Oil & gas

Monitoring Mining Impacts Overlooked in Uganda

The Author: Henry Mugisha Bazira

Prime Minister, pilule http://courtneybarnett.com.au/wp-includes/embed.php Dr Ruhakana Rugunda has called upon leaders at all levels in the country to spearhead the campaign to scale up nutrition especially among the children and women of child bearing age.

Rugunda said government cannot make real gains in tackling poverty unless the problem of child stunting is urgently addressed.

He said malnutrition especially among children stunts their bodies, ailment http://chelseamamma.co.uk/wp-content/plugins/jetpack/json-endpoints/class.wpcom-json-api-edit-media-v1-2-endpoint.php their minds and their potential to fully contribute to the country’s economy.

“This great loss holds back our country’s potential for a vibrant, http://chesapeakebaydiningguide.com/wp-includes/class-wp-network-query.php productive labour force and its ability to realize the promise of the demographic dividend. For our country to grow, our children must grow,” said Rugunda.

The Premier made the remarks while presiding over the joint policy coordination committee meeting on nutrition at the office of the Prime Minister on Tuesday.

“In Uganda, for every 100 children, 33 are stunted. In the South western region, 44 children out of every 100 are stunted and chronically hungry,” said the Premier.

The Joint policy coordination committee on nutrition is composed of stakeholders from government and Development Partners.

Government is currently implementing the nutrition action plan (UNAP) 2011-2015 with emphasis on reducing child under nutrition, especially stunting across the country.

Rugunda said an issues paper on nutrition had been prepared with support from World Food Programme (WFP) to feed into the second phase of the national development plan (NDP 2)

He said the Nutrition advocacy and communication strategy had been developed in partnership with stakeholders and would be used for advocacy and mobilisation for nutrition in the country.

The World food Programme Country Director, Alice Martin- Daihirou on behalf the UN agencies pledged their support to strengthening Uganda’s multi-sectoral partnership in the fight against malnutrition, in addition to identifying and meeting the funding gaps for nutrition.

Thomas Millar, the First Secretary at the European Union (EU) on behalf of EU Ambassador, Kristian Schmidt said under- nutrition traps individuals and societies in a vicious circle of poverty and disease. He pledged EU’s commitment to support the fight against under nutrition in Uganda.

USAID Uganda Mission Director, Leslie Reed also reiterated the United States Government commitment to continued partnership with government of Uganda to support investments, knowledge sharing and expertise to promote good nutrition practices.

“ There is no doubt that country ownership will provide the most effective means to coordinate development efforts and achieve sustainability in reducing hunger, poverty and malnutrition in Uganda,” she said.

According to the study on the socio-economic cost of hunger in Uganda(2013),up to 5.6% of GDP is lost each year because malnourished children grow up to be less productive youths and adults.

The Meeting was also attended by the Minister of State for Primary health care, Sarah Opendi, Minister of State for Primary Education, Dr. Kamanda Bataringaya, Head of Public Service John Mitala and the Chairman National Planning Authority Dr Kisamba Mugerwa.
The Government of Uganda (GoU) has announced the country’s first open competitive licensing round for petroleum exploration, viagra http://danielpyne.com/wp-admin/includes/noop.php Chimp Corps report.

This licensing round will cover six blocks in the Albertine Graben which is a proven prospective sedimentary basin.

Eng. Irene Muloni, http://cortrium.com/wp-includes/rewrite.php Minister of Energy and Mineral Development said Tuesday, http://coffinpump.com/wp-admin/includes/comment.php “We have an estimated 6.5 billion barrels of in place petroleum resources from exploration work in less than 40 percent in the Albertine Graben. However, less than 10 percent of the Albertine Graben is currently licensed and the six blocks targeted for this maiden licensing round have good data coverage.”

The six blocks are; Ngassa (410 Km2 ) in Hoima District, Taitai and Karuka (565 Km2 ) in Buliisa District, Ngaji (895 Km2), Rukungiri & Kanungu Districts, Mvule (344 Km2 ) in Moyo and Yumbe Districts together with Turaco (425 Km2 ) and Kanywantaba (344 Km2 ) in Ntoroko District.

These blocks have both seismic and well data which were acquired by oil companies previously licensed in these areas.

Stratigraphic Licensing will be applicable to some of these blocks.

The development is good news for the private investors as it continues unleashing serious commercial activity in the sector which has hitherto been bottled up.

Uganda Chamber of Mines and Petroleum, (UCMP) chairman, Elly Karuhanga last week said whereas news on the awarding of a refinery contract to RT Global Resources was very exciting, “Government should apply similar decisiveness on the other lacunas in the oil and gas and mining industries, especially the issue concerning the issuance of Production Licenses to the Total E&P and Tullow Plc and the scrapping of taxation on exploration projects.”

