Storm hangs over Uganda’s biggest wolfram mine

By Stephen Nuwagira

 

Joseph Ntware, a resident of Kirwa village in Nyarubuye sub-county, Kisoro district, looks desolately as his five children play around the compound dressed in tatters. Although the children are of school-going age, none of them is in school. He says all the schools in the neighbourhood charge fees that he cannot afford. Ntware, a former miner at the Kirwa wolfram mine, says since activity at the mine was hit by ownership wrangles in 2002, he has not got a permanent job to enable him provide for his family. Like most of his former colleagues, he is now a peasant farmer, but can barely get enough food for his family.  

The Kirwa mine, located about 8km from Kisoro town, is said to be the largest with wolfram deposits in the country. It covers about seven square kilometres, with a yet-to-be verified volume and is economically viable, according to the Kisoro natural resources officer, Vincent Mudanga.



Wolfram is a very precious metal today, used in the making of drilling metals, armour plates, rocket engines and parts, electric bulbs and filament and bombs. It has a huge market in China.

Kirwa wolfram mine ownership

According a sale deed seen by this writer, the wolfram mine is owned by Sebuhigiriza Rwabiti’s Kirwa Wolfram Mines Limited. The sale agreement between the first mine owner, Polis Kikkides and Rwabiti indicates that Rwabiti bought the wolfram mine at sh1.3m in 1974. The businessman operated it from 1974 to 2002, when he was denied a licence by the geological survey and mineral development department officials, available documents indicate.

The genesis of the ownership wrangle

Rwabiti says the mineral development department officials refused to renew his licence after he was advised to suspend payment of licence renewal fees when world wolfram prices tumbled.

“I followed the advice and asked for a waiver in July 1998, waiting for the prices recovered. I was, however, surprised when they later sent me a letter, indicating that I had defaulted on my payments,” Rwabiti notes.



Kirwa wolfram mine entrance

 “When the wolfram market started to recover in the early 2000s, the scramble for wolfram at Kirwa also started. The officials connived with new investors to rob me of my rights in the mine,” Rwabiti explains.

He says when he asked them what the problem was; they didn’t give him convincing answers. “They instead gave a prospecting licence to Dei Minerals International, which is owned by a former official from the department, Mathias Magoola,” he says.

He points out that he had applied for the renewal of the licence on May 1, 2001 (lease number 2495), but the officials kept quiet until 2003 “when they turned around, saying they hadn’t received the renewal fees. “Interestingly, the money was instead receipted as part-payment for surface rent for 2495 on general receipt number 2604085,” he notes, adding that the then minerals commissioner Joshua Tuhumwire, later informed him that his application had been rejected.

“He alleged that Kirwa Wolfram Mines didn’t have the technical capacity and experience to run the mine, but Kirwa was at the time one the oldest mining firms in the country. Ironically, Dei, which was granted a prospecting licence for Kirwa, was incorporated on September 12, 2006. Ten days later, on September 22, 2006, it applied for a licence and got it on September 28.This was super-fast,” Rwabiti remarks.

According to the mines law, one is expected to inform the mineral development ministry about their interest to continue running a mine. “I did this and I have evidence to that effect,” he points out.

However, Tuhumwire said Rwabiti’s lease had expired, and with it, the businessman’s operational rights over the mine, when asked of his role in the wrangle by this writer.

“You can’t buy a mine. You can only operate it under a lease from the Government, which is the custodian of all mineral deposit areas,” he argued.

Destruction reigns supreme

The takeover of the mine by Dei Minerals sparked off a wave of destruction of Rwabiti’s properties and mining equipment worth trillions of shillings.

“Magoola came with a gang of thugs, equipped with guns, batons and machetes, threatening to evict us from our property and offices. Later, other five companies came and stole machinery and unprocessed wolfram, and burnt down some houses,” he says.

Local leaders intervene

In 2008, a meeting convened by the Kisoro district leadership and chaired by the then RDC Hajji Ahmed Ali Doka to establish facts about wrangles noted that some officials in the mineral development department had interests in the Kirwa wolfram mine.

“This is the reason they were hastening to grant a licence to Dei,” they observed. The local leaders then appealed to the Government to protect the rights of individual property owners as instituted in the Uganda Constitution. “Dispossessing property from some Ugandans and giving it to others without valuation and due compensation is not in conformity with the principles of justice,” they argued.

The meeting that was also attended by LC 1 and III officials, Kisoro DPC, ISO officials, MPs from Kisoro, representative of the two conflicting firms and over 400 residents of Kirwa and its neighbourhood, recommended that the mine be returned to Rwabiti.

Rwabiti petitions the President

Rwabiti protested the granting of a licence to Dei and petitioned President Museveni over the issue. President Museveni then ordered the then energy and mineral development minister Hilary Onek to study the case and renew Rwabiti’s mining and licence.

“The above named person bought the mine with his own money from a previous expatriate owner and has owned it for 36 years as his family property. He complains that he has met considerable difficulties at the hands of your ministry officials in having his licences renewed in spite of having complied with all the requirements, including payment of the renewal fees.

He says the mine has been informally allocated to another group of people, who have unlawfully occupied it and evicted him…,” Museveni said in a March 20, 2010 letter.

President Museveni said it was the Government’s policy to encourage meaningful investment.



One of the destroyed wolfram milling machines

 “This proprietor has heavily invested in the mine, buying expensive mining equipment. It cannot be fair that his property should be so callously removed from him and just handed over to other people. I am, therefore, directing you to study the matter and rectify the situation and inform me accordingly,” he ordered Onek in a letter copied to the energy and minerals permanent secretary, the commissioner of mines and geological surveys and the Kisoro RDC.

