A US $200million iron ore smelting plant has been commissioned in Uganda. The launch follows the country’s plans copy Kenya in banning the sale or trade in scrap metal to tame wanton vandalism of infrastructure such as high voltage power pylons, infrastructure supporting CCTV cameras, and road furniture.
The iron pant is located in Iganga, eastern Uganda, with a capacity to process 1.2 million tonnes of metal annually. It is a project of Tembo Steels Uganda Ltd. Uganda hopes to increase its capacity in iron ore smelting when Pramukh Steel Ltd, Madhvani Steel and Kabale Steel commission their plants, according to their publicised plans. This would allow Uganda to supply smelted iron ore and products to its domestic market as well as Kenya, Rwanda, Burundi, South Sudan, and the DRC.
Scarcity of cast iron scrap
“This is East Africa’s largest integrated steel plant that has forward to backward integration of steel,” Sanjay Awasthi, Chairman Tembo Steel.
The region is facing scarcity of cast iron scrap. Tanzania and Rwanda used to be sources of cast iron, but it is no longer available in those countries. However, Abraham Muwanguzi, senior planner for technology and industry at the National Planning Authority-Uganda (NPA) said the current EAC Common External Tariff needs to be reviewed as it favours importers of wire rods.
The wire rods are 70% semi-finished goods, but are zero-rated, while coal, the raw material used in the iron ore smelting, attracts withholding and value added tax. NPA is pushing for an improved transport network, low-cost loans, reduced power tariffs, and favourable tax incentives for the industry to be competitive.