Uganda is in talks with Tanzania for import of natural gas to be used as a reducing agent in the iron and steel industry.
“We are discussing with Tanzania if we can make use of their gas,” Energy minister Irene Muloni told Parliament’s Natural Resources Committee.
“Maybe as we build the pipeline for crude (oil), we could also build a pipeline for gas to come from Tanzania (to) go to the west to help us set up the iron and steel industry,” she said.
The gas, she said, will be used as a reducing agent. Uganda, according to Ms Muloni, has more than 300 million tonnes of iron ore in Kisoro and Kabale districts in the west of the country. However, because the iron and steel sector is not as developed as say, Japan’s, Uganda spends a lot of money importing related products.
According to the August 2015 issue of the Oil in Uganda magazine, the country was spending about $280 million (Sh28 billion) annually to import iron and steel products.
To check the outflow of hard currency, the government in 2011 banned the export of unprocessed minerals. President Yoweri Museveni banned the export of iron ore in 2012.
Mr Museveni said then that the ban would contribute to the development of Uganda’s steel industry since investors would be left with no option but to build steel factories in the country and create jobs.
However, Mr Museveni later lifted the ban. The phosphates factory in Tororo is expected to manufacture steel, a key raw material for making motor vehicle bodies.