House report puts mining firm on the spot

By Paul Wafula

A gold mining company that is facing sanctions has come out fighting, saying none of the samples sent to Tanzania for testing was worth over Sh5, 000.

It also hit back at a Parliamentary committee that claimed the firm smuggled gold and called for revocation of its license.

In a fresh twist to the illegal gold mining saga in South Nyanza, the firm has termed the adoption of the report by the House as “last act of a dying parliament.” In a joint strongly worded response to the report, Mid Migori Mining and its partner Red Rock Resources also raised issue with the Parliamentary committee, saying its move had denied it a chance to respond to the allegations.

“We strongly disagree with elements of the report adopted by the house, an adoption that was smuggled through without debate as the last act of a dying Parliament, when MPs had departed for Christmas,” Andrew Bell, Chairman, Red Rock Resources said in an email response.

Mid Migori has been accused of not exploring, but illegally producing gold. But the firm defended itself arguing that producing gold would require a gold plant, which is as installation that is ‘too large to hide.’

“We do not shrink from any kind of investigation, since we have nothing to hide and complete answers for any question,” Mr Bell said.

