MINERAL WEALTH CONFERENCE 1-2 OCT 2013

BY ELLY KARUHANGA CHAIRMAN UGANDA CHAMBER OF MINES & PETROLEUM

Introduction
First, I warmly welcome you to this 2nd Annual Mineral Wealth Conference, organized by the Uganda Chamber of Mines and Petroleum.

I would like to congratulate the Uganda Chamber of Mines & Petroleum spearheading the conduct of this years conference. Uganda has a huge mineral potential The Minerals and Mining Act 2003 was passed to regulate the exploitation of Ugandas potential In 2009 the Government carried out an air borne geophysical survey and established the probability of a huge and diverse mineral potential Events like this;

Offer an opportunity to discuss successes and challenges in the mineral sector

A comparative analysis of how other countries have addressed issues in their mineral sectors serve as an inspiration to use other Countries approaches, either as a model or as a warning, in reforming our own mineral sector policies and laws. Market the geological prospects of Uganda and to share success stories in Ugandas mining sector.

UGANDA: The Pearl of Africa

Lonely Planet the largest travel guide book and digital media publisher in the world voted Uganda the Top Global Tourist destination for 2012

The Pearl of Africa- Contd

After all this is the source of the longest river in the world, The River Nile the mythical place explorers sought since Roman times is where Savannah meets the vast lakes of East Africa for a handshake as the snow-capped Rwenzori mountains at the Equator, smile down on the sprawling jungles & beautiful Great Western Rift Valley and its lakes.

UGANDA: The Pearl of Africa Contd

The most fresh water networked country in the world next to its neighbor the DRC. Sir Winston Churchill in his book my Africa journey referred to Uganda as the Pearl of Africa It has 30 national forest reserves,11 game parks with virtually all animals you can imagine It celebrates its 51yrs of independence this month.

UGANDA: The Pearl of Africa

Uganda is home to 50% of the worlds last few families of mountain gorillas

Minerals that occur in Uganda

Last years conference had a theme, Showcasing Ugandas Mineral Potential. From that conference, all of us agreed that Ugandas mineral potential is not doubted. This years theme is, Investing in Ugandas Flourishing Mining Industry. There is no doubt that there is a flourishing mining industry in Uganda. The Namekhara Vermiculite resource, which attracted international majors such as Rio Tinto, has been quoted as the largest vermiculite resource in the world, with unique properties. Currently there is a Mine on this property, operated by an International Junior mining company, which has been exporting vermiculite through Dupre Mineral, one of the largest distributors of vermiculite in the world. The Sukulu Phosphate Hills host a significant Phosphate resource, which is known by the whole world, and has been documented among the largest phosphate rocks of the world.

Minerals that occur in Uganda include

Metallic Minerals Beryl- used for making light weight metal alloys for aircraft and in nuclear reactors Bismuth (bismutite) makes alloy steel Chromium used in furnaces as a refractory Cobalt- used in aerospace industry, electronics and high tech industries Copper- used for electrical conductors

 Talc- used as an extender in paints, lotions and face creams Mica- used for electrical insulation Graphite- used in pencils Phosphates- used in fertiliser Huge deposits of uranium All these minerals including pearls are mentioned in the Bible, Revelations & are found in the pearl of Africa. Ugandas mineral sector, like any other sector faces some challenges. These revolve around Hardship in acquisition of surface rights Power and Infrastructure bottlenecks Etc.

Non Metallic Minerals

Role of UCMP
The agenda of the Chamber of Mines and Petroleum now is to:
Engage Government and suggest policy and legal reforms in the mining and tax laws, which will provide tangible solutions to the challenges faced by Ugandas mineral sector. Work with Government to identify minerals in areas where mining can easily take Work with Government to devise means of how the Department of Geological Survey and Mines can be fully funded

Infrastructure Developments
The iron ore in the southwestern part of Uganda is of very high grade and easy to process into steel. With the commitment of Government to development of roads and related infrastructure, and the commissioning of the various hydro power dams (including Karuma, Ayago and Isimba), coupled with the discovery of oil & gas, to supplement the hydro power, there is no doubt that the time is now, to invest in the iron and steel industry in Uganda. As you may be aware, there is a linkage between power, road and mining.
Low energy and transportation costs have the potential to reduce the overall cost of production, and thereby dramatically change the reserve to resource levels.

Energy & Electricity

Uganda has grown at 6.5% for the last twenty years. There has also been a massive population explosion. There is therefore a huge need for a steady supply of energy to power a booming economy

With the population growth rate and the economic growth rate that consumption level is simply unsustainable. Government of Uganda has stated its intention to increase consumption from 75kwh per capita to 674 kwh per capita by 2018. Almost 900% That would require an additional 3,500MW of power.

Energy & Electricity Contd

Planned Way Forward: By building the following stations between 2011 and 2016 Bujagali HPP 250MW Karuma HPP 600MW (starting early next year.) Ayago HPP 700MW Isimba HPP 130MW Arianga HPP 400MW Thermal Plants (Gas to Power) 700MW Mini HPPs 150 MW Solar- 150 MW Geothermal 100 MW Waste to Power 150MW

 Better transport infrastructure would certainly improve the countrys economic prospects

Infrastructure

Infrastructure Contd
All these projects require structuring, investor locating and in especially the infrastructure deals PPPs (Public Private Partnerships) or whatever other vehicles can deliver a project on time and not over budget The Government has recently published a PPP Bill and has done a few PPP deals like Bujagali Banks, Developers, Equity Funds and Lawyers are all needed to service and structure this work

So should an investor come?

East Africa is underexplored. How underexplored? According to the academic Paul Collier an average square mile of land in the OECD Countries (Organization of Economic Corporation and Development-the rich countries) has about US $300,000 worth of known sub soil assets. By contrast an average square mile of land in the continent of Africa has about US $60,000 worth of known sub soil assets. That is about a five times less than the West. Can you imagine Africa has a fifth of all the known assets of the West? The reason why the West has a lot more natural resources is because more exploration work has been done there.

So should an investor come? Contd

Meanwhile as Africa is underexplored, another thing is happeningrecession in the West. But unlike other recessions, commodity prices have remained high. Usually, in a recession commodity prices collapse. Now the decline of Western economies has been matched by growth from the East and a new class of consumers. So demand for commodities is still high and commodity prices still have the potential to rise notwithstanding the slowdown in China and the West. Not only are we in the region underexplored. We are underexplored at a very interesting time. Please be mindful that the next 10-20 years are therefore quite an exciting time for us as a region. In my experience, exciting times are always challenging times. So we need some perspective. Everywhere I go these days people are talking about the resource curse in Africa.

CONCLUSION
The continent of Africa is waking up. It is a new frontier of growth, a new dawn Poverty is not reserved for Africa anymore Uganda is now ripe for private enterprise intervention & partnerships.

Uganda a rising lion

Current of history meets this new tide of hope

THANK YOU