Kilembe Mines Limited

UMT assessment

Kilembe is the reference case for what happens when a concession is awarded without a credible capital and rehabilitation plan. The 2013 award and its 2017 termination cost years of production and left the underground workings and tailings in a worse state than they were found.

The asset itself is not the problem. Copper and cobalt are exactly the metals the world is short of, and a mine with existing shafts, a hydro plant and a rail alignment nearby starts well ahead of a greenfield project. What has failed twice is the selection process, not the geology.

Any new award should be read against three tests: committed capital held in escrow or bonded, a published rehabilitation schedule for the tailings above the Nyamwamba river, and a workforce plan for Kasese rather than an imported one.

There is a counterargument worth stating. Government moves slowly here partly because it is trying to avoid a third failure, and a slow, well-structured tender beats a fast, bad one. The cost of that caution, though, falls on Kasese: dewatering costs rise every year the shafts stay flooded, and the tailings do not wait for a tender.

Overall reading: the country's best-defined mineral asset is still being managed as a procurement problem rather than an operating one. The next award will be judged on bonding and rehabilitation terms, not on the headline investment figure announced at signing.