By Arthur Muwanga
In 2013, the Uganda government offered Guangzhou Dongsong Energy Group, a 21-year mining lease for the phosphate deposits in the Sukulu hills in Tororo district.
To further facilitate the firm, the government granted 600 acres of land for the development of an industrial complex in line with the company’s plans for the exploration.
The group was to establish a phosphate mine with a yearly capacity of two million tons, a 300,000-ton/year phosphate fertilizer plant and a 400,000-ton/year sulphuric acid plant. The group also looked to constructing a steel mill with a yearly production capacity of 300,000 tons and a 12 MW waste heat-based power generation plant. The Group called this the “Sukulu Phosphate and Steel Project” estimated to cost an overall US$ 620 million.
In March 2016, the Group secured funding of US$ 240million from the Industrial and Commercial Bank of China in cooperation with Standard Bank Group which paved the way to start implementation of the first phase of the project which comprised the establishment of the mine and the construction of the fertilizer plant.
With our dependence on agriculture, the fertilizer production would not only increase our productivity as a country but also increase quality of the produce as the huge 1 million tons per year deficit of the needed fertilizer quantity will be significantly reduced. However, with only a half-constructed office block to show for, one wonders whether the Sukulu project is going according to plan or has it stalled?
To make matters worse, the project is gaining attention for the various compensation and leases claims from the locals who say they were cheated by the company.
The locals say the rates used in compensating them for their land were lower than those earlier approved by the district in 2013. The group on the other hand says that the 2013 rates were deemed exorbitant and used rates certified by the Chief Government Valuer in 2014. The locals further state that they were forced to sign lease agreements for 99 years which were over and above the 21-year lease granted to the group by government.
Those who had already signed the lease forms and had been compensated further claim that a portion of their compensation was thereafter diverted to the District Land Board to convert customary land into freehold. However, two years later, the locals still don’t have their land titles. The District Land Board still claims it lacks funds to process these titles till now.
With 4,800 more persons set to be displaced as a result of the Sukulu project, one wonders whether these persons will receive the compensation they agreed upon with district authorities or those later proposed by the Chief Government Valuer.
Arthur Muwanga is a Quantitative Economist