The water is under the bridge finally. China’s Guangzhou Dongsong Energy Group Company Ltd was preferred ahead of one of Uganda’s richest families, the Madhvanis, for a multi-million dollar mining project. But Hima Cement will also walk to the bank smiling after the cement makers signed a five-year Memorandum of Understanding with the contractor, to supply cement for the Chinese firm which is set to develop the huge phosphates deposits in Eastern Uganda.
“The purpose of this MOU is to establish the relationship between Hima and GZDS. This cooperation of both parties shall cover the project of construction of the phosphate plant and steel mill plant, and any other projects within the Sukulu Industrial Park,” said Daniel Pettersson, the Country CEO of Hima Cement.
The parties will execute a definitive Sales Agreement where Hima Cement will supply the required cement for the project; to the tune of over 40,000 tonnes of cement for the first two years.
The Sukulu Phosphate Project located in Tororo district in Eastern Uganda will manufacture key products such as phosphate fertilizers, steel products, rare earth minerals and generate electricity with the capacity of 12 megawatts.
Commenting on this partnership, the General Manager of Guangzhou Dongsong Energy Group Mr. Zheng Xu said that the MOU opens up opportunities for a mutually beneficial engagement with Hima Cement; creating long term benefits for both parties.
The Chinese firm is expected to start production on the $620 million Sukulu Phosphate Project in December 2016 and will employ more than 1,200 Ugandans but also earn Uganda Shs 1.6 trillion in taxes annually.
According to government, when completed, the project would include a phosphate fertilizer plant with a production capacity of at least 300,000 tonnes per annum.
There will be a steel mill with a capacity of not less than 300,000 tonnes per year. A power plant of 12 megawatts will also be set up and a sulphuric acid plant, with a capacity of 400,000 tonnes per year, will also be established.
“We are proud to be making a significant contribution to an investment of this magnitude that will create many opportunities for the local population,” said Pettersson.