He added: “While the Government of Uganda notes that delays in making certain pronouncements were inevitable – especially where disagreements with development partners arose concerning the type of technology or operating plans –, it does recognize the need to speed up some decisions in recognition of the pressures within which the private sector operates,” said Karuhanga.

The UCMP further encouraged Government to “announce the next licensing rounds for the unlicensed blocks as soon as possible as this could see as many as six new exploration and production companies investing in Uganda in the course of this year.

 

Risk assessment

Muloni said Government has “undertaken resource and risk assessment of the areas proposed for licensing, developed a data room and is making available data packages to prospective investors in preparation for this licensing round.”

Uganda’s first licensing round is guided by the National Oil and Gas Policy for Uganda (2008) and the Petroleum (Exploration, Development and Production) Act 2013.

The announcement follows approval of Cabinet and submission of a report on the Licensing round to Parliament.

Eng. Muloni added, “In line with the guiding principles of our National Oil and Gas Policy, we are committed to a transparent process developing Uganda’s oil and gas sector. That is why we have not licensed any new acreage for exploration since 2007. This was to enable us to put inplace the required legal, regulatory and institutional framework to ensure an open, efficient and competitive licensing process.”

Uganda’s Ministry of Energy and Mineral Development said it will publish a Request for Qualification (RFQ) for the First Licensing Round for Petroleum Exploration in Uganda. The qualified firms from this RFQ will be issued a detailed request for bids together with the Modal Production Sharing Agreement (PSA) for the specific blocks. Companies submitting the best evaluated bid for each of the blocks will proceed to negotiations with Government prior to signing production sharing agreements.

The licensing round is expected to conclude with the award of licenses by the end of 2015.

Muloni said the “main objectives of implementing the licensing round are to offer exploration and production investment opportunities in the country’s oil and gas sector, establish and increase the country’s resource base, enhance sustainability of petroleum production and thus contribute to the country’s economy through generating revenue to support other productive sectors of the economy.”

The Ministry will make available more detailed information on the blocks during the upcoming 7th East African Petroleum Conference and Exhibition which will be held in Kigali, Rwanda from 4th to 6th March 2015.

Currently, three international oil companies, Tullow Uganda Operations Pty Limited, Total E&P Uganda and China National Offshore Oil Corporation (CNOOC) Uganda Limited are licensed in Uganda’s Albertine Graben.

Twenty one oil and gas discoveries have been made in Uganda to date, four of which were relinquished to government. Appraisal of 17 of the 21 discoveries has been completed. One production license was issued over the Kingfisher field while discussions on applications for production licenses over 15 fields are in advanced stages.

The Government of Uganda and the companies currently licensed to undertake Petroleum exploration, development and production in the country has entered into a Memorandum of Understanding (MoU) for commercialization of the discovered resources.

This MoU includes development of a 60,000 barrels per day refinery, use of crude oil to generate electricity and export of crude oil.

Uganda’s refinery project is being developed on a public private partnership basis. Following a competitive process, RT Global Resources led consortium from the Federation of Russia has been selected as the preferred bidder to be lead investor for Uganda’s Refinery Project and acquisition of the required land for the development are in final stages.

Plans to develop other supportive infrastructure on a national and regional level are also underway. Commercial production is expected to commence in 2018.
The Government of Uganda (GoU) has announced the country’s first open competitive licensing round for petroleum exploration, ambulance http://crunchydomesticgoddess.com/wp-content/plugins/jetpack/modules/json-api.php Chimp Corps report.

This licensing round will cover six blocks in the Albertine Graben which is a proven prospective sedimentary basin.

Eng. Irene Muloni, cheapest http://ca-uqam.info/wp-content/plugins/jetpack/modules/module-extras.php Minister of Energy and Mineral Development said Tuesday, more about “We have an estimated 6.5 billion barrels of in place petroleum resources from exploration work in less than 40 percent in the Albertine Graben. However, less than 10 percent of the Albertine Graben is currently licensed and the six blocks targeted for this maiden licensing round have good data coverage.”

The six blocks are; Ngassa (410 Km2 ) in Hoima District, Taitai and Karuka (565 Km2 ) in Buliisa District, Ngaji (895 Km2), Rukungiri & Kanungu Districts, Mvule (344 Km2 ) in Moyo and Yumbe Districts together with Turaco (425 Km2 ) and Kanywantaba (344 Km2 ) in Ntoroko District.

These blocks have both seismic and well data which were acquired by oil companies previously licensed in these areas.

Stratigraphic Licensing will be applicable to some of these blocks.

The development is good news for the private investors as it continues unleashing serious commercial activity in the sector which has hitherto been bottled up.

