As the green energy revolution takes off in the wake of global warming, there is an unprecedented surge in demand for cobalt – the key component for making electric car batteries and solar panels – and Uganda is now positioning itself as a new source of the sought-after metal for today’s global energy market.
Along with copper, cobalt was first discovered in Kilembe on the foothills of the snow-capped Rwenzori mountains on Uganda’s border with the Democratic Republic of Congo (DRC) way back in the 1950s, but it was copper that was given priority because of the low demand for cobalt at the time.
“Back then cobalt was negligible because of its low prices on the international market, so Kilembe Mines decided to focus on copper, which was far more lucrative. In fact, the company didn’t even bother to process cobalt,” says Engineer Edison Kambere, the acting CEO of the Kilembe copper-cobalt mine, which boasts an estimated 4.5 million deposits of copper ore and an undetermined amount of cobalt.
Now with the current green energy revolution taking shape, Mr Kambere says that demand for cobalt has grown exponentially over the years and the mineral is now several times more expensive than copper, which offers Uganda an irresistible opportunity to tap into this growing market.
The London Metal Exchange data indicates that one tonne of cobalt costs $85,318 while copper is going for $10,317 – as of March 2022.
Seeking investors
According to Engineer Vincent Kedi, the Commissioner for Mines at Uganda’s Ministry of Energy and Mineral Development, his ministry has already put together a team of geologists who are currently evaluating the amount of cobalt ore available for mining in Kilembe.
And as the evaluation of Uganda’s cobalt deposits goes on, Mr Kambere says that the government is already in the final stages of revamping the Kilembe copper-cobalt mine and will soon be signing concession agreements with investors.
“We have already drafted a Mineral Production Sharing Agreement and are now waiting for the government to officially advertise,” Mr Kambere told Nature Guardian.
Australian cobalt development company Jervois Mining Ltd was the last to explore cobalt deposits in the country between 2019 and 2021. In January 2021, the company announced it was suspending all exploration activities due to Covi-19 risks and undisclosed regulatory factors.
Uganda’s potential for cobalt production lies in its geological association with the cobalt belts of the DRC’s Katanga region in the country’s east, which is currently known for being the world’s largest supplier of cobalt.
However, eastern DRC is also one of the world’s most volatile regions, which makes cobalt exploration there a risky adventure.
So, with Uganda’s relatively stable political environment, the government is seeking to provide a solution to the growing demand for an increasingly scarce metal.
Kilembe Mines’ start-stop journey
Kilembe Mines began operations in 1950 and thrived throughout the 1950s, 1960s and 1970s. During peak production between 1957 and 1979, Kilembe was exporting about 3.3 million tonnes of blister copper per year, according to Mr Kambere.
But when in 1975 the Ugandan government took over management of the company from Canadian mining giant Falconbridge, mismanagement and a steep fall in global copper ore prices led to closure of the company’s operations in 1982.
In 1992, however, the Ugandan government set up the Kasese Cobalt Company to recover metal from unstable stockpiles of sulphide concentrate at Kilembe Mines.
Records show that the government owned 25 per cent of the $153 million project while the remaining 75 per cent was owned by private foreign investors such as France’s La Source and Multilateral Investments Guarantee Agency (MIGA), a member of the World Bank Group.
Production started in 1999 and, during peak production in 2007, Kasese Cobalt Company produced 636 tonnes of cobalt and Uganda earned $6.1 million (Ush21.2 billion) from exporting the metal, according to statistics from the Ministry of Energy and Mineral Development.
In 2013 production stopped when the overground reserves ran out. In the same year the Ugandan government offered a 25-year concession to Chinese mining company Tibet Hima to revive Kilembe Mines, but the deal survived for only four years following accusations by the government that Tibet had failed to honour the agreement.
According to Engineer Kedi, there are currently five million tonnes of cobalt stockpiles at Kilembe Mines, which was left behind by Tibet Hima.
Economic value
Already, the Kasese Cobalt Company has an installed cobalt plant with the capacity of processing 1,000 tonnes per year. If all this processed cobalt is exported, it could earn Uganda over $85 million (Ush306 billion) per year in foreign exchange – going by the current rates.
Once production resumes, most of the cobalt ore will most likely be exported to China and the United States – the two countries that are currently taking the lead in the production of electric vehicles.
Still, some cobalt ore can be used locally by manufacturers such as Uganda Batteries who manufacture solar batteries, which would effectively reduce Uganda’s import bill and accelerate economic development.
