The Ministry of Energy and Mineral Development is seeking Parliament’s approval to waive Shs2.6 billion in tax arrears owed by Kilembe Mines Limited as government moves to wind up the company and pave the way for a new investor.

State Minister for Minerals Sidronius Okaasai disclosed this while appearing before Parliament’s Committee on Finance, Planning and Economic Development.

Okaasai said the arrears arose from unpaid annual mineral rents accumulated by Kilembe Mines Limited during the period it held a mining licence, as provided for under Section 189 of the Mining and Minerals Act, Cap 159.

The Minister explained that the waiver is necessary to enable government to conclude the affairs of the old company and facilitate a smooth transition to the new investor.

In 2025, government signed a Mineral Production Sharing Agreement with a joint company comprising Sarrai Group Limited, Nile Fibreboard Limited and Uganda National Mining Company Limited.

The agreement provides for the exploration, development, production and processing of minerals at Kilembe Mines, signalling a new phase in efforts to revive mining activities at the historic site in Kasese.

The proposed Shs2.6 billion tax arrears waiver has now been submitted to Parliament for consideration.

By Olvia Nabaggala