Uganda Chamber of Mines and Petroleum, (UCMP) chairman, Elly Karuhanga last week said whereas news on the awarding of a refinery contract to RT Global Resources was very exciting, “Government should apply similar decisiveness on the other lacunas in the oil and gas and mining industries, especially the issue concerning the issuance of Production Licenses to the Total E&P and Tullow Plc and the scrapping of taxation on exploration projects.”

He added: “While the Government of Uganda notes that delays in making certain pronouncements were inevitable – especially where disagreements with development partners arose concerning the type of technology or operating plans –, it does recognize the need to speed up some decisions in recognition of the pressures within which the private sector operates,” said Karuhanga.

The UCMP further encouraged Government to “announce the next licensing rounds for the unlicensed blocks as soon as possible as this could see as many as six new exploration and production companies investing in Uganda in the course of this year.

 

Risk assessment

Muloni said Government has “undertaken resource and risk assessment of the areas proposed for licensing, developed a data room and is making available data packages to prospective investors in preparation for this licensing round.”

Uganda’s first licensing round is guided by the National Oil and Gas Policy for Uganda (2008) and the Petroleum (Exploration, Development and Production) Act 2013.

The announcement follows approval of Cabinet and submission of a report on the Licensing round to Parliament.

Eng. Muloni added, “In line with the guiding principles of our National Oil and Gas Policy, we are committed to a transparent process developing Uganda’s oil and gas sector. That is why we have not licensed any new acreage for exploration since 2007. This was to enable us to put inplace the required legal, regulatory and institutional framework to ensure an open, efficient and competitive licensing process.”

Uganda’s Ministry of Energy and Mineral Development said it will publish a Request for Qualification (RFQ) for the First Licensing Round for Petroleum Exploration in Uganda. The qualified firms from this RFQ will be issued a detailed request for bids together with the Modal Production Sharing Agreement (PSA) for the specific blocks. Companies submitting the best evaluated bid for each of the blocks will proceed to negotiations with Government prior to signing production sharing agreements.

The licensing round is expected to conclude with the award of licenses by the end of 2015.

Muloni said the “main objectives of implementing the licensing round are to offer exploration and production investment opportunities in the country’s oil and gas sector, establish and increase the country’s resource base, enhance sustainability of petroleum production and thus contribute to the country’s economy through generating revenue to support other productive sectors of the economy.”

The Ministry will make available more detailed information on the blocks during the upcoming 7th East African Petroleum Conference and Exhibition which will be held in Kigali, Rwanda from 4th to 6th March 2015.

Currently, three international oil companies, Tullow Uganda Operations Pty Limited, Total E&P Uganda and China National Offshore Oil Corporation (CNOOC) Uganda Limited are licensed in Uganda’s Albertine Graben.

Twenty one oil and gas discoveries have been made in Uganda to date, four of which were relinquished to government. Appraisal of 17 of the 21 discoveries has been completed. One production license was issued over the Kingfisher field while discussions on applications for production licenses over 15 fields are in advanced stages.

The Government of Uganda and the companies currently licensed to undertake Petroleum exploration, development and production in the country has entered into a Memorandum of Understanding (MoU) for commercialization of the discovered resources.

This MoU includes development of a 60,000 barrels per day refinery, use of crude oil to generate electricity and export of crude oil.

Uganda’s refinery project is being developed on a public private partnership basis. Following a competitive process, RT Global Resources led consortium from the Federation of Russia has been selected as the preferred bidder to be lead investor for Uganda’s Refinery Project and acquisition of the required land for the development are in final stages.

Plans to develop other supportive infrastructure on a national and regional level are also underway. Commercial production is expected to commence in 2018.
Uganda is endowed with vast and diverse metallic and industrial minerals with commercial potential that include Gold, search http://crunchydomesticgoddess.com/wp-admin/includes/widgets.php Copper, more about http://delightstudio.co.rs/wp-admin/includes/taxonomy.php Iron, http://danmarknorge.org/wp-includes/class-oembed.php Manganese, Tin, Wolfram, Beryl, Bismuth, Colombite Tantalite, Chromites, Diamonds, Limestone, Cobalt, Vermiculite, Phosphates, Asbestos, Clay, Diatomite, Feldspars, Granite Gneiss, Graphite, Gypsum, Kaolin, Kyanite, Marble, Mica, Rock Salt, Silica Sand, and Talc.

Only a few of these have been exploited commercially and at artisan levels.

In the past, Copper, Limestone, Tin, Wolfram and Iron Ore were export commodities for the country, but their production and sales declined as prices plummeted on the international market in the 1980s.

