SIP Resources Believes the Time Is Right to Venture Into Uganda
With the government firmly dedicated to use unexploited minerals to drive Uganda's growth, the potential investor can feel safe the government is playing in the same team.
Simatupang, Indonesia, September 16, 2015 (Newswire.com) - Xing Japei the Director of Development and Research at SIP Resources said “we have been looking into the Eastern Congo region for some time now and believe there is a good opportunity for a company like ours, with our expertise and resources be to be able to make significant inroads into mining tin and coltan in the region. With the government’s current incentives it makes it financially lucrative for our company”.
In order to lure investors, government has proposed a wide range of tax breaks as well as scrapping of import duties on mining equipment ahead of the planned licensing round, according to Irene Muloni, the energy and mineral minister. Uganda hopes to lure investors by creating a more “favorable investment climate” with transparent allocation of licenses as well as the provision of up-to-date geophysical and geological data.
Last year, Uganda completed a $75 million national mineral survey that identified occurrences of resources such as uranium, tin, coltan, nickel, copper and gold across the country. The survey, funded by the World Bank and Nordic Bank is intended to develop an advanced geological data to attract investors.
“Uganda’s mining industry, if well managed has the potential to transform this country and catapult it into the ranks of middle income nations sooner than later” said Don Binyina, the Executive Director for the Africa Centre for Energy and Minerals (ACEMP).
The World Bank survey divided Uganda into six blocks and found the western Uganda, which borders the mineral-rich but restive Eastern Congo to be the most endowed.
And government efforts are slowly paying off, according to industry officials. Chinese-owned Tibet Hima Industry Co., which was awarded a contract to develop Kilembe copper mines in 2013 is expected to resume operations after investing $175 million into the mine, believed to contain as much as 6 million metric tons of unexploited copper ores, according to company executives.
The company plans to invest in smelting, refining and product factory development. Uganda’s mining industry, if well managed and monitored has the potential to increase its contribution to the country’s GDP as opposed to its current 0.4 % contribution.
But developments in Uganda come as the East African grapples with subdued prices. Although the global copper prices on the London Metal Exchange have staged partial recovery from a five-year low in recent weeks, the prices have lost more than 15% of their value since last year, amid concerns that the global economy may take longer than expected to return to full health.