In 2013 government awarded the concession to Tibet Hima Mining Company to run till 2038.
According to the agreement, the company, which reportedly was the best, was to pay a signature bonus of $4.3 million (Shs 16 billion), concession fees of Shs 3.6 billion and rehabilitate the mines at 600 billion shillings.
Tibet Hima Mining Company was supposed to process five million tonnes of copper ore per year but later requested to export bulk copper concentrates.
In a meeting between Edwards Katto, the head of department of Geological Surveys and Mines, and the chair of the concessionaire, Li Wei Guo, the government gave seven conditions before any exportation of copper concentrates.
The conditions included, among others, the company providing a full feasibility study, estimates of ore reserves, the amount of ore to produce 30,000 tonnes of copper and a smelting plant.
Since 2013 the company, although active in the mines, has defaulted on most of its promises, despite many meetings with the government to salvage the situation.
This prompted the head of the department of Geological Surveys and Mines, Edwards Katto, to generate a dossier on the company and submitted to the president, copied to the line ministry and related government agencies.
Both the Auditor General and National Environmental Management Authority (NEMA) reported default with payment and non-compliance with environmental standards respectively.
It emerged that the company is primarily a motorcycle firm and lacks competencies in copper mining and smelting, in contrast to the firms it beat like Gingko Energy, Sino-Steel and Tibet Hima Industries, all from China, Konkola Copper Mines from Zambia and Shree Mines from Australia.
It also emerged that in order to win the concession, the company offered bribes to several top officials in the ministries of energy and water and environment, as well as the Attorney General’s office.
Mid this year President Yoweri Museveni ordered for cancellation of the concession.
The president also agreed with Rwenzori region MPs led by the leader of opposition in Parliament, Winnie Kiiza, that the company is not delivering as per its concession terms.
Despite the order, the company is still operating the Kilembe Copper Mines, since the government has not moved to formally terminate the concession.
Addressing journalists in Kampala, the permanent secretary in the ministry of Finance, Keith Muhakanizi, said the delay was because the government needs to finish the legal process of cancelling the project.
Jim Mugunga, the finance ministry publicist, said the Solicitor General Atoke had given a “no objection to termination of the concession”.
Mugunga said nthe termination process is on and a decision will be made at an appropriate time.