A Bit Of The Good, The Bad, Then The Ugly For Rare Earth Minerals In Busoga

The minister Ministry Of Energy and Mineral Development Hon. Ruth Nankabirwa early in June made a mad dash to Busoga sub region on the request of the Prime Minister (PM) Rt. Hon. Robinah Nabbanja.

The energy minister was directed by the PM in May to rush to the districts of Bugweri, Mayuge and Bugiri in Busoga where the country discovered Rare Earth Metals (REM) & Rare Earth Elements (REE) largely referred to as Rare Earths – minerals that are driving the global Fourth Industrial Revolution – to respond to unnerving queries being raised by residents.

Good & Rare Natural Wealth Potential

When government confirmed the existence of the Rare Earths, it went out looking for investors with the knowledge, skills, finances and capacity to extract these minerals. Rwenzori Rare Metals (RRM) Limited, whose majority shareholder is Ionic Rare Earths Limited, an Australian company, was given an exploration license in 2010. Rwenzori Rare Metals is owned by Ionic Rare Earths (51%), Rare Earth Elements Africa (42%) and unnamed Ugandan Partners (7%).

Through the Makuutu Rare Earths Project, a project covering about 37kms across the districts of Bugweri, Mayuge, Bugiri and Iganga, Rwenzori Rare Metals has been establishing a significant ion adsorption clay deposit that ranks among the largest ionic clay deposits outside China. Exploration results put Rwenzori Rare Metals' discovery at 532 million tonnes of ore containing rare earth elements. The company said a review has been conducted to establish further exploration potential in the next 12 months.

The chief executive officer of Rwenzori Rare Metals, Mr Warren Tregurtha, anticipates that commercial production will start in the first quarter of 2024. He said they are applying for a mining license and want land access to start.

The Need For Massive Land

The company has invested in excess of $10m and once commercial production starts; the project will have the potential to attract another investment portfolio of about $100m.The Makuutu Rare Earth Project is one of the few clay deposits that contain high concentrations of heavy and critical metals necessary for strong magnets and other modern technology.

But like all big money mining projects, they require land – and for the rare earth minerals in Busoga, the mining companies and government will not only require access to land from the community for exploration but also total take over for mining when the time come. For now, the company is planning and laying the ground for that. This means that people will lose land and get displaced from their ancestral homes. Basically, the social setting of people in the larger part of Busoga will be altered in a manner that is irreversible. 

Government Distant, Creating No Awareness

Some of the fears rising amongst the communities in the three districts were raised on the floor of parliament by Bugweri district Woman Member of Parliament (MP), Hon. Rachel Magoola. As a people's representative, Hon. Magoola alerted parliament that government was not visible in the communities to educate the residents about rare earth minerals and the presence of an alien company. The MP said there were also potential land conflicts brewing due to potential sale of land purported to host the rare minerals.

“The locals have been given a timeline of one month to sign MoUs of their land to an organization which they are worried about. My prayer is that the ministry comes out and introduces these people officially,” she told parliament in May this year. On the intensified community engagements by Rwenzori Rare Metals Limited, the MP said: “It is causing a lot of anxiety and families are fighting against each other over the idea that land is going to be sold for a lot of money. We need protection of the community from this company.”

Land Conflict Fears Raised 

Rwenzori Rare Metals recently intensified geological mapping activities something that created fear among communities. Landowners now fear that they are going to be evicted from their own land without being compensated. Speculators are brokering land sale deals in anticipation for higher returns from compensations.

Ms. Jane Nalongo, 30, a resident of Buwaaya Parish in Mayuge District told Uganda Radio Network (URN) that her siblings are being forcefully evicted by the Sub County chief backed by security operatives after their land was illegally surveyed.

The Local Council One chairperson of Makuutu village in Bugweri Sub County, Mr. Jamada Kasisa, says the brokers, mainly government officials, are on rampage forcing residents to sell off their land arguing that the government will take over their land without compensation.

The Makuutu Rare Earth Project community liaison officer, Mr. Sarah Ntono, recently told journalists in Bugiri that the company is engaging communities to create awareness and that people shouldn't worry. She also revealed that after positive exploration results being achieved in Bugweri, Bugiri and Mayuge, they are expanding to Iganga districts.

To suppress these fears, minister Nankabirwa reassured the Project Affected Persons that government is undertaking the due legal diligence that will be followed to ensure residents are compensated. She disclosed that her ministry is yet to engage government valuers to agree on the compensations.

