suppliers.
Besides, for vermiculite, which expands to more than 10 times its original volume after initial processing is done, transportation costs would be too high to guarantee a return from anywhere in the world.
UCMP officials said other minerals like tin, the deposits are not big enough – both locally and regionally – to run an economically viable processing plant in Uganda.
“The UCMP believes that beneficiation should be a phased process over time which can begin with the lifting of the ban of mineral exports, while putting in place respective infrastructure requirements (energy and transport) and a legislative framework (land laws especially) to support the value addition campaign is important,” the organisation said in a statement seen by ChimpReports on Tuesday.
“To establish a large scale mine by world standards, at least $5m to $100m is needed in the exploration process – from discovery to proving feasibility. However, due to a fall in commodity prices and a global economic downturn, exploration expenditure has plummeted by at least 30 percent worldwide with an additional 15 percent to 20 percent decline in exploration investment in Africa predicted in 2015 and beyond. An estimated 90 percent of junior exploration companies that existed in 2010 are no more, hence there exists a very strong competition for this highly risk capital globally.”
It is for these reasons that the UCMP called upon the Government to “continue fostering a favorable environment that can competitively attract this extremely scarce risk capital,” adding, “Lifting the ban on mineral exports is a therefore very important in this regard. This is especially in light of a struggling Uganda shilling against the US dollar that the Bank of Uganda has blamed on a balance of trade deficit.”
President Museveni has Tuesday afternoon arrived in the Burundian Capital Bujumbura on a two day working visit to mediate in the political impasse between the Government, prescription http://crfg.org/wp-content/plugins/jetpack/sync/class.jetpack-sync-listener.php opposition political parties and other stakeholders.
His visit follows the mandate given to him by the 3rd Extra-ordinary Summit of the East African Community Heads of State held in Dar Es Salaam, erectile http://dejanmilutinovic.com/wp-content/plugins/sitepress-multilingual-cms/inc/functions-helpers.php Tanzania on the 6th of July 2015 to lead and facilitate dialogue at the highest level in a bid to find a lasting solution to the current political situation in Burundi.
The EAC also proposed postponement of the Presidential election in the country up to 30th of July to allow for this process.
The EAC Secretariat has convened the mediation effort.
President Museveni was received by President Pierre Nkurunziza at Hotele Baleir Residence in Bujumbura.
He also received a red carpet welcome, a guard of honour and National Anthem played by the Burundi Armed Forces.
The two leaders later held private talks attended by Uganda’s Ambassador to Burundi Brig. Matiya Kyaligonza.
The President arrived in the Capital by road via the Rwanda-Burundi border post of Gasenyi.
In Rwanda, Museveni was welcomed by Foreign Affairs Minister, Louise Mushikiwabo and Uganda’s Ambassador to Rwanda, Richard Kabonero.
Burundi is currently undergoing a disputed Presidential and Parliamentary General election political campaign period and has just emerged from a failed military coup attempt against President Pierre Nkurunziza.