Ruto-Jacob Juma fallout linked to Sh210b mineral find in Mrima Hills

The late Jacob Juma (L) and Pacific Wildcat Director David Anderson (R) address a press conference in Nairobi while announcing that the Company will undertake mining of nobium and rare Earth minerals in Kwale County. PHOTO:File/Standard]

A Canadian newspaper has linked the fallout between Deputy President William Ruto and slain businessman Jacob Juma to the Sh210 billion mineral find in Mrima Hills.

The Financial Post reported that Juma had convinced the board of the Canadian company – Pacific Wildcat Resources Corp – that he would help it fight corruption and bureaucratic barriers that were being erected by functionaries in the Kenyan Government after the mineral find.

Trouble for the company started shortly after the Jubilee administration took over. Its licence, which had been granted in March 2013, just weeks to the General Election, was cancelled.

Its representatives met President Uhuru Kenyatta shortly after he was elected, who posted a picture of the meeting on Facebook, accompanied by a note saying he would "encourage growth" of Kenya's mining sector.

But immediately Najib Balala was appointed Mining Cabinet secretary, he started making noise about nationalisation, suggesting Kenya was not getting enough from its mineral resources.

This is the time Juma stepped in to try to address the situation.

"The businessman had just teamed up with Pacific Wildcat, having convinced the board that he could help the company get through some of the inevitable bureaucratic delays in Kenya. This was going to be his first big challenge," the paper reports.

It suggests the late businessman was summoned to a meeting at Balala's house in July, and what happened next is heavily disputed.

By Juma's account, the politician demanded a bribe of Sh80 million or else the Mrima Hill licence would be cancelled. Balala called a Press conference and refuted these claims.

Balala defended the cancellation of the licences because they were awarded during a transitional period, and he wanted to crack down on "briefcase" companies that did not invest in Kenya.

Balala has since been moved to the Tourism ministry.

Pacific Wildcat executives were stunned, according to David Anderson, the firm's director and head of its Kenyan unit.

Later that month, the company hosted a Press conference after it received a key environmental approval for Mrima Hill.

Balala did not show up at the event, but Anderson said that Moses Masibo, Kenya's commissioner of mines at the time, pulled him aside to say the minister wanted to renegotiate the licence.

"Pacific Wildcat's board flat out refused to renegotiate. A few weeks later, its licence was indeed cancelled, along with dozens of others," the paper reports.

The cancellation was officially announced on Twitter, according to the company. The resulting international arbitration case is believed to be the first to revolve around a tweet.

Anderson told the paper that about a year after the cancellation, he met with Balala and Ruto to try to resolve the crisis.

To his shock, Anderson said they demanded that the Mrima Hill licence be transferred to a new company, and that the Government wanted to get up to half the project for free.

That is when the company decided there was no way it would get its licence back on reasonable terms in what led it to launch the arbitration case. The company is seeking at least $2.1 billion in compensation.

Shortly after the cancellation, Pacific Wildcat let go its Kenyan staff, apart from the general manager and a few employees.

"We abandoned everything. We abandoned vehicles, all our records, workshops and tools. Everything," Anderson said.

Niobium, manganese, and rare earth elements were found in 1919 in Kenya but several attempts to exploit these deposits commercially have not been successful.

The lifespan of the Mrima Hill mine is forecast at 20 years, with a mining footprint of 0.22 square kilometres a year. It is expected to produce approximately 750,000 tonnes of niobium and rare earth a year.

In April 2008, Pacific Wildcat Resources Corp (PAW), which owns the majority stake in the Cortec Mining operation at Mrima Hills through a holding structure investment, got a special prospecting licence (256), which grants full and exclusive rights to prospect and explore for all minerals on the hill.

Three years later, the Canadian firm unearthed larger deposits than had earlier been estimated.