According to the minister’s findings, Dei was granted a prospecting licence, but one of its workers Saidi Mvumba was found guilty by a Kisoro magistrate’s court to have illegally mined 470kg of wolfram ore from EL 0370, which was and is still an exploration area. The same court also charged Dei and its ‘partner’ Videocom Natural Resources of illegally mining 2.5 tonnes of wolfram ore and smuggling it to Rwanda. It also found that there the two companies forged a transfer of exploration rights from Videocom to Dei (Dei had earlier reportedly sold 60% of its stake to Videocom). The two firms that were preferred by the minerals department due to their “experience” did not invest anything in the mine a part from carrying out illegal mining activities, the inquiry discovered.

The probe also found that the ‘two’ companies were all represented by Magoola, an unacceptable anomaly, indicating that Videocom had no physical presence in the country.

“On the other hand, Rwabiti has contacted a German firm to come and partner with him to develop the Kirwa wolfram mine. He should be given a chance,” Onek’s response to Museveni indicates. He afterwards directed the geological survey and mines commissioner to immediately cancel the exploration licence granted to Dei and Videocom and give a prospecting licence to Rwabiti, with the exploration licence coming later.

Mine changes more hands

A memorandum of receipt dated January 7, 2011 indicates that Dei had hired out the mine to a Rwandan named Iyakaremye Anthere, through a one G. Nzabonimpa, a resident of Kisoro, at sh70m. The new “owner” was supposed to use the mine for 12 months. The memo was signed by Magoola and Nzabonimpa. Nzambonimpa told this writer that they were not aware of the ownership wrangle when they signed the deal to operate the mine.

Dei also entered into a joint venture deal with Fax Group Metal Limited on May 8, 2011. According to the venture deed, Fax Group was supposed to fund mining operations at Kirwa. “The first party hereby acknowledges $30,000 (about sh78.3m) on the execution of these presents, while $70,000 will be paid in two weeks, but Dei will supervise the production of at least two tonnes of wolfram and sell exclusively to Fax,” the deed indicates. The $30,000 was to be guaranteed by four tonnes of wolfram ore, while nine tonnes were guarantee for the $70,000. The deed was signed by Magoola for Dei and a one Boris Libenson on behalf of Fax Group.

The present status of the Kirwa wolfram mines

The district leadership through the Kisoro natural resources officer, Vincent Mudanga, has suspended all activities at the wolfram mines and deployed Police to arrest anyone caught mining. This followed the Government’s move to gazette the mine as a protected area until the rightful owner is identified, and the expiry of Dei Minerals International prospecting licence in August, 2011.

“We are not going to allow in anybody until the Government gives us an express order after determining the right owner of the mine,” Mudanga says.

“The Government and the district have lost a lot of revenue and the residents, who would better off now, are wallowing in abject poverty,” he notes.

However, a visit by this writer on October 27 showed that there were illegal activities going on because there was fresh mud that was ferried from the mine that very day. The guide, who took us around and into mine tunnel, confirmed to have seen people there contrary to the district order barring anyone from carrying any activity.

The Police officer heading a make-shift Police post near the mine, Sergeant Emmanuel Nsabimana, said they intervened after locals were instigated by unknown people and started vandalising Rwabiti’s remaining mining equipment, property and burnt about eight houses from October 9-11, 2011. The Police deployed at the mine on October 12. Nsabimana says, however, that no culprits have been arrested so far for the vandalism.

He also notes that the firms that were operating the mine were using locals and Rwandese to carryout illegal mining.



A house that was destroyed last October

 This was confirmed by the Kisoro deputy RDC, Gideon Aheebwa. “Magoola came, saying he was prospecting, but we realised later that he was carrying out mining and we stopped his operations.”

Dei’s Magoola reacts

Magoola, however, says all these accusations against Dei are fabrications intended to disrepute his name and that of the company. He challenges those that claim he was smuggling wolfram through Rwanda to bring evidence. He says because of the accusations he lost a joint venture deal with an unnamed UK firm, where had raised about $100m to develop the mine.

Magoola also claims his company has far more expertise in mining than Rwabiti’s Kirwa Wolfram Mines Limited. “These people are jokers and not businessmen. Besides, mining is not gambling. Unlike Rwabiti, we have experienced geologists and other experts, plus the financial muscle to capitalise and develop the mine,” he says.

Interestingly, he also claims that mineral development officials were against him because they “think that I will expose them.” Magoola also ridiculed claims by Rwabiti that he brought thugs to vandalise his (Rwabiti) property after his was granted a prospecting licence. “The Rwabitis thought that they could deny us entry into mine, but we came with the then minerals commissioner Grace Naku who handed over the mine to us. The Police and local government officials were also there. How then could we vandalise his property or come with thugs?”

Although Magoola says his company has the financial muscle to capitalize the mine, there is nothing to show at the mine he operated for over six years apart from a 10 by 6 container that he was using as his store and office.

Current developments

Last month (December 20110, President Yoweri Museveni confirmed to the people of Kisoro that he instructed the then mineral development minister Hilary Onek to ensure that Rwabiti gets his mining rights back. The President also disowned a letter purported to have been written by him in March 2010 withdrawing the directive, saying it was a forgery. This was after agriculture minister Tress Buchanayandi, had asked him to clear the air about two letters.