With the increasing demand for steel products across the region, companies are looking at Uganda’s deposits of largely unexploited iron ore as a source of cheap raw material.
Among them, Roofings Ltd announced recently that it is ready to venture into iron ore mining. Speaking to visiting engineers at Roofings Rolling Mills in Namanve last week, Martin Kyeyune, the finance and economic advisor, said if iron ore is mined locally, more income will be earned.
“Mining is known to be capital- intensive, but when there is demand, capital will always be available and we are ready to mobilise it; but government should first show interest,” he said.
“Mining iron ore requires reducing agents that include coal and natural gas. Luckily, Uganda is endowed with natural gas and many countries in Africa have coal,” he said.
Kyeyune said miners would need infrastructure to evacuate the large volumes of natural gas existing in the Albertine region. A pipeline for this would have to be built to Kigezi sub-region which is endowed with iron ore.
“Luckily government is constructing a pipeline to Tanzania; they can create a duo carriage where natural gas is brought to Tororo and Kigezi sub-region,” Kyeyune added.
According to Kyeyune, to set up an iron processing plant requires a capital base of between $300 million and $1 billion.
Trade, Industry and Cooperatives minister Amelia Kyambadde said Uganda has a lot of iron ore but local engineers are not coming up with plans on how it can be exploited.
She said the per capita consumption of finished steel goods in China is 500kg; South Africa, 90kg; and Kenya, 30kg, but Uganda’s 5kgs means Uganda is lowest consumer of steel.
“We are in trouble and we must develop it, but consumption per capita need to improve to at least the African average which 30kg,” she said.
The only challenge is that Uganda has taken the up–down approach as opposed to down-up approach which starts with mining up to the finished products.
Iron and steel processing started in 1964 with Uganda Baati and Tororo Steel Works but the revival was private sector-led in the 1980s. Currently, Uganda has over 22 private steel companies. Roofings Rolling Mills is a $145 million investment and has built one of the largest modern steel complexes operating in East Africa at its Namanve establishment.
Last year, Uganda imported $283 million worth of steel goods with exports recorded at $66 million, generating a trade deficit of $217 million.