The Uganda Investment Authority is promoting the establishment of a pig iron production plant to supply the steel manufacturing industry.
Project justification: Potential exists for mining iron ore to supply established steel mills manufacturing products for sectors such as agriculture and construction. Most of the steel mills are currently using scrap as the basic material. Iron ore mining and processing is expected to significantly supplement scrap.
Location of project: Kasenyi – Iron ore (hematite) deposits here have proven reserves of 4.6 million tonnes. Potential reserves in the area are estimated at 50 million tonnes.
Estimated cost of the investment: US$50 million
Market: Uganda’s steel demand is estimated at 80,000 tonnes per year but current production is at only 7,000 tonnes. Demand is estimated to be growing at a rate of 10% per annum. The gap clearly shows the high market potential for any steel products. Existing shortages in the region also guarantees investors interested in this opportunity the East African Community (EAC) market.
Investment options: 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 whose investments are medium to long term.
For more information on investment opportunities in Uganda contact the Uganda Investment Authority.