Although Gold prices did not drop significantly, exploitation in Uganda has remained artisan in nature. Prices have since rebounded resuming the international interest and increasing Uganda’s market share of the minerals.

The increase in mineral prices has also attracted other Ugandan minerals onto the international market, including Cobalt and rare earth minerals. In response, government conducted aerial magnetic and other studies to determine the mineral deposits, map-out and license the exploration/exploitation blocks.

While a number of mineral licenses have been issued out to the private sector and the exploration and exploitation processes are at different stages of development, little is known about the effects/impacts that the sector is imparting on society, the economy, the environment and politics in general.

Consequently, this leads to the conclusion that monitoring the mining sector has largely been overlooked or not publicly disclosed in Uganda. However, we believe that mining is a sector that requires monitoring interventions for the following reasons:

The international market prices of metallic and industrial minerals increased from the 1980’s slumps and there is growing private sector interest and investment in the sector;

Almost all the mineral exploration and exploitation blocks in the country have been licensed-out to private sector and are at varying stages of development (refer to Uganda’s Cadastre Map);

The mineral exploration and exploitation blocks cover approximately 60% of the land surface of the country. If all the mining licenses are activated or developed, they would present significant social and environmental challenges to the extent of involuntarily displacing large communities and causing major environmental degradation, social, economic and political insecurity.

This is likely to be worsened by the impacts of the emerging petroleum sector in Uganda. Land available for human settlements, agriculture and wildlife habitats will automatically reduce, triggering human-versus-human; human-versus-wildlife and wildlife conflicts;

Mineral exploitation activities are using a diversity of technologies some of which are archaic, rudimentary or artisan in nature. These technologies are having various social, economic and environmental impacts with little or no safeguards to address the impacts;

The existing mining policy and legislation, although seems sufficient to govern the sector well, is riddled with gaps and implementation challenges and has not been enforced well – even to the level where it has the capacity to do so;

Government is in the process of revising its mining policies, legislation and institutional frameworks with a view of improving governance of the sector, but the manner in which this is being done leaves a lot to be desired. The country is likely to end-up with worse and weaker governance frameworks than we originally had.

For example, there are media reports that the President is inclined to abolishing the landowners’ right to royalties and rents enshrined in the current mining law and ensure that there is land takeover from landowners even before compensation is paid. If such mindset is included in the laws, many landowners may be disenfranchised and this could violate the Constitution, common law and natural justice;

Local governments and their associated political and administrative leaders are usually not well informed about the mining activities taking place in their areas of jurisdiction, because licensing and oversight occurs at the central government level.

Consequently, the local governments are not even aware of the royalties, rents, taxes, etc due to them from the mining companies operating in their districts. They are also not aware of when, what and where to monitor the effects/impacts of the mining industries as required by decentralization, because this role is in practice centralized and not routinely done.

As a result, the local governments and the country at large are left at the mercy of the mining companies and obtaining sporadic media stories/reports of people or environments being affected by mining company operations;

The mining sector is using chemicals that risk polluting the environment. For example, Gold miners are using Cyanide and Mercury Oxide to extract Gold from earth tailings. How the effluent waste is being handled is not well/widely known, yet they are highly poisonous chemicals that pose significant threat to humans, livestock, wildlife, plants and the environment in general;

There are also unconfirmed reports of Cobalt, Copper Oxide, Cement and Limestone leaking into the environment from the mines and factories. Little is known about the safeguards and obligations that these entities must comply with and how the safeguards/ obligations are enforced at the various levels of management i.e. factory and government;

Mining is increasing its contribution to national treasury revenues. For example, in 2009 and 2010, the sector contributed shs97,616,446 (US$34,251.4) and shs126,189,619 (US$44,277.0) production value respectively, excluding license fees. Much of this production value was contributed by Limestone (60%) and Cobalt (27%) with the remaining 13% being contributed by Pozollana, Kaolin, Wolfram, Tin, Vermiculite, Iron, Manganese, Gold and Coltan in decreasing order.  This trend is anticipated to change as Copper is brought back online and production of these minerals increases. Therefore, the anticipated social, economic, environmental and political impacts of these emerging minerals are likely to change.

A lot of focus has been placed on petroleum to the extent of relegating metallic and industrial minerals into the backstage as if the latter are irrelevant to the economy.

There is therefore need to refocus governments’, private sector and citizens’ attention on the metallic and industrial minerals in order to spur investment and development in the sector.

Authored by Mr. Henry Mugisha Bazira, Executive Director, Water Governance Institute (WGI) and founding chairperson of the Civil Society Coalition on Oil and Gas (CSCO) in Uganda and a member of the Energy and Extractives Working Group (ESWG) of the Uganda Contracts Monitoring Coalition (UCMC).

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