Renewable Energy Expo Promises So Much

The Ministry of Energy and Mineral Development (MEMD) together with the National Renewable Energy Platform (NREP) is organizing the first ever Renewable Energy Conference & Expo 2022 that will take place at Kololo Airstrip on 3rd - 5th November 2022. 

The expo is being organized under the theme 'Renewable Energy for Sustainable Industrialization, Inclusive Growth and Economic Recovery."

In this interview, Earthfinds editor Baz Waiswa talks to Nicholas Mukisa, the Deputy National Coordinator for the National Renewable Energy Platform, about the expo and the potential of renewable energy in Uganda.   

What is the Renewable Energy Conference & Expo 2022 and what do you aim to achieve?

The Renewable Energy Conference & Expo 2022 is one of the deliverables of NREP and the agenda for this conference is to bring together all players in the industry. 

We are looking at the private sector coming in to showcase products they have and development partners to exhibit and also make presentations. We have delegates who will come from Germany, the UK, UAE, India and other places. We are going to have manufacturers come and exhibit at the expo. 

We are targeting the private sector, government and MDAs, and development partners. We will have the general auditorium where morning activities like the launch will take place and after eleven, we will have breakout sessions and side events.

The expo is going to be a one-stop centre for renewable energy with investment and business opportunities. The expo will be free to the public but exhibitors have to pay. Exhibitors can register at www.re-conf.com or call NREP. 

What should people look out for at the expo?

One of the challenges we have in the sector is reliance on biomass. At the moment we have advances in the energy sector. Technology has advanced. We have now moved from tier one to tier two technology like electric pressure cookers, solar-powered hotplates and others that are the latest on the market.

The expo will provide an opportunity for people to interact with the private sector investors who have ventured into these advanced technologies. This is going to be a point of awareness. People will learn a thing or two. 

When you talk of renewable energy what do you exactly mean?

These are energy resources that cannot get finished. For example, the sun will shine as long as we still have life. The wind will blow, always. The water will always flow. Geothermal, which is underground, like Kitagata, will always be here.  

When you talk of sustainable industrialization, what is the state of renewable energy in Uganda? 

Today, if you are talking about renewable energy, you will mention hydro, wind, solar, geothermal and biomass. We mostly use hydro and solar. Renewable energy contributes about 92.5% of our energy generation. That is even before you incorporate Karuma and other plants.

Hydro is the most matured technology among the renewables and since it has been here longer than solar and wind, people think it is not renewable. 

But you know that most of our industries use diesel and generators which is not good if you are talking about sustainability, the environment and not jeopardizing the future generation. Today we are talking about climate change, and pollution - if you are using heavy fuel oils, these are heavy pollutants and not good. 

That is why the government is trying to decommission some of these plants and see that we can use renewables. Today, the president (Museveni) wants direct power lines to industrial parks; to supply electricity. 

Events like the upcoming expo are aiming at promoting renewable energy use but the market notices issues like pricing as a hindrance, how is this being addressed? 

If you look at the global trends of solar prices, the prices have been going down tremendously. If you look at the prices of solar in 2000, then 2020 and now, you will see that they have fallen by over 80%. And not only solar panels but also inverters, modules and other equipment that use solar.  

The other issue is the presence of counterfeit or fake products on the market. 

Counterfeits are killing the market. People should get value for money. We should at how we should standardize. Opportunities like the expo and NREP stakeholder engagements can help.

We need to tighten our borders to ensure that no counterfeits enter the market. No one will be talking about affordability if they are getting a quality, durable, value-for-money product on the market. 

 

Unexciting Excitement Surrounds Museveni Gold Reveal

Uganda became an overnight celebrity in the world of gold miners and traders when President Yoweri Museveni during this year’s State Of The Nation address on 7th June said the country had discovered a deposit of 31 million tonnes of gold ore in Busia district.

The revelation by the president attracted mixed reactions from members of the public and especially miners and gold traders. The president, confident as always, also said that the country would earn more than $12 trillion.

Ministry of Energy and Mineral Development (MEMD) spokesperson Mr Solomon Muyita told Reuters that an estimated 320,158 tonnes of refined gold could be extracted from the 31 million tonnes of ore. In Uganda, gold deposits are found in Karamoja sub-region and districts Busia, Bugiri, Namayingo, Kasanda, Buhweju and Bushenyi.

