Manafwa to receive mineral royalties

The district chairman, Mr Charles Walimbwa, told Daily Monitor recently that their demand was granted after they wrote a letter to the Ministry of Finance Permanent Secretary, seeking part of the money the government receives from East Africa Gulf Resources Ltd, a company extracting vermiculite at Namekhala in Manafwa. He said the district council had already started budgeting for the money to finance its activities.

“Farmers have been accessing free fertilizers in form of residues from vermiculite mines, which has eased tension that would otherwise arise between the company and the locals,” said Mr Walimbwa said.

East African Vermiculite Gulf Resources Uganda Limited has been delivering the vermiculite residues free of charge to farmers living within a one-kilometre radius from the mine.

Those outside this radius pay for the transportation of the fertilizer.
“It’s only those who are not near the factory who foot the costs of delivering the residues. To date, we are operating in 14 villages,” said Mr Joseph Kunikina, the company’s human resource manager.

Ms Gertrude Nakhumitsa, a farmer at Namekhala, said the mineral residues has boosted agriculture. This brings to an end a long running wrangle that had erupted between the district authorities and Gulf East Africa Gulf Resources Ltd over royalties.

A Canadian firm, Corporation for Investment, (IBI) through Canmine Resources a local company, started mining vermiculite in 1998 in Namekhala in Manafwa district but shortly after sold the plant under a controversial deal to Rio Tinto on April 1, 2007 at $5m.
The mine was later sold to EA Gulf Resources at $10m without involving government and Manafwa authorities. The deal saw the government lose $1.5m (Shs2.6b) in taxes while the Manafwa local government lost its royalties.

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