Halt in mining licences leaves Coast counties in dilemma

Coastal leaders want iron ore consignments at Miritini and Mariakani weighbridge returned to Kishushe until the fate of the project is known. [PHOTOS: PASCAL MWANDAMBO

By PASCAL MWANDAMBO

The recent move by mining Cabinet Secretary Najib Balala to cancel 41 mining licences in the multi-billion shilling mining sector is likely to put the sector into a tail-spin, albeit for a while.

 There is an avalanche of threats to seek legal redress as the affected firms seek to challenge the revocation of their licences.  Balala has also found himself in the eye of the storm as accusations and counter-accusations threaten to jeopardise an economic sector that employs hundreds of thousands of Kenyans.

Taita-Taveta County executive in charge of tourism, environment and natural resources Eng Elijah Mwandoe said Balala has no powers to cancel the licence of any mining firm.

“The law is very clear that the minister cannot, on his own , cancel any mining licenses. Balala can only suspend the licences pending investigations into their validity after which the Government will take the necessary action,” he said.

Industrial plant

Speaking on the sidelines of a one-day Wildlife Bill sensitisation workshop at a Voi hotel, Eng Mwandoe said that already three multinational companies had been identified which are to set up an iron ore smelting industry in Taita-Taveta.

“We have identified three companies that have the capability to put up an iron ore smelting centre in the county at a cost of between Sh3 and Sh4 billion,” said Eng Mwandoe.

 “Meanwhile, we are continuing with feasibility studies to know how much ore can be extracted and the size of smelting industry that can be put up.”  The Miners lobby, The Kenya Chamber of Mines  has criticised the move, saying it was likely to deter prospective investors.

The Coastal region, which holds some of the largest mineral resources in the country, could be the most affected by the minister’s move.

From iron ore, offshore oil and gemstones, the mining sector in the region has remained silent as locals lament of poverty and deprivation.

Kwale and Taita-Taveta counties so far hold the richest mineral deposits.  But civil rights groups warn that the mismanagement of this mineral wealth might turn out to be a curse.

Balala’s move to cancel the licenses of Cortec Kenya Ltd and Base Titanium in Kwale and Wanjala Mining in Taita-Taveta could also have far reaching ramifications in the region and the country as a whole.

Counter accusations

Cortec Kenya, a subsidiary of a Canadian firm had claimed that Mrima Hills in Kwale have 100 million tonnes of niobium and additional 30 million tonnes of rare earth metals, which could remain viable for over 30 years.

The company has been in the process of putting up a Sh12.8 billion factory for processing rare earths in Kwale.

 Base Titanium has been mining titanium in the county had so far invested  Sh26 billion. The company was projected to produce 330,000 tonnes of ilmenite, 80,000 tonnes of rutile and 40,000 tonnes of zirconium annually.

However, the cancellation of its licence will jeopardise the mining activities, at least in the short term, as accusations leveled against Balala remain unproved.

Cortec Kenya Director Jacob Juma has been quoted as saying that the firm will seek Sh850 billion  in compensation if the licence  is not restored.  Balala also denied he cancelled the licence under pressure from China to award the Mrima Hills mines to the Asian giant, who has now hobnobbed with Kenya as a strategic trading partner.

Kenya’s dalliance with China has seen the Asian country build  mega infrastructure projects such as Thika Superhighway, road and bridges across the country. Others include importation of cars as well as electric and electronic goods.

However, Kwale leaders including the Governor Salim Mvurya, have supported Balala’s move saying it’s timely. They claim the mining firm has not satisfied the demands of the locals on employment and other forms of compensation.

Balala is expected to join other political leaders from the region in repealing of the current mining laws, which he says favour investors and the State at the expense of locals and county governments. The mining cabinet secretary did not also spare Wanjala Mining Company which as been mining iron ore at Kishushe in Taita-Taveta County in the last ten years.

More controveries

Wanjala Mining Company had projected to export over 100 million tonnes of iron ore this year but the move on their licence might jeopardise the project and render hundreds of locals jobless.

Kishushe ore is the magnetite type, rated among the best ores in the world. It comes in handy in the manufacture of steel.

The project has been dogged by controversy largely on issues of compensation to the local community and massive environmental degradation.

Officials of Kishushe Ranch, on which the company is mining iron ore, have accused the investor of working behind the scenes to acquire a title deed to the land despite his licence being only for mining.

They also accuse the investor of extending the boundary of the mining area hitherto allocated to them and annexing sections of land meant for local’s settlement.

Addressing wananchi during a thanksgiving party for elected leaders at Moi Stadium in Voi town, Taita-Taveta Senator Danson Mwazo said the investor should dialogue with the county governmentto have a chunk of their on ore  proceeds ploughed back into county coffers.

“We are asking the investor to come forward and seek fresh negotiations with the county government so that we can reach a better deal that will benefit our county government and the people of Kishushe,” said Mwazo.

Mwazo said that Coastal MPs and senators were working to fast track a new mining Bill that would ensure landowners and county governments get a fixed amount of the proceeds from mineral resources.

Mutual benefit

Mwazo said that among the proposals in the new bill was to allocate five per cent of mining proceeds to the landowner(s) and 20 per cent to county government. A spokesman for the Kishushe community Mwandawiro wa Mbela however pointed out that the iron ore mining company should cease all mining activities following the ministers move to cancel the licence.

“We understand that Wanjala mining is still extracting iron ore in Kishushe despite the move to cancel his licence. We are asking the County Government to take action on this and remove the security officers being used to guard the mine and intimidate the locals,” said Mbela.