Unbelievable 31 Million Tonnes

To many industry players, the president’s disclosure was laughable and didn’t sit well with them. Mr. Don Bwesigye, a mineral & energy policy analyst, in an article published in the Daily Monitor newspaper, disputed the president's gold figures based on statistics from the US Geological Surveys.

The Surveys, according to Mr. Bwesigye, indicate that 244,000 metric tonnes of gold, the equivalent of 268,400 tonnes of gold, have been discovered in the world to date, of which 187,000 metric tonnes (205,700 tonnes) have so far been produced, leaving a balance of 57,000 metric tonnes (62,700 tonnes) of known reserves.

"This implies that Uganda’s gold discoveries surpass global gold discoveries by 115.5 times. Did the President confuse ounces with tonnes,” Mr Bwesigye questioned in the article.

The Wagagai Factor & Optimism

The government launched the construction of a gold refinery on 7th October 2021, under the management of Wagagai Mining Company Limited, a Chinese company with a vast gold mine in Busia, eastern Uganda.

According to reports, the company owns the gold mining right of 9.24sq km in Busia and about 20m tonnes of gold ore resources. The Refinery will occupy 300 acres of land covering Alupe, Akipenet, Amagoro and Amonikakine villages in Buteba Sub County valued at $200m.

Rising & Falling Gold Exports

Uganda registered a surge in gold trade in FY2020/21 due to, among others, Uganda’s improvement in refinery capacity which translated into becoming the regional gold-processing hub.

Mineral products registered the highest import growth in FY2020/21 (US$ 2169.16 million) from US$ 1,093.29 million in FY2019/20. Gold accounted for 90 percent of the growth.

However, in FY2021/22, the country registered a decline in import receipts from US$640.95 million in Q4 FY2019/20 to US$53.06 million, US$57.76 million, and US$54.24 million in Q1, Q2, and Q3 respectively.  This is attributed to the introduction of a new tariff on gold exports in FY2021/22.

Better Data To Stop Illicit Gold Trade 

Since Uganda got a gold refinery in Entebbe, its gold exports have been rising. Industry pundits say the gold mining activity in Uganda dominated by artisanal mining was insufficient to match the exports.

It was highly thought that Uganda was being used as a route for illicit gold trade from DR Congo. And indeed, early this year, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC), sanctioned Mr. Alain Goetz, the African Gold Refinery in Uganda, and a network of companies involved in the illicit movement of gold valued at hundreds of millions of dollars per year from DR Congo.

According to a report by the United Nations independent group of experts on Congo, governments need to improve and make public their gold trade data to help stem smuggling and violence around mines in the eastern Democratic Republic of Congo.

The Mineral Development Programme

The government of Uganda is running the Mineral Development Programme whose goal is to increase the exploitation and value addition to selected resources for job-rich industrialization.

The government under the mineral development programme increased exploration and quantification of priority mineral resources, and commissioned a gold mine in Busia district on 5th October 2021, with reserves estimated at 12.5 million ounces of mineable gold (equivalent to US$16 billion in gold reserves).

The government also conducted an evaluation of mineral reserves, conducted aerial and geological mapping, as well as Geochemical and Geophysical Surveys of Karamoja region, and in December 2021, Samta Mining and Minerals Ltd started exploratory drilling of Nickel mineralization at Atiak in Amuru District.

Uganda Makes Increases In Solar Power Energy Generation

The use of solar as an alternative source of energy has in the recent times gained global acclaim and developing countries like Uganda are adjusting and making reforms in their regulatory frameworks to allow and facilitate critical investment. Richer countries like France have pledged to fund efforts such as the International Solar Alliance (ISA), one of the practical off-shoots of COP21, the Global Climate Summit that was held in Paris, France in November, 2016.

And indeed, during the launch of the ISA, in New Delhi, India, in 2017, France president Mr. Emmanuel Macron pledged €700 million euros (about $862m at the time) by 2022 to help developing countries with their solar energy projects. The ISA garners for increased deployment of solar energy technologies as a means for bringing energy access, ensuring energy security, and driving energy transition in its member countries.

To become a beneficiary, Uganda ratified the ISA Treaty making her a member. According to sources, Uganda is a participant in two of the ISA’s critical programmes: the program for ‘scaling solar applications for agricultural use’ and Affordable finance at scale. Uganda has submitted its priority to use solar energy and through synergies with India, the host nation of ISA, the country has been receiving demonstration solar water pumping systems for irrigation.

The three top priorities of ISA are; identification of solar projects; mobilization of public and private finance at scale with a focus on guarantee instruments; and transfer of innovative technology solutions and capacity-building.

