KAMPALA Uganda-Uganda has signed an agreement with China's
Guangzhou Dongsong Energy Group clearing the way for a long-awaited
$620 million fertilizer project that could prove a boon for
millions of farmers in the East African country and its
neighbors.
Under the deal signed on Tuesday, the Chinese company will
produce fertilizers for sale in Uganda as well as in Kenya,
Tanzania, Rwanda and Burundi, according to Uganda's Energy and
Minerals Ministry. The phosphate deposit Guangzhou Dongsong is
developing in eastern Uganda contains some 230 million metric tons
of the mineral, a key ingredient in fertilizer production.
The project could provide Ugandan farmers with cheaper and
readily available fertilizers rather than costly imports. It is
part of the country's broader efforts to boost yields of crops such
as corn, coffee and cotton, cultivation of which is currently
dogged by exhausted soils. Agriculture accounts for about 80% of
jobs in Uganda whose population is around 35 million.
Guangzhou Dongsong will also finance the construction of an
iron-ore mine and steel mill to exploit the other mineral reserves
on the 26-square kilometer license areas.
The project confirms the growing influence of Chinese investors
in Uganda, and elsewhere on the continent, lured by the country's
unexploited ore bodies such as copper, gold, tin as well as oil and
natural gas. China's Cnooc is jointly developing oil projects in
Uganda with Tullow Oil of the U.K. and Total SA of France.
Uganda's Energy and Minerals Minister Irene Muloni and Guangzhou
Dongsong Chief Executive Mao Jie signed the mining agreement in the
presence of the country's President Yoweri Museveni, a spokeswoman
for the presidency said.
"This is a priority project," said Peter Lokeris, Uganda's
Junior Energy and Minerals Minister. "It will benefit not only
Ugandans but also all farmers in the region."
The project is expected to come on stream within 4 to 5 years
though so far the developers have faced a number of hurdles, from
land disputes to the complexity of exploiting other minerals in the
mine's license areas.
The Chinese company will build a 300,000 tons-a-year fertilizer
plant and a 12 megawatt power station as part of the project. Also
planned is a steel mill with the capacity to produce some 300,000
tons of steel every year from iron ore deposits.
Company executives couldn't be reached for an immediate
comment.
Earlier this year, Guangzhou Dongsong secured a 49-year lease
for the project's land from the local community, ending years of
bickering.
Write to Nicholas Bariyo at nicholas.bariyo@wsj.com,