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KAMPALA- Kasese-based Kilembe Mines Limited is to be liquidated soon.
This follows the decision to windup the company's core business of mining and smelting cooper now said to be unviable due to falling coper prices on the world market.
"We are in the process of evaluating two companies which have bidded to carry out a study to decommission the mines. The selected company will advise us on how to proceed with the decommissioning exercise ," Senior Public Relations Officer Privatisation and Utility at Sector Reform Project, Ms Grace Achire, told The Monitor during a recent interview.
In the 1960s and early 1970s, Uganda was one of the largest producers and exporters of copper in Africa. The metal was then the third most important foreign exchange earner for Uganda after coffee and cotton.
At its peak, the copper sector employed 6,000 people with the mines alone employing about 1,200 people.
The situation changed in February 1975 when Falconbridge Nickel Mining Limited of Canada, who owned the copper mines business sold their shares to Uganda government.
Since then, no mining of copper took place partly because the business became unviable due to falling world prices.
However, during the process of copper mining, large stockpiles of cobalt pyrites accumulated around Kilembe Mines. And when prices of cobalt on the world market rose sharply as a result of political turmoil in the Democratic Republic of Congo - the biggest world producer - Barclays Metals Limited carried out studies on how the cobalt could be recovered from the pyrites cheaply.
A new company, Kasese Cobalt Company Limited (KCCL) was incorporated with initial investment of $110 million.
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