Over-reliance on metal scraps and imported ingots for manufacturing steel products will soon be history in Uganda when Tembo Steels Uganda Limited completes a mega iron ore processing plant in Iganga District set to be the largest in Eastern Africa.
Himanshu Kampur Rahul, the Chief Executive Officer(CEO) Tembo Steels Group is happy that they will finally open one of East and Central Africa’s largest iron ore factories in Uganda. The factory under construction is located at Ngangali village in the eastern district of Iganga.
“The development phase includes construction of a factory sitting on a two square mile land. A mining license for iron ore has also been secured in Ndorwa district along Kabale-Katuna highway in Kigezi region,” said Rahul.
“Days are numbered for the competitive scrap buying in Uganda after Tembo steels completes the first phase of construction of sponge iron factory that will see a shift from using scrap recycling to iron ore in making steel products,” notes Dennis Gaffa the Lead Consultant for Tembo Steels.
The duo confirmed the allocation and securing of the mining license in Kigezi sub-region where they hope to start large-scale mining by 30th March 2019. “This is a low hanging fruit, a big iron ore rich district that no one has exposed,” stresses Rahul.
He contends that the oil and gas sector will benefit from the iron industry since steel is used in every oil project including exploration activities which need extensive engineering and construction using steel.
So far, 1,332 jobs for skilled and semi-skilled labour in the development phase have been secured and an estimated 6000 jobs would be generated after completion in March 2019.
Besides sponge iron, Tembo Steels Ltd will produce associated gas to a tune of one million standard cubic feet per day that will equally add to the number of labourers.
Rahul maintains that as part of their Corporate Social Responsibility, the company has asked government through the ministry of education to identify a piece of land where it will construct a modern heavy equipment machinery and gas skills training institution for Ugandans to promote free skills education where over Ush20 billion has been earmarked for investment.
Aerial and geological surveys in 2014/15 established the existence of over 200 million metric tonnes of iron ore deposits in the Kigezi region alone.
Other Kigezi districts with iron ore deposits are Kisoro and Kanungu. Tembo Steels Uganda Limited will mine iron along Kabale-Mwanjari-Katuna road and later embark on “sponge iron” production process or Directed Reduced Iron (DRI) at its factory under construction in Iganga.
Kigezi region boasts of millions of tonnes of iron ore and for long, some private speculators were extracting it as a low-value mineral and exporting it abroad while the local communities benefitted marginally as labourers using rudimentary and laborious methods.
The local leaders in Kigezi region feel that government should revoke the licenses on non-performing speculators and concessionaires in the iron mining activities which has hitherto been crippling value addition and thus hindering the harnessing of low hanging fruits.
The leaders and communities alike are also upbeat that this venture will reduce on the foreign exchange money hitherto spent on imports for the ingots used in steel rolling mills as well as using scrap which was being melted to get iron or steel.
Gathering and buying of scrap have its own costs of uprooting railways slippers, theft of road signs, electric cables among other vices although in some situations it cleans the environment of the old obsolete plants and machinery, argued the knowledgeable councillor.
Uganda’s Vision 2040 states that in the first ten years of implementation, the emphasis would be put on the establishment of economic lifeline industries among which is the iron and steel industry.
Among the identified key core projects at the commencement of the vision period had been the iron industry in Muko, Kabale(now Rubanda) district.
Indeed in the National Development Plan 1(NDP1), it had been planned to develop the use of iron ore to produce ingots that would supply steel rolling mills.
And the NDP II earmarked iron ore amongst the 6 minerals for exploitation and value addition during its period, 2014/15-2019/20, aware that the current deficit in the iron and steel sector is about USD 200 million.
BY JOSSY MUHANGI