About 25 kilometers outside Moroto Town, along the Moroto-Mukitale Road that leads to one of the Kenyan borders, is a limestone mining site located precisely in Katikitile Parish in Tapac Sub-County.
In the early 2000s, the site was abuzz with activity. “The entire sub-county of Tapac used to work here,” says Mr. Lokiru Sisto Dodoth, the Gombolola Internal Security Organization Officer (GISO). Locals set-up camp at the site which was busy with life. Work at the cement mining site was the main source of livelihood for majority of the residents. Today, however, only a handful of locals work at the mines.
“Then, about 60 – 80 trucks used to collect limestone daily,” Mr. Lokiru says. The limestone site which sits on over 49 square kilometers is one of two licensed mining areas Tororo Cement owns. The vast site is dotted with heaps of limestone boulders waiting to be collected. Some of the limestone heaps has been there for over a year without being bought, according to the Mr. Lokiru added. Despite this and the very hot sun, youthful men continue to toil; breaking huge boulders with sledge hammers and loosening others with crow bars. An elderly man, probably in his 70s, with the help of a cane, limps around a heap of boulders as he keeps a keen eye to ensure the young men nearby do not steal them. We are told the old man is waiting for his sons to come and start working on cement boulders.
At a distance, is a heavy duty grader owned by Tororo Cement that makes the work lighter. The grader digs-up the huge boulders loosening them for the miners to work on. You could be forgiven for likening the area as a labour camp. This work is “no-walk-in-the-park” assignment; yet the laborers often spend many months without pay.
“These days only about 9 or 10 trucks come for limestone,” says the GISO. He adds that this is further worsened by the poor state of the access roads to the mines, which complicates the ease of reaching the limestone markets. Consequently, limestone business in the area is very low and no longer lucrative for workers.
“When a truck comes to collect limestone, the obvious priority is put on the boulders closest to the access road. This also determines the ease and pace at which the 15ton or more boulders are loaded,” says Mr. Nathan Mushetsya, the Regional Inspector of Mines in the district.
There is a perception among the local residents of a conspiracy among truck drivers to marginalize the Tepeth tribe by preferring to load limestone collect by other tribes, thus depriving the Tepeth income. This perception is confirmed by the assertion of Mr. Lomel Peter, the Local Council 3 (LC3) Chairperson of Tapac Sub-County. “Our people are not given work; Truck drivers prefer to buy from other tribes, so locals do not get market and therefore income for their limestone,”
Mr. Thomas Lomel, a 35-year old worker says “he has worked at the site for seventeen years, but he has not benefited anything”. A father of seven, he is worried that after many years of toiling, his energy is dwindling and he fears he might not be able to fend for his family soon. He says, the income generation option available, which is agriculture is unfortunately a distant consolation.
The Mr. Lokiru reported that the region has not had meaningful agricultural produce in the last five years, because of adverse weather conditions. A record five-year drought hit the region in 2009 and its effects have continued to be felt to this day.
During a meeting with a team from Oil in Uganda at Tapac Sub-County headquarters, the Local Council officials blamed Tororo Cement for their financial woes and predicament.
“Every time we call the Tororo Cement Officials to meet with us to discuss our problems related with limestone mining, the officials refuse to come to the meetings”, Mr. Lomel said. He asked the Oil in Uganda team to help them meet with the Tororo Cement Officials, because “they as affected resident have failed to achieve this” he added.
Mr. Mushetsya, during an extractives stakeholders’ workshop organized by Action Aid Uganda, reported that he had met some of the officials of Tororo Cement Factory who informed him that they had selected a Liaison person at the district to link the affected residents with the factory. However, Mr. Lomel said that “the liaison person had not been of any help to the residents’.
The officials said “Tapac’s woes, unsurprisingly, include royalty related issues”. Bona-fide landowners where limestone is being extracted have never received their share of royalties remitted by Tororo Cement factory to the Central Government as provided in the Mining Act 2003”, the officials added. Landowners where mining activities are conducted are entitled to 3% of the total royalties paid by a mineral prospector as per the law. Instead, the royalty money was being sent to another sub-county through the Community Development Officer. The landlords reported that this issue has since been rectified and they are in final stages of registering an association through which they will be receiving their royalty money.
Mr. Paul Omonuk, the Production Officer of Tapac Sub-Country claimed that the sub-county does not receive the 7% of royalty as provided in the Law. He also asserted that the district restricts the sub-county’s use of the 7% royalty money remitted to the district claiming that at one time they wanted to buy a vehicle to ease their movements, but the district refused them to do so. However, this claim was refuted by Mr. Mushetsya who informed the participants at the workshop that the Sub-County has authority and mandate to use the royalty money as per their development plans. He explained that the district leadership cannot dictate how the Sub-County uses the money, because they held accountable.
The Oil in Uganda team also learnt that Tororo Cement pays Ug.shs7,000 per truck that leaves the limestone mines. But, this money never reached the sub-county. It was later discovered that Mr. John Bosco Moru, the former Sub-County Chief, used to receive the money and use it for personal interests without the knowledge of the community. Mr. Moru was subsequently dismissed upon the discovery of his illicit conduct.
