Hima Cement is to build a second plant when mining in Dura region in Kasese begins in 2010. This follows approval of funds from Lafarge, Hima’s parent company.
Lafarge’s offer of $50m (sh85.2b) will fund half of the project, while the remainder would be sourced internally.
Dura is located in Queen Elizabeth National Park.
Hima is waiting for a permit from the Uganda Wildlife Authority, which approved the project in principle.
Environmentalists have criticised the project, saying mining in the national park would be disastrous to wildlife.
Last year, President Yoweri Museveni broke ground for the new plant and said it was a critical project due to the growing construction sector.
David Njoroge, the general manager, said Hima’s reserves of four million tonnes are less than 10 years of production, but when mining begins in Dura, they would be assured of reserves that can last for 24 years.
Njoroge refuted reports that the World Bank had refused to fund the project. “We decided not to go with the World Bank because the process was long. They did not refuse to give us the money. Lafarge gave us the money,” Njoroge said.
Hima produces 375,000 tonnes annually. The new plant will produce 480,000.
“The viability of our investment is dependent on availability of sufficient limestone reserves,” he added.
The booming construction sector in the region has increased the demand for cement, making it inevitable for Hima and Tororo Cement, the two cement manufacturers, to expand capacity.
Njoroge said they would rehabilitate the Hima-Dura railway to facilitate movement of limestone to the plant.