Gov’t explains cancellation of Tibet-Hima contract
The cancellation followed Tibet-Hima's request to ship at least 30,000 metric tonnes of gold, copper, and cobalt to China as samples for testing
KAMPALA, October 16, 2024 – The government has clarified the reasons behind the termination of the contract with a Chinese company, Tibet-Hima, which was tasked with revamping Kilembe Mines in Kasese district.
The cancellation followed Tibet-Hima’s request to ship at least 30,000 metric tonnes of gold, copper, and cobalt to China as samples for testing. The government outright declined this request, citing concerns over the company’s competence and capacity.
Tibet-Hima was awarded a concession covering approximately 1,550 square kilometres, extending to the Uganda-DRC border, to facilitate the restart of copper and cobalt mining. This concession was signed in 2013 but faced multiple setbacks that delayed its initiation until 2017. The government conducted thorough investigations into the company’s capabilities, including its manpower and machinery.
In May 2024, Tibet-Hima petitioned Parliament to investigate the circumstances surrounding the termination of the 25-year contract, accusing the government of frustrating the concession agreement and causing financial losses.
Minister of State for Investment, Evelyn Anite, informed the Parliamentary Committee on Natural Resources that Tibet-Hima made several unreasonable requests that could lead to the plundering of Uganda’s resources. “It was misguided for the contractor to think we could allow them to take 30,000 metric tonnes of our God-given natural resources as a sample,” she stated.
Anite further noted that the President [Museveni] attempted to intervene but concluded that the company’s demands were unreasonable, prompting a review of the contract. “The President emphasised that these resources belong to Ugandans. If that is the case, I will not continue with you,” she explained.
In addition to the unreasonable demands, Anite revealed that Tibet-Hima lacked the capacity to fulfill its contractual obligations, which led the government to conduct further investigations. “We conducted due diligence and discovered that this company had no capacity. It was a mistake for the government to contract this concessionaire,” she admitted.
The cancellation has resulted in significant losses for Uganda, including missed concession fees, lost job opportunities, and the chance to revive the once-thriving Kilembe Mines. Anite reaffirmed the government’s commitment to safeguarding Uganda’s natural resources.
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