Inside State's plan to auction Kenya's generational mineral wealth

Mining CS, Hassan Joho, before the Committee on Appointments at the Mini Chambers, County Hall. August 4, 2024. [File, Standard]

The cash‑strapped Kenya Kwanza government yesterday launched the largest auction of Kenya’s mineral wealth and mining rights since independence in 1963.

The move gives global investors just two weeks to secure ownership and production rights across five strategic sites as it scrambles to plug a yawning budget hole. 

In a series of tender notices published in the official MyGov gazette, the Ministry of Mining invited unprecedented bids for prospecting and mining rights over five sites spread across the country, putting everything from rare earths to coltan and manganese up for sale to global investors.  

The minerals on offer are critical to the global green energy transition, including niobium, rare-earth elements, chromite, coltan, manganese, and copper, all of which are vital for electric cars, fighter jets, and smartphones. 

“The government intends to award the mineral rights over the area through a public tender process as guided by the Mining Act Cap 306 and the Mining (Award of Mineral Rights by Tender) Regulations, 2017,” the ministry led by Mining Cabinet Secretary Hassan Joho said in near‑identical qualifying criteria attached to each expression‑of‑interest document.  

“Firms expressing interest will be required to possess vast experience in exploration and mining for specialist minerals in global jurisdictions, verifiable financial resources, and a proven technical team.” 

The tenders cover five counties, each with its own geological promise, giving global and local investors until April 21, 2026, to submit their expressions of interest. 

In Kwale County on the southern coast, the government is offering rights to the Mrima Hill niobium and rare earths project.  

Located about 15km from the Indian Ocean and less than 100km from Mombasa, the forested hill is ranked among the top five undeveloped rare earth deposits in the world.  

The deposit is believed to hold a mix of rare earth elements, niobium, phosphate and manganese, with a 2013 estimate valuing it at $62.4 billion (approximately Sh8 trillion).  

“Mrima Hill is accessible via the Mombasa‑Lunga Lunga Highway, with terrain, including the Coastal Uplands and Foot Plateau,” the tender document states. 

In Tana River County, the government is seeking to award mineral rights for manganese deposits at Lali Hills, situated within the Mid‑Galana geological zone about 300 km southeast of Nairobi. 

“Geological mapping and field investigations have confirmed structurally controlled manganese mineralisation associated with fault systems in the Lali Hill area,” the ministry said.  

Manganese is mainly used to strengthen steel and is also a key component in modern lithium‑ion batteries. 

In Samburu County in northern Kenya, the government is inviting bids for large‑scale exploitation of chromite at Kang’ura.  

Chromite occurs as deposits within ultramafic rock complexes in areas such as Kangua and Wamba and is the primary ore of chromium, a metal heavily utilised in the production of corrosion‑resistant stainless steel.  

CS Joho has described Samburu as “properly blessed and endowed” with chromite deposits and other strategic minerals, positioning the county as central to Kenya’s mining ambitions. 

In Embu County, the government is offering rights for coltan and other minerals at Kiritiri, the headquarters of Mbeere South Sub‑County.  

The bidding area covers roughly 189 square kilometres in a rocky terrain where artisanal miners have worked for years.  

Columbite‑tantalite (coltan) is the mineral used to manufacture electric car batteries, cell phones, laptops and other electronic devices, placing Kenya at the heart of the global race for the rare minerals.  

“The current study was not sufficient to produce figures that would define a resource or a reserve; however, sufficient data exist to support the widespread occurrence of coltan in this area,” the ministry said. 

In Tharaka Nithi County, the state has invited expressions of interest to commercialise copper deposits at Kamacabi.  

The winning bidder will have access to geophysical data for an area that covers 196.28km², including Kamacabi, Gatue, Kiamiramba and Maragwa.

Mineral deposits, particularly copper, have been identified in the drier parts of Tharaka, including Kandondo, Kamarenge, Kamaguna, Kiorimba, and Kithiori, according to Mining Principal Secretary Harry Kimtai. 

The flurry of mining tenders coincides with a broader push by the Ruto administration to monetise state assets and raise non‑debt financing.  

The Ruto government, which is under pressure to deliver on its flagship economic promises ahead of national elections in less than 18 months, is facing a persistent fiscal squeeze and a growing public debt burden after the expiry of a $3.6 billion (Sh494 billion) International Monetary Fund programme in April 2025. 

