HERE IT ISHISTORICAL NEWS: Transcripts
Rio Tinto buys mining operation in Uganda
Frank Jomo
17 January 2007
Rio Tinto is spreading its tentacles to Uganda where it is planning to exploit vermiculite deposits near Tororo, some 200km east of the legislative capital, Kampala.
BLANTYRE (Mineweb.com) --One of the world’s leading mining and exploration companies – Rio Tinto - is spreading its tentacles to Uganda where its subsidiary, Rio Tinto Uganda, is planning to exploit vermiculite deposits near Tororo, some 200km east of the legislative capital, Kampala.
East African Business Week quoted Executive Director of the Uganda Investment Authority (UIA) Dr. Maggie Kigozi as saying Uganda has managed to court one of the world’s mining giants to invest in the country.
She said Rio Tinto will take over an existing vermiculite mine operated on a small scale by a Candian junior mining company.
“We are happy they are here,” Kigozi was quoted by Business Week as telling journalists during a press conference meant to highlight Uganda’s investment performance in 2006. “Of course we will interest them in other minerals.”
A Rio Tinto spokesman in London told Mineweb that the deal had been made with IBI Corp of Canada – TSXV:IBI - the owner of the existing Namekara mine and that due diligence was being undertaken on the asset before agreement would be finalized. The deal would involve a total purchase price of US$5 million and an ongoing sliding scale royalty on production for IBI. IBI in a statement also noted that there were indications of copper in the vermiculite orebody and should anything come of this then a further royalty based on net copper smelter returns would be forthcoming.
Rio Tinto already mines vermiculite as a byproduct at its Palabora operations in South Africa.
Reports indicate that vermiculite is in high demand in east Africa. An investment company, Kenmag Investments Limited has been mining vermiculite at Lodosoit in Uganda’s Makueni district and its exports to Kenya alone, have been growing since 2000. IBI reports that the size and quality of the Namekara resource, will enable Rio Tinto to develop substantial and sustainable global sales and distribution for Namekara vermiculite, particularly for the mine's abundant large-size grades, which are in short supply in world markets.
With reports of Rio Tinto taking over vermiculite mining, Business Week says prospects look real given Kenya’s demand for the product. Other mining investment ventures the Ugandan government wants to dangle in front of Rio Tinto and other investors include iron ore, copper, gold and cement.
According to Kigozi, her organization has received information that there is gold mineralization near Lugazi, a town situated 50km east of Kampala in central Uganda and would want companies to go there and explore.
Vermiculite which has been used for over 80 years in the field of construction, agricultural and industrial markets is used for insulation, building of swimming pools, fire-proofing of structural steel and pipes and as a soil additive.
Some estimates suggest that Uganda production of the mineral is now set to rise from 5,000 tonnes last year to 20,000 tonnes this year owing to the coming in of Rio Tinto.
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