South Sudan awards gold, uranium mining contracts

August 4, 2007 (JUBA) — South Sudan has awarded two companies exploration licenses for gold and uranium in areas thought to be rich in minerals, an official from the semi-autonomous region said.

British/South African New Kush Exploration and Mining Company and the UK-listed Brinkley Mining Plc paid $5,000 for one-year exploration licenses in the area bordering Kenya.

The companies have informal verbal agreements with the newly-formed southern Sudan government, which was created after a January 2005 peace deal ended more than two decades of north-south civil war.

This was because legislation governing formal written agreements has not been passed yet, said the mining ministry’s director general for minerals and geological surveys, David Loro Gubek.

“The mining act is not yet out,” said Gubek, “Things have been stuck (and) private investors need legal protection.”

North Sudanese legislation, which would usually be used in lieu of new southern laws, is also under review said Gubek.

Almost every southern Sudanese ministry has produced draft laws, causing jams in the law making process, he added.

The informal agreements with the two companies had been mandated by the cabinet, and Gubek said the government would likely award concessions to those who had done the exploration.

“(Some) feared that after exploration we might give the area to someone else,” said Gubek. “But we assured them because you are the ones doing the exploration there is no way we could avoid you.”

British and Belgium geological surveys conducted in south Sudan’s large pre-Cambrian area prior to the war produced promising results.

The pre-Cambrian area is a geological formation, thought to have large mineral deposits, Gubek said. It runs on from neighbouring Democratic Republic of Congo.

Two other companies have also been offered similar gold exploration deals for other counties but have not yet finished formalizing the agreements, said Gubek, who expects that each company will invest between $20-$30 million.

He declined to name them.

The new southern government lacks the cash and expertise to do its own preliminary exploration said Gubek.

The areas currently attracting interest became famous for being gold rich after years of ‘local’ low-skill collection. Some of the precious metal was sold to fund the former southern rebels.

(Reuters)