Kilembe mines sale contested
Apr 22, 2009
THE privatisation of Kilembe Mines (KML) has hit a snag after the High Court slapped a temporally injunction on the process.
By Mikaili Sseppuya
THE privatisation of Kilembe Mines (KML) has hit a snag after the High Court slapped a temporally injunction on the process.
Uganda Gold Mines sued Kilembe Mines last week, contesting the privatisation and accusing the Government for breach of agreement.
The firm wants court to compel KML to abide by its obligations undertaken during the mineral exploration and feasibility study agreement made between them.
It is seeking $10m as special damages for bleach of agreement. It also wants a permanent injunction stopping KML from participating in its privatisation.
The firm argued that it was an interested party in Kilembe mines.
Jim Mugunga, the privatisation unit spokesman, however, said the injunction would not stop the sale.
“We will continue with the process. Hopefully, the wrangle would have been resolved by the time we reach the actual sale,†he said.
He pointed out that they had already hired a transaction adviser to prepare the firm’s sale.
Kilembe Mines is said to have about four million tonnes of copper reserves.
It also has a hydro-power facility at Mubuku producing 5MW, a limestone lease at Hima and about 3,000 houses in its estate.
Copper production at the mines stopped during the Idi Amin government in the 1970s.
Interest in it was revived when copper prices rose, especially with the emergency of China as a major market for raw minerals.
Mugunga said he was sure they would weather this storm as they had done in earlier ones.
“We have had several other parties, which had claimed interest and we managed to overcome them. I am sure we will do the same with this one,†he said on Tuesday.
THE privatisation of Kilembe Mines (KML) has hit a snag after the High Court slapped a temporally injunction on the process.
Uganda Gold Mines sued Kilembe Mines last week, contesting the privatisation and accusing the Government for breach of agreement.
The firm wants court to compel KML to abide by its obligations undertaken during the mineral exploration and feasibility study agreement made between them.
It is seeking $10m as special damages for bleach of agreement. It also wants a permanent injunction stopping KML from participating in its privatisation.
The firm argued that it was an interested party in Kilembe mines.
Jim Mugunga, the privatisation unit spokesman, however, said the injunction would not stop the sale.
“We will continue with the process. Hopefully, the wrangle would have been resolved by the time we reach the actual sale,†he said.
He pointed out that they had already hired a transaction adviser to prepare the firm’s sale.
Kilembe Mines is said to have about four million tonnes of copper reserves.
It also has a hydro-power facility at Mubuku producing 5MW, a limestone lease at Hima and about 3,000 houses in its estate.
Copper production at the mines stopped during the Idi Amin government in the 1970s.
Interest in it was revived when copper prices rose, especially with the emergency of China as a major market for raw minerals.
Mugunga said he was sure they would weather this storm as they had done in earlier ones.
“We have had several other parties, which had claimed interest and we managed to overcome them. I am sure we will do the same with this one,†he said on Tuesday.