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Uganda cancels Chinese mining project citing bribery charges
July 9, 2017, 11:14 am
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Ugandan President Yoweri Museveni has ordered that a multi-billion copper mining project at Kilembe Mines that was awarded to a Chinese company be stopped immediately, following information that top government officials including a former minister received millions of dollars in bribes to influence the award of the mining contract.

Abrogating the contract, the President also ordered an immediate investigation into the awarding of the contract after it became clear that the $175 million copper mining venture was fraudulently awarded to "motorcycle assembling experts" and that Chinese investors who won the venture bribed senior officials in the ministries of Finance, Energy and Attorney General's Chambers.

Tibet Hima Mining Co. Ltd (THMCOL), a Uganda registered company and a subsidiary of Tibet Automobile of China, won the 25-year mining contract and was supposed to extract at least 5million tonnes of copper from the Kilembe mines.

Informed sources close to the president claimed that the winning company did not deserve the contract because they "compromised government officials" including a former minister who pocketed a $1 million bribe. The sources added that the contract was arbitrarily awarded in total disregard of the advice of the Chinese ambassador to Uganda.

According to the same sources, the Chinese ambassador to Uganda had in 2013 questioned the technical capacity of THMCOL to execute the project and had "strongly" warned that Tibet Hima Mining Co. Limited was not competent for the task, but he was ignored.

President Museveni instructed the country’s Privatization and Investment minister Evelyn Anite to immediately terminate the contract to Tibet Hima Mining Company. The minister issued the termination notice on 20 June and, besides accusing the company of bribery, also charged the mining company of going back on its contract commitments. The company has been indicted on failing to pay the first annual concession fee ($1.5 million), as well as not providing an exploration guarantee, as provided for under clauses 15.2 and 19.6.1 of the concession agreement signed between China and Uganda governments more than three years ago.

Project Manager of THMCOL, Alex Binego Kwatampora, confirmed receiving a notice of termination from the minister but said "the board is handling those issues with the government". He, however, denied the accusations of corruption in the Kilembe Mines deal. He insisted the company's failure to perform to the expectations of government had nothing to do with the way they won the contract.

Asked whether the company's failure to perform was related to lack of competence for the job since they are specialized in manufacturing bicycles and automobiles, Mr. Kwatampora said a due diligence report by the government team that visited its home site in China confirmed the company's competence.
In 2013 the Ugandan government decided to revamp Kilembe Copper Mines that was established in 1908. The once vibrant manufacturer and smelter of copper had been unproductive for close to 30 years.

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