Iron Ore, Diamonds Added to Uganda's Resource Potential

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Written by Richard Finlayson, Senior International Editor for Industrial Info Resources (Sugar Land, Texas)--As Uganda develops oil reserves, refining capacity and inter-regional connections by rail, its strategic location is attracting attention from international companies, including those from China.

Uganda's location gives it access to more than 500 million people. President Yoweri Kaguta Museveni last week met with Hu Yong, country director of Guangzhou Dongsong Energy Group Company Limited (GEGCL), to discuss opportunities in Uganda's mining sector.

GEGCL is already involved in development programs in Uganda. In 2014, it received a lease to mine phosphate deposits in eastern Uganda's Tororo district. The company plans to produce 300,000 tonnes of fertilizers and 300,000 tonnes of steel, and to build a 5-megawatt (MW) power plant to serve the projects.

Tibet-Hima, a consortium of Chinese firms, is reviving copper mining in western Uganda with a $175 million investment plan. As the mining industry needs power, China is positioning itself as the country's main energy producer, and is working on the 600-MW plant with an investment of $2.2 billion, and the 180-MW Isimba plant with an investment of $550 million.

Uganda could also be on course to increase its role in the African iron ore market after a geological survey identified larger deposits of ore than in its days as a British colony.

"Currently, we have over 200 million tonnes of hematite iron ore in southwestern Uganda and 60 million tonnes of magnetite iron ore in the southeastern part of the country, and still have huge potential for exploration," said Francis Natukunda, a senior geologist at Uganda's Department of Geological Survey and Mines. He added that if the iron ore is extracted, it would not be exported, but rather used domestically to fuel demand for steel in the construction industry.

Natukunda said the survey revealed potentially huge diamond deposits around areas of Lake Kyoga, where bodies similar to kimberlite had been found.

"Uganda's geographical position gives it access to over 500 million people, including COMESA (Common Market for Eastern and Southern Africa) and SADC (Southern African Development Community)," 'said Gabriel Ajedra Aridu, state minister for investment. "The recent population surge in the countries forming these regional blocks will trigger demand for construction materials."

The U.S. Geological Survey (USGS) lists cobalt, copper, tin and tungsten as mined metals and cement and vermiculite as the most important industrial minerals extracted. Uganda produced 1.6 million tonnes of cement and 2,949 tonnes of iron ore in 2012, the most recent year for which USGS figures are available.

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