So far 32 of the 60 member countries who have joined the Alliance are from Africa. The Alliance will provide a platform to collaborate in addressing identified gaps through a common, agreed approach. Uganda hopes to use solar water pumping systems for irrigation.

Busia Solar Power Plant

The agreement for establishing the $6mn 4MW solar power plant was signed in Egypt in May 2018, between the Egyptian Ministry of Electricity and Renewable Energy and the Ugandan Ministry of Energy and Mineral Development (MEMD), on the sidelines of President Museveni’s visit to Egypt.

The project is fully funded by the Egyptian Agency for Partnership for Development of the Egyptian Ministry of Foreign Affairs, and implemented by the Arab Organization for Industrialization, in collaboration with Giza Systems.

The plant has been completed and handed over to the government of Uganda on Tuesday 25 January 2022, during a ceremony organized by MEMD. It is the latest of major Egyptian developmental projects in Uganda, including the Egyptian Medical Center in Jinja and the launch of new phase of the Egyptian-Ugandan Model Joint Farm.

Meeting Uganda’s rising energy demand

The plant will support the Ugandan energy sector to meet the rising energy demand in a climate–friendly manner. The 4MW production of solar power offsets 126.000 tons of harmful CO2 emissions, which is the equivalent of planting over 2,964,400 trees or removing 22.324 cars from the road for a year. It will also generate 36 million dollars in saving over the lifetime of the plant’s systems. When connected to the national grid, it will meet the needs of the Eastern Uganda region.

The plant is also the first to be operated by an educational institution in Uganda – Busitema University – and will support transfer of technology, technical cooperation and capacity building. It will also increase the feasibility of the development of on grid solar photovoltaic for electricity generation in Uganda.

The existing solar data clearly show that the solar energy resource in Uganda is high throughout the year. The mean solar radiation is 5.1 kWh/m 2 per day, on a horizontal surface. This level of insolation is quite favorable, for the application n of a number of solar technologies.  

Great potential for poverty eradication

The total new installed photovoltaic capacity annually is estimated at 200 kWp for households, institutions and commercial use. Solar thermal has a great potential in the form of solar water heaters in electrified areas.

Today electricity is most often used for water heating, in spite of the fact that it will in many cases be cheaper for the consumer to use solar energy. Furthermore, small solar water heaters are relevant for remote areas, where hot water is needed like in rural clinics and tourism areas, to provide a cheap, reliable and environmentally friendly, source of energy.

The Solar PV Plants in Uganda include Tororo Solar PV (10 MW) in Tororo district, Access Solar PV (10 MW) in Soroti district, Xsabo Solar (20 MW) in Kabulasoke and Emerging Power U Ltd (10MW) in Mayuge district, as well as Tororo PV Power Project (Tororo PV Power Co. Ltd) and Engie Equatorial and Power Distribution at Lolwe Island (600KW).

Energy services such as lighting, heating, cooking, motive power, mechanical transport and telecommunication are essential for socioeconomic development, since they yield social benefits, create employment and generate income. These issues are at the core of poverty eradication and national development.

Govt Tells Pipeline Company To Address Social Issues Raised

The government wants the East African Crude Oil Pipeline Company Limited (EACOP Limited) to pay attention to and swiftly address issues that the government, civil society organisations and members of the public are raising.

The EACOP, a $3.5bn pipeline, expected to transport Uganda's crude to the international market, has been red-flagged by CSOs who say it poses a climate risk. 

The CSOs also say the 1444km long pipeline will distort the social setting of the communities wherever it will pass as it treks from Hoima in western Uganda to Tanga port in Tanzania. 

The government call was contained in a press statement announcing that EACOP Limited had applied for a construction license to enable it to kickstart the development of the pipeline.   

Honey Malinga, the Ag. director of petroleum at the ministry of energy and mineral development last Friday said the government will process the application following the law.

He pledged continued government support to ensure seamless implementation of EACOP and that they look forward to the commencement of the pipeline construction. 

Martin Tiffen while applying to the ministry said all is set for the work to commence.

John B. Habumugisha Deputy Managing Director speaking at the recent 3rd National Content Conference organised by Petroleum Authority of Uganda (PAU) reassured the public that anything they 'do around EACOP must be stringently compliant to the environmental and social requirements.' 

"In terms of environment, we have avoided most of the sensitive areas & the design levels are stringent. Our system ensures that we don't have issues with spillage. -Deputy GM John Habumugisha," Habumugisha said.

 

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