The Uganda Investment Authority is promoting the establishment of a pig iron production plant to supply the steel manufacturing market.
Summary: The project entails the establishment of a pig iron production plant to supply the steel manufacturing market. The majority of the steel mills are currently using scrap as the fundamental raw material but iron ore mining and processing would substantially supplement scrap. The project will be located in Kasenyi, which has proven iron ore (hematite) reserves reaching 4.6 million tons. Potential reserves in the wider region are estimated at 50 million tonnes.
Estimated cost of the investment:US$50-million
Sector: Demand for steel is estimated at 80 000 tons per year but currently production is at only 7 000 tonnes. Annual demand is put at 10% per annum. Existing shortages in the region also present interested investors having a guaranteed marketplace inside the East African Community (EAC).
Financing structure: Joint venture partnerships with local investors, or 100% foreign ownership.
The Uganda advantage
• Existence of high quality iron ore resources
• Vast potential for hydro-power
• Developed road network and railway, linking the country with neighbours
• Macro–economic stability
Incentive regime: Uganda’s fiscal incentive package provides for generous capital recovery terms particularly for investors whose projects entail significant investment in plant and machinery, and those with medium to long-term investments.