To plug a budget deficit of roughly Sh932 billion, equivalent to 4.8 per cent of GDP, the government has turned to the sale of state assets.

It has already sold a 65 per cent stake in Kenya Pipeline Company for Sh106.3 billion and is pushing through the sale of a 15 per cent stake in telecoms giant Safaricom to South Africa’s Vodacom for Sh240 billion. 

Critics have accused the Ruto government of selling off the strategic assets and Crown Jewels of the economy at knockdown prices.  

Kiharu MP Ndindi Nyoro, a prominent critic, said earlier the Safaricom deal undervalued the company, arguing that the 15 per cent stake was worth far more than the Sh244.5 billion the government expects to receive. 

“The problem is that we are selling these assets for a song,” Nyoro said. 

Treasury officials have, however, defended the transactions as necessary to fund infrastructure without adding to the debt pile.  

Proceeds from the Safaricom sale are earmarked for a new President William Ruto-backed National Infrastructure Fund to finance priority projects in energy, transport, water and digital infrastructure. 

Economists said the latest mining auction will be a critical test of whether Kenya can finally translate its underground wealth into broad‑based prosperity, or whether it will repeat a troubled history of resource conflict. 

Mrima Hill, a forested site near the Indian Ocean coast that is culturally significant to the Digo community, has been at the centre of disputes for decades.  

In 2013, authorities revoked a licence granted to Cortec Mining Kenya, a subsidiary of UK‑ and Canada‑based Pacific Wildcat Resources, citing environmental concerns and irregularities in the licensing process. Cortec had estimated the deposit’s value at $62.4 billion (Sh8.1 trillion). 

More recently, Joho has faced scrutiny for allegedly granting a prospecting licence for niobium and rare earths in Kwale to a foreign firm without engaging local communities.  

“There has been no evidence of public barazas, disclosure of project scope, or free, prior, and informed consent,” former minister Ali Mwakwere was quoted as saying in a formal objection. 

The government yesterday sought to cast the mining auctions as a “transparent process” that will ensure local communities benefit.  

“The Constitution ensures that minerals are treated as public assets whose use must benefit all Kenyans, while protecting the environment and rewarding local communities,” the ministry said. 

“The government must ensure that benefits from mining are shared between the national government, county governments and local communities.” 

Under the law, 70 per cent of mining proceeds go to the national government, 20 per cent to the county and 10 per cent directly to the local community.  

Companies are also required to channel 1 per cent of annual gross sales toward local development projects. 

Yet enforcement has been patchy. In Taita Taveta County, the government recently moved to compel mining companies that have operated for years without forming community development agreement committees to back pay what they owe. 

The auctions are already drawing international attention. Global powers, including the United States and China, are vying for access to Mrima Hill’s rare earths. An Australian consortium of RareX and Iluka Resources has also announced a joint bid for the site. 

The auction comes as Kenya’s mining sector languishes. The 2025 Economic Survey shows the sector’s contribution to GDP shrank to 0.4 per cent in 2024, a 24.6 per cent contraction that made it the worst‑performing part of the economy.  

The total value of minerals produced fell to Sh25.5 billion from Sh33.8 billion a year earlier, mainly because of lower earnings from titanium ore. 

Since 2016, the sector has generated a cumulative Sh223.6 billion, the survey shows. The single largest contributor was not mining itself but the issuance of licences, which raked in Sh154.2 billion. Royalties from actual production accounted for only a fraction of that total. 

Kenya sits on a rich seam of minerals, including gold, zinc, copper, coal, dimension stone, gemstones, soda ash, fluorspar, diatomite, ruby, carbon dioxide, oil, titanium, mercury and gypsum, according to industry data.  

Official records show that to date it has only managed to exploit titanium, salt, soda ash, gemstones, gold and diatomite on a commercial scale. 

The mining ministry warned that it would not be responsible for any costs incurred by bidders. 

“Each bidder assumes all risks for resource commitment and expenses, direct or indirect, of EOI preparation and participation throughout the EOI process,” the documents said.

“The ministry will not be responsible directly or indirectly for any costs incurred by companies in submitting their EOI.” 

The deadline for expressions of interest is April 21 this year.