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Africa House notes investment potential in Uganda, Guinea projects

Uganda flag

Uganda flag

13th April 2022

By: Marleny Arnoldi

Deputy Editor Online


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Research and consulting company Africa House will from May 15 to 20 host a delegation of investors and business leaders in Uganda to better understand the opportunities for investment and the rationale for setting up a local presence in the country.

The country is poised for immense economic growth once more phases of the East African Crude Oil Pipeline (EACOP) are developed.

The pipeline will comprise upstream operations, with the Tilenga and Kingfisher oil extraction sites being developed jointly by fuels company Total Energies and China National Offshore Oil Corporation, through a $10-billion development agreement, as well as midstream – transport, refinery and gas processing – operations and downstream operations, including distribution, marketing and sales.

The project developers and their appointed engineering, procurement and construction (EPC) contractors give preference to local goods and services, with many contracts being reserved for local companies.

The EACOP will comprise 1 443 km of thermal insulated export pipeline and 96 km of upstream feeder line. It is valued at more than $3.5-billion.

The pipeline will connect a new oil export terminal, to be built north of the Port of Tanga, in Tanzania, to the Lake Albert Oil Development, in Hoima, Uganda. The bulk of the project is based in Tanzania, with 296 km of pipeline in Uganda.

Crude oil vessels will dock at Chongoleani in Tanga Bay, through a dedicated facility on a 2-km-long jetty that goes into the open sea. The crude oil load-out platform will be able to deliver one-million barrels of oil in a 24-hour period and store two-million barrels of oil.

Tilenga and Kingfisher are expected to produce about 216 000 bll/d of oil, through what will be the longest heated oil pipeline in the world.

Africa House directors Roelof van Tonder and Duncan Bonnett tell Engineering News that Uganda only discovered its oil in 2006, and had to devise legislation, development plans, a regulator and a State oil company from scratch, with much of the supporting infrastructure and services relating to oil extraction, movement and refinery still needing to be built.  

This includes roads, security services, food and beverage companies, hotel accommodation and catering, transportation, office supplies, land surveying, lifting equipment, construction materials, civil works companies, communication services, waste management, electricity infrastructure, legal services, petroleum services such as inspecting, corrosion control and testing services, supplies for a pipeline and refinery and investments in education and agriculture.

Some of the local content opportunities include thermal insulation of the line pipes, integration of electrical and instrumentation equipment into technical buildings and installation of solar panels.

Bonnett says the EPC contractor issues requests for proposals for various goods and services all the time and, therefore, investors and companies should not delay making use of these opportunities.

He affirms that the Ugandan government is keen to help South African companies set up shop in the country, whether for the Lake Albert project or generally, and believes its economy is ripe for investment and industrialisation.

Van Tonder adds that there are many ways in which money is being pumped into the economies of Tanzania and Uganda, and business stands to benefit.


Discussing other prominent investment opportunities in Africa, Bonnett and Van Tonder mention the Nimba and Simandou iron-ore projects, in Guinea.

Nimba is a high-grade direct shipping ore deposit located in south-east Guinea, owned by Canadian company High Power Exploration.

The company, which raised $200-million in financing to develop the project, expects initial production of 15-million tonnes a year of iron-ore, and plans on ramping up to production of 30-million tonnes a year.

What makes the project particularly alluring in terms of business opportunities is that additional infrastructure will be built in Liberia, by a subsidiary of Canadian company Ivanhoe Mines, to facilitate the transportation of ore to the Buchanan port from the mine site. T

The investment will include the expansion of the capacity of the existing rail infrastructure between Tokadeh, in Liberia, and the Buchanan port, which spans 243 km.

Meanwhile, the Simandou complex is the world’s largest undeveloped iron-ore complex in the world, spanning more than 110 km and comprising a northern half and a southern half.

While global miner Rio Tinto owns 45% of the northern half, alongside Chinalco with a 39.9% and the government of Guinea holding 15%, the Winning Consortium Simandou holds the rights to develop the southern half.

The Simandou complex is estimated to contain 8.6-billion tonnes of ore, with each half of the deposit estimated to contain about two-billion tonnes of recoverable high-quality iron-ore grading between 66% and 68%.

The first phase of the project will see the development of a 670 km railway system from Simandou to a new purpose-built deep-water port at Matakong, in Guinea.

The railway is anticipated to cost $8-billion to build, while the port and mine will account for a further $3-billion of investment.

An expected second phase will see an additional $5-billion being spent on expanding the railway and about $1.5-billion being spent on expanding production and port capacity.

While the Simandou deposit spent years in limbo because of disputes over ownership rights and the large investment required to extract and transport the ore, Bonnett and Van Tonder are confident that these issues will be speedily resolved to make way for major development in Guinea.

They believe there is a significant opportunity to cater for displaced Australian iron-ore to the Chinese market. Australia exports about 800-million tonnes of iron-ore to China every year, however, China has actively been trying to displace that, owing to various trade disputes between the countries.

The iron-ore projects in Guinea, coupled with steel producer ArcelorMittal’s iron-ore mining operation in Liberia, have the potential to supply China with 200-million tonnes a year of iron-ore.

“With almost a guaranteed offtake and promising economic benefits for the operating countries, we can start to develop new rail and port routes for iron-ore with more confidence than in the past,” Bonnett and Van Tonder conclude.

Edited by Chanel de Bruyn
Creamer Media Senior Deputy Editor Online



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