Based on the submissions of the workshop participants, they suggest that there is an information gap between Tapac Sub-county and Moroto Local Government that is responsible for the unease between the two parties. There is need for timely sharing of accurate information between the two parties.
Tororo Cement sets Record Straight
The Tororo field office is located in Kosiroi about 5 kilometers from the limestone mines. While there, the Oil in Uganda team spoke to the site manager, Mr. Kennedy Akenda together with a few other staffs who were disappointed with the accusations being leveled at Tororo Cement Factory by the Tapac Community members
Mr. Akenda explained that “the miners’ predicament regarding low business volume as a result of reduced number of trucks ferrying limestone was attributed to a Uganda National Roads Authority (UNRA) directive to the reduce the number of truck plying the route and the tons ferried to avoid continued spoilage of the roads”. He added that “the other factor responsible for the low business volumes was the profitability of ferrying fewer tons of limestone: truck owners found it not profitable to ferry only 11 tons of limestone over a distance of 300kms and consume more than 250 liters of fuel, so many truck owners opted out of the business and put their vehicles to other use” Kennedy said. “The distance from Moroto to the factory in Tororo is over 300km. It does not make business sense to ferry low tonnage of limestone and a high transport cost” Kennedy added. He informed the Oil in Uganda team that “the factory was expanding and setting-up another plant; “maybe then
Mr. Akenda further explained that they were instructed by Tapac officials to withhold payments on truck royalties until the mess created by the former Sub-County Chief is sorted. Once the Tapac officials give the factory clearance to remit the royalty money, they will do so accordingly, because they have clear records.
This explanation from the officials of the factory notwithstanding, the Tapac leaders are determined to pursue the matters until they get what belongs to them as benefits. They warned the factory from bringing their own labour force to mine the limestone, arguing that the community members are ready to mine and sale the limestone to the factory.
The Tapac leader reported that they are in negotiations with Tororo Cement over a Memorandum of Understanding (MoU) that will guide their relationships.
Ministry of Energy argues that the farm-down creates monopoly in the Albertine Graben
Officials in the Ministry of Energy and Mineral Development (MEMD) and Uganda National Oil Company (UNOC) are in contention on whether Tullow Oil Plc’s farm-down to Total E&P Uganda should be approved, Oil in Uganda can reveal. Read More
The Internal Mines report reveals that the company has so far invested only $ 51 million in revamping the mine but there are no mechanisms of tracking the ‘actual’ investment in the mine
Technocrats in the Directorate of Geological Survey and Mines (DGSM) under the Ministry of Energy and Mineral Development have ordered Tibet Hima Industry Mining Company Ltd to halt its activities over safety concerns, Oil in Uganda has learnt.
In the recent Internal Mines Inspection report submitted to Director of Mines, the technocrats noted that Tibet Hima Mining Company flouting all the terms of the concession agreement.
“We recommend that Tibet Hima Industry Mining Company Ltd halt mining activities until it has put in place adequate occupational health and safety provisions, which include proper underground ventilation, provision of relevant protective gear to mine workers, safety and precautionary signage in underground workings, a processing plant and in all concession projects,” the report reads.
“Miners were found working without protective gears which is dangerous to their health and as regards to mining best practices, it was also evident that mining methods being used did not cater for sustainable exploitation of Uganda’s mineral resources,” the report elaborates.
Tibet Hima Industry Mining Company, a consortium of Chinese companies was awarded a concession to revive the mining activities at Kilembe copper mines, process copper and associated minerals to final products in 2013.
According to the DGSM technocrats, the findings are based on field inspection of the mine conducted between June and July 2016 and it exhibited that mining operations at Kilembe site is more of a shadow of the previous Kilembe Mines operation described as ‘mechanized artisanal operation.’
As the regulator of the sector, DGSM undertook on-site inspection of Kilembe mines mainly to appraise concessionaire’s performance in regards to undertakings outlined specifications on the concession agreement.
Interestingly, the report acknowledges that since signing the concession with Government three years ago, Tibet Hima Mining Company has been able to rehabilitate the cobalt concentrator plant; where they have imported and fabricated on site flotation cells, installed a 1,500 ton per day ball mill and accessory spiral classifier, renovated one of the two existing thickeners and one of the six existing crushed ore bins, and also installed a new vacuum concentrate filtration unit among others.
The report however states that despite these achievements, the procurement procedures were done without passing through the agreed channels and procurement committees.
The company committed itself to injecting in $ 175 million to revamp the mines, rehabilitate the concentrator plant by replacing all the floatation cells and replace all the old mills with new modern mills in order to produce more than 24,000 tons per annum of copper in the first three years.
