How Cobalt May Revive Uganda's Mining Industry
As part of Uganda’s wide-ranging legislative reform, the government has implemented a revised mining code recently, which will help to attract further investment in its mining sector.
As a result, big mining companies are starting to wade into the water. Rio Tinto, for example, recently committed to investing up to $57 million in a joint venture agreement on the Kitgum Pader base metal project in northern Uganda.
The Uganda’s mining industry is important to the East African nation’s economic growth. With GDP steady rising at 4.25 percent growth per year, Uganda’s mining industry has the potential to bring further economic prosperity. Compared to its East African neighbours, Uganda attracts the most foreign direct investment (FDI), with the majority of that investment going to the coffee and mining sectors.
Uganda’s real potential for growth, however, is in its geological association with one of the world’s most prolific (and contentious) cobalt belts, the Katanga in the Democratic Republic of Congo (DRC). Canadian based M2 Cobalt recently acquired a portfolio of highly prospective cobalt properties in Uganda. The company has discovered several styles of copper-cobalt and nickel-cobalt mineralization across its exploration licenses located in regions of Uganada assessed to be amongst the nation’s “highest exploration priorities” for cobalt.
Though mining has been conducted in Uganda since the early 1920s, the region remains largely under-explored. A national mineral survey funded by the World Bank and the Nordic Bank and run by the Finnish Geological Survey found occurrences of uranium, tin, cobalt, nickel, copper and gold across the country, providing strong evidence for the significant potential of Uganda’s mineral sector.
The nation’s largest historic producer, the Kilembe copper-cobalt mine, produced over 16 million tonnes of ore grading approximately 2.0 percent copper and 0.2 percent cobalt while it was in production. Kilembe sits on a VMS-sulfide style deposit and the areas surrounding the former mine are believed to contain significant additional deposits. While dominated by copper and zinc, these types of deposits can also host significant cobalt resources.
As a proactive measure for developing their mining industry, the Ugandan government began working extensively with the World Bank between 2003 and 2011 to reform the country’s mining code and ensure greater transparency from artisanal and small-scale mining operations.
It’s clear that the national government understands that revitalizing the Uganda’s mining industry is essential to improving the country’s economic standing on the world stage. Uganda’s pro-mining policies and its untapped potential for mineral resources like cobalt presents an excellent opportunity to find conflict-free materials sources for the new era in energy.
Source: investingnews.com, caesarsreport.com