Business 12 August 2026 Parliament of Uganda
Government Seeks Shs2.6 Billion Tax Waiver for Kilembe Mines as it Winds Down
The Ministry of Energy and Mineral Development is requesting Parliament to waive Shs2.6 billion in tax arrears owed by Kilembe Mines Limited. This waiver is part of the process to wind up the state-owned company and facilitate a new mining concession. Source: https://www.parliament.go.ug/news/4545/govt-seeks-shs26-billion-waiver-kilembe-mines-winds
The Ugandan government is seeking a significant tax waiver amounting to Shs2.6 billion for Kilembe Mines Limited. This move comes as the state-owned mining entity is in the process of winding up its operations to make way for a new contractor.
The substantial arrears stem from unpaid annual mineral rents, accumulated during Kilembe Mines Limited’s tenure with a mining license. The State Minister for Minerals, Hon. Sidronius Okaasai, presented the request to the Committee on Finance, Planning and Economic Development.
Under the Mining and Minerals Act, companies are required to pay annual mineral rents. The Auditor General had previously highlighted these outstanding payments for the year ending December 2024, advising the ministry to explore options for writing off the debt. “The exploration licenses expired in 2022; however, the arrears of the related annual mineral rent remain an obligation of Kilembe Mines Limited,” stated Agnes Alaba, Commissioner for Geological Survey and Minerals.
Lawmakers raised concerns during the committee meeting. Sheema Municipality legislator, Hon. Dicksons Kateshumbwa, urged the ministry to outline strategies for mitigating environmental hazards, such as recurring floods that previously impacted operations at Kilembe. Similarly, Madi-Okollo District Woman Representative, Hon. Joanne Okia, voiced worries regarding the potential job losses for Ugandan workers affected by the closure of Kilembe Mines.
Some members, like Hon. Patrick Nsamba Oshabe, questioned the timing of the waiver request, especially while the winding-up process is still underway and Kilembe Mines Limited is not directly involved in the new production sharing agreement. This new agreement was signed in 2025 with a consortium including Sarrai Group Ltd, Nile Fibreboard Ltd, and the Uganda National Mining Company Ltd.
Kilembe Mines Limited, majority-owned by the government, took over the license after Tibet Hima Limited failed to redevelop the mines, leading to concession cancellation in 2017. The new concession aims to commence copper production by 2029.
Source: Parliament of Uganda