According to Alex Kwatampora, the Project Manager at Tibet Hima Mining Company, the report do reflect on the gaps in their activities but they have since rectified the problems. He explained that the company is going to invest $ 175 million dollars in a phased approach and part of this money ($ 26 million) will go towards upgrading Mubuku hydro power dam from the current 5 megawatts of power to 12 megawatts and finally to 17.6 megawatts.
“Yes we had some gaps at the time of inspection, but we have corrected them. We have recruited new mine engineers and provided all workers with protective gear in line with the recommendations,” he explained to Oil in Uganda.
Weighing on the investment, Kwatampora explained that DGSM technocrats’ mandate is to ensure that the company adheres to the technical aspects spelt out in the concession and not delve on the investment since it is not their concern.
“We write quarterly reports to Ministry of Finance about the investments,” he told Oil in Uganda.
“People have to understand that this is an old mine, re-opening it is not easy like building a new one, it is costly and requires a lot of time,” Kwatampora said adding that the company is to construct a copper smelter and refinery plant to process copper.
Tibet Hima Mining Company Ltd will also conduct a comprehensive mineral exploration to increase on the known reserves of 4.5 million tonnes of copper at Kilembe
The internal report reveals that the company has so far invested only $ 51 million in revamping the mine but there are no mechanisms of tracking the ‘actual’ investment in the mine.
Among other concerns raised by the report; the company does not have a mine surveyor, a mine geologist as well as a geotechnical engineer to assist the mining engineer in monitoring the underground operations and recommends that it should employ these professional before resuming business.
“Tibet Hima Mining Company Limited need to be instructed to fast track its undertakings as spelt out in the Concession Agreement, given that it recognizes it is behind schedule and ordered to file audited financial statements for purposes of tracking its investment,” the report recommends.
Tibet Hima Mining Company Ltd officials however insist that it has rectified the problems and therefore no need to halt its activities.
This is not the first time Tibet Hima Mining Company has been accused of irregularities. In March 2016, the company was forced to suspend its operations after an assessment report by the National Environment Management Authority indicated that the company’s sewage disposal unit had a negative environmental impact on the people in the area and the river Nyamwamba water streams.
Whether the recommendation of the technical team will be effected still remains interplay between the technical arm of government and the president’s politics of ‘not fighting my investors’.
Report by Edward Ssekika.
Tullow Oil PLC has entered into a substantial farm- down of 21.57 per cent of its 33.33 per cent shares in the Exploration Areas in all the Lake Albert Project licenses in EA1, EA1A, EA2 and EA3A to Total E&P Uganda B.V.
The London-based company yesterday announced that a Sale and Purchase Agreement with an effective date of January, 1st, 2017 will allow Tullow retain an 11.76% interest in the upstream and which would reduce to 10% when the Government of Uganda formally exercises its right to back-in.
“This agreement is based on the transfer of licence interests from Tullow to Total in exchange for cash and deferred consideration to be paid as, and when the Lake Albert Development Project reaches a series of key milestones, and represents a reimbursement by Total of a portion of the Tullow’s past exploration and development costs,” partly reads the press statement from Tullow. According to a press statement issued by Total E&P, this transaction will give Total a 54.9% interest, strengthening its position in this competitive project and paving the way for a project sanction in the near future.
“Following the agreement on the Tanzanian export pipeline route, this transaction gives Total a leadership position to move this project efficiently toward FID in the current attractive cost environment, while providing strong alignment and a pragmatic financing scheme for our partner Tullow,” said Patrick Pouyanné, Total Chairman and CEO adding that the increased share in the Lake Albert project will bring significant value to Total and fits with our strategy of acquiring resources for less than $3 per barrel with upside potential.
Aiden Heavey, Tullow Oil Plc Chief Executive Officer (CEO), said the company will remain an active player in Uganda, “Today’s agreement will allow the Lake Albert Development to move ahead swiftly, increasing the likelihood of Final Investment Decision (FID) in 2017 and first oil by the end of 2020. I’m particularly pleased that Tullow’s long-term commitment to and presence in Ugandan is guaranteed by this transaction and that we will remain an active investor in Uganda’s oil and gas sector,”
He added, “The deal will secure future cash flow for the group from one of the industry’s few truly low cost development projects without any additional cash requirements expected. We will work closely with the government of Uganda, its associated agencies and with Total and CNOOC to move this transaction forward as smoothly as possible over the coming months.”
The farm down is likely to raise once again tax disputes. Of recent, such disposals have attracted Capital Gains Tax (CGT) which has been a center of oil litigations between government and the International Oil Companies.
Both companies strongly assert that completion of farm dawn is subject to approval from government of Uganda.
“Once this transaction is completed, Tullow will cease to be an operator in Uganda but will retain a presence in-country to manage its non-operated position,” the press statement notes.
The Lake Albert Development Project is a major development which expects to achieve around 230,000 barrels per day at peak/plateau production.
Report by Edward Ssekika
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Uganda has lost at least 4.4 billion shillings (approx.1.3 million dollars) in uncollected mineral royalties in the last five years, according to a report from the Office of the Auditor General (OAG). Read More
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