The Ministry of Energy and Mineral Development is seeking a Shs2.6bn tax arrears waiver for Kilembe Mines Limited as the government-owned company winds up to pave way for a new mining company.
The amount accrued from the unpaid annual mineral rents by Kilembe Mines Limited when they held the mining licence, the State Minister for Minerals, Hon. Sidronius Okaasai, told the Committee on Finance, Planning and Economic Development on Wednesday, 12 August 2026.
Section 189 of the Mining and Minerals Act, Cap. 159 requires a mining company to pay annual mineral rents to government, which shall be payable before the grant of a mineral right, and thereafter annually on the anniversary of the grant until the termination of the mineral right concerned.
The non-payment of annual mineral rent fees was flagged by the Auditor General for the year ended December 2024, who advised the accounting officer to explore the possibility of writing off Kilembe Mines’ receivable.
“The exploration licenses expired in 2022; however, the arrears of the related annual mineral rent remain an obligation of Kilembe Mines Limited. We request the committee to allow us to write off this arrear as we process the transfer of licence to the new contractor,” Agnes Alaba, Commissioner for Geological Survey and Minerals at the ministry said. 

Sheema Municipality legislator, Hon. Dicksons Kateshumbwa urged the ministry to present their plans to mitigate environmental hazards, such as floods that hampered the operations of Tibet-Hima and Kilembe Mines Limited so that the new mining company does not fall prey.
Madi-Okollo District Woman Representative, Hon. Joanne Okia expressed worries about the future of Ugandans in employment who would be affected by the winding up of Kilembe Mines Limited.  
On the other hand, Hon. Patrick Nsamba Oshabe (NUP, Kassanda County North) was hesitant to grant the waiver request while the process of winding up Kilembe Mines Limited is still ongoing.
“Why are you rushing to seek a waiver when the winding-up process is still ongoing, after all you said Kilembe Mines Limited is not party to the new mineral production sharing agreement?” he said. 
Kilembe Mining Limited, which is 99 percent owned by government took over the mining licence from Tibet Hima Limited, which failed to redevelop Kilembe mines, leading to the cancellation of the concession in 2017. Kilembe Mining Limited has since also failed to meet its key obligations as far as copper mining is concerned.
It should be noted that in 2025, government signed a new mineral production sharing agreement with a joint company comprising Sarrai Group Ltd, Nile Fibreboard Ltd and Uganda National Mining Company Ltd, for the exploration, development, production and processing of minerals at Kilembe Mines. 
The new mining company is now expected to produce copper by 2029.