Jinja, Uganda | THE INDEPENDENT | Rwenzori Rare Metals Limited has finally been awarded a 21-year mining license to develop the Makuutu rare earth elements mining Project.
Energy and Minerals Development Minister, Ruth Nankabirwa and the CEO of Rwenzori Rare Metals Limited, Warren Tregurtha exchanged signatures for the projects whose mining license commenced on 28th December 2023.
According to Nankbirwa, Rwenzori Rare Metals Limited becomes the first Large Scale Mines to be licensed under the new Mining and Minerals law enacted by Parliament in 2022.
“This large-scale mining License award represents the first step in developing one of the world’s heavy rare earth element assets,” said Nankbirwa.
“This project should be supported all through because the outcome is going to support the country, it is going to benefit the people of Busoga because they will receive royalties, and they will be able to change their lives,’’ Nankbirwa added.
It is hoped that once fully developed, the project that will span through some of the districts in Busoga will be the first mine in Africa to exploit this type of mineral extracted from clay.
These types of minerals have existed in Southern China. The Makuutu rare earth minerals reportedly have some 17 minerals that have been globally designated as minerals of global importance, especially within the global energy transition debate. The licensed area of operation by Rwenzori Rare Metals Limited will cover an area of 44 square kilometers.
The Minister tasked the Company to adhere to a set of conditions including the need to ensure that operations begin within a year from the award of license.
The Minister further reminded the investor that the government will automatically claim its 15% share in the project as stipulated in the Mining and Minerals Act 2022.
“The law introduced state participation. I’m at the tail end of establishing the Uganda National Mining Company. This company is going to work with you, it holds the government’s interests of 15%,” she revealed.
Other Conditions Apart from the start participation requirement, Rwenzori Rare Metals Limited will only kick off mine development operations after it has fully paid the license fees and compensation to land owners for the exclusive use of the land.
Unlike in other countries where such minerals have been found in rocks, the rare earth elements in Busoga are found in clay-type deposits. The Acting Commissioner For Mines, Vincent Kedi told URN the technology being suggested to recover or extract rare earth elements in Uganda is likely not to be so sophisticated and will have less impact on the environment.
Rwenzori Rare Metals Limited has suggested using a technology known as the ionic desorption process to recover the mineral. He said the land owner where the minerals are found could choose to lease out their land and later get back after the company has restored it as per the Environment Impacts Assessment and Social Impact Assessments approved by NEMA.
The developers have suggested several compensation models including exchanging land for cash, land for land, and land buildings. The company is required to carry out mining operations on a scale that delivers a minimum annual production of five metric tons in run-of-mine (ROM) or unprocessed minerals. “This license has an annex attached to it. There are several minerals like 17 of them. So you must add value to those minerals. That includes processing and refining. I’m seeing a refinery being established. May God guide you to get all the money,” Nankbirwa suggested.
Under the Mining Act 2022, the award of exploration and mining licenses should be done following a competitive bidding round similar to the procedure being used in the oil and gas sector.
A senior officer who has been following the process said Rwenzori Rare Metals Limited was not particularly affected by that law concerning exploration because it had already six exploration licenses. The officer who asked for anonymity said the ministry said the award of the license had to be delayed so that the mining operations are covered under the Mining and Minerals Act 2022.
Rwenzori Rare Metals Limited has been operating in Busoga areas since 2016. The licensee is further not allowed to transfer the large-scale mining license or a share of it before the full payment and compensation. “You know you move away from this room and begin waving it. And you farm out, somebody else farms in and you get your money. This is not allowed,” Nankbirwa warned.
There have been reports that an Australian company IonicRE was in the advanced stages of increasing its shareholding in the Makuutu projects from 60% to 94%. That would mean that Rwenzori Rare Metals Limited would become a minority shareholder. The CEO of Rwenzori Rare Metals Limited, Warren Tregurtha, declined to comment on the matter. The total mineral resource estimate (MRE) of the Makuutu project is estimated at 532 million tonnes.
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