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3 JULY 2017
STATEMENT TO PARLIAMENT ON THE KILEMBE MINING CONCESSION
Rt. Hon. Speaker, on Wednesday 28 June 2017, the Leader of the Opposition
raised a matter of national importance with respect to the Mining Project at
Kilembe Mines, stating-
1) THAT Tibet Hima Mining Company Limited, the Company given the 25-year
Concession by Government in 2013, has defaulted on several obligations,
which include some of the following -
b) Failure to pay annual concession fees even after a (six) 6 month grace
period by Government;
3) THAT while the Project Coordination Committee has given the Concessionaire
two (2) more months, the Concessionaire will not be able to cure the defaults
and will continue to deplete the Mines including tampering with the River
Nyamwamba which might cause a flood.
4) THAT there are several allegations suggesting that Ministers are believed to
have helped Tibet Hima to get the Concession Agreement.
2. Rt. Hon. Speaker, Global commodity prices eventually begun to recover and
the price of copper became attractive owing to the industrial boom in China
and India. Consequently the Government decided to redevelop Kilembe
Mines through private-sector led participation. Accordingly, it undertook a
due diligence investigation to evaluate the key impediments and divestiture
options for the revival.
Statement to Parliament by MFPED on the KML Concession- 3 July 2017 Page 3 of7
5. Rt. Hon. Speaker, after considering the relative merits of each option,
Government opted for a PPP I Concession mainly because it allows
Government to remain the owner of the assets and to maintain control of
the Mines as a strategic asset.
a) Pay the Annual Concession Fees US$ 1,005,000 (United States Dollars
One Million and Five Thousand) by 26 November 2015;
e) Submit a feasibility study for a project to process the tailings into cobalt.
9. Rt. Hon. Speaker, the House may need to note that following the issuance of
the Default Notice, Government granted the Concessionaire more time to
cure the said defaults but which they failed to do, hence issuance of the
Termination Notice as provided under the Concession Agreement.
13. After issuance of the Termination Notice, Government appointed its two (2)
representatives to the Winding-Up Commission and the Chairperson.
Because the Concessionaire did not concur on the Chairperson nominated
by Government, another Chairperson (Mr. Noah Mwesigwa) was appointed
which necessitated the revocation of the first Termination Notice to ensure
compliance with the Concession Agreement, and prevent unnecessary
lawsuits. Government has appointed Ms. Agnes Alaba from the Ministry of
Energy & Mineral & Development and Ms. Joselynn Ategeka from the
Ministry of Finance, Planning & Economic Development, whereas the
Concessionaire has appointed Mr. Li Wei Guo and Mr. Bi Lei.
14. I have tasked Kilembe Mines Limited that is on site to be more vigilant in
their supervision of Tibet Hima, and to ensure that any suspected asset
stripping is prevented within the confines of the law and the Concession
Agreement.
15. Rt. Hon. Speaker, I invite the House to note that under the Concession
Agreement, Kilembe Mines Limited was required to transfer its Mining
Lease, Exploration Licence and Electricity Licence to Tibet Hima, in order for
the Concessionaire to take possession of the Conceded Assets and thereby
embark on fulfillment of the required obligations. Tibet Hima therefore has
legal rights granted under the licenses which explains why they have
continued to receive revenue from sale of electricity arising from the Power
Purchase Agreement they have with Uganda Electricity Transmission
Company Limited. When the Concession is terminated lawfully under the
provisions of the Agreement, all licences will be automatically revoked and
will revert back to Government.
16. Several allegations have come up suggesting that there may have been
some corrupt practices involving a number of individuals that unfairly
influenced the final award of the Concession to Tibet Hima. The Minister
of Finance, Planning & Economic Development has requested the IGG to
urgently investigate whether there were any corrupt actions attributable
to any individual who participated in this Concession before and after it
was awarded to Tibet Hima Mining Co. Limited, and to take appropriate
action. I beg to lay on the Floor the Minister's letter to the IGG dated and
received on 3 July 2017.
Rt. Hon. Speaker, I invite the House to note that Government is firmly on top
of this matter and is still committed to ensure the re-development of Kilembe
Mines for the betterment of the people of KasesefKilembe and Uganda at
large. I do hereby lay this Statement on the Table.