Battle for Kilembe Mines Contract Takes Ugly Twist as Chinese Investor Runs to Parliament

Tibet Hima Mining Company Ltd, a private firm based in China, has petitioned Parliament to investigate the circumstances under which government terminated its contract to manage, rehabilitate and operate Kilembe Mines for 25 years.

The company which was tasked to resume copper ore mining in Kilembe Mines in Kasese district presented a number of complaints accusing government of frustrating the implementation of the 2013 concession agreement leading to financial loss.

Solomon Silwany (NRM, Bukooli County Central) presented the petition to Parliament during the plenary sitting chaired by Speaker, Anita Among, on Thursday, 18 April 2024.

According to the petition government failed to honor its obligations as per the agreement causing Tibet Hima Mining Company direct financial loss totaling to US$980 million between 2014 and 2017.

“The petitioner in implementing the agreement paid Shs4.2 billion to government, directly employed 822 Ugandans, purchased equipment worth US$ 22 million and committed US$183.500 million to future investments in the resumption of copper ore production from Kilembe mines,” said Silwany.

Silwany noted that government failed on a number of its mandates including handing over the Kilembe Mines site to the company and unlawfully terminating the contract.

“Government failed to handover Kilembe Mines to the petitioner nine months from the date of entering into the agreement, reduced the concession period from 25 years to15 years and failed to provide the necessary permits and licenses,” Silwany said.

Tibet Hima Company further noted that despite government’s failure to honor the agreement, it undertook a number of activities in preparation for the mining and processing of minerals including upgrading the existing operation facilities, underground mine de-watering, design of underground materials handling system and procurements.

They prayed that Parliament investigates the implementation of the concession agreement and establish whether both parties fulfilled their contractual obligations and reasons for site handover delays.

The petitioner also want government to halt the ongoing advertisement and subsequent procurement process related to Kilembe Mines.

Speaker Among referred the petition to the House Committee on Trade for consideration.