Uganda to import coal, gas from Tanzania for steel production

Government plans to import coal from the neighbouring Tanzania to support local production of iron and steel. The plan is contained in the National Resistance Movement (NRM) five-year re-election manifesto for 2021 – 2026 launched by President Yoweri Museveni on November 3, 2020.

“In the short term, working with the private sector, Uganda Railways Corporation (URC) will provide a dedicated ship to transport coal from Tanzania to Uganda to support local production of liquid steel,” the Manifesto reads in part. In the manifesto Museveni also pledges to reduce transportation of the iron ore from Muko and other mines to factory for processing. Iron ore is a heavy mineral to transport and thus it has to be processed near the mines.

“In the medium term, government will develop the natural gas pipeline from Tanzania to Uganda to support local production of liquid steel,” the Manifesto reads. Natural gas and coal are crucial in the production of the iron and steel.

Though Uganda is endowed with high quality iron ore deposits mainly in south western region, it not yet to be fully exploited due to lack of raw materials such as coal or natural gas. For instance, a total of 318 million tonnes of iron ore has been discovered in Rutenga, Kabale and Muko in southwestern Uganda. New discoveries have also been made in Kanungu, Buhara (Kabale district) and Mayuge districts an estimated total reserve of 200 million tonnes. Iron ore is a crucial in making iron and steel products – which are majorly used in construction, electrical appliances and cars among others – and the back borne of industrialization. This perhaps explains why government is placing a lot of emphasis on iron ore value addition among others.

“A strong integrated iron and steel industry will not only facilitate industrial take-off in the country but also lead to saving of forex expenditure, increase employment opportunities and form a strong basis to support the growth of other sectors through forward-back ward linkages,” the President notes in the manifesto.

In addition to developing the iron and steel industry, Museveni makes a raft of promises geared towards “a mineral led industrialization”. For instance, the President proposes a two-pronged approach.

First, minerals whose quantities and values are known — and where studies and work towards their development have already commenced — will be fully developed using a science-led approach and an integrated industry will be built around them,” the manifesto reads in part.

The manifesto particularly notes that the iron ore industry will be prioritized and developed along the entire value chain. The second approach that the President and the party intends to utilize is undertaking more feasibility studies to ascertain the quantity and quality of the minerals for development.

“We are going to increase value-addition in iron ore, gold, copper, phosphates, and development minerals [marble, silica sand, aggregate, and limestone]. Conduct bankable feasibility studies for strategic high-value minerals, namely iron ore, gold, rare earth elements, uranium and tin, tungsten and tantalum (3Ts), to attract investment,” Museveni notes in the manifesto.

The party once re-elected into power, also plans to explore the mineral potential in Busoga sub-region, especially in regards to rare earth elements among others.

“Using import substitution and export promotion strategies, NRM’s policy is to industrialize using Uganda’s mineral resources. This is why, amidst criticisms, we banned the export of raw/unprocessed minerals. Our policy is to use our scientists to develop integrated industries around every single mineral found in Uganda.”

Museveni also intends to prioritize mapping, registration and organisation of artisanal and small-scale miners countrywide in the next five years. He pledges, “The target is to zone areas for their operations and ensure that 40 location licenses are issued to them [artisanal and small-scale miners], establish and gazette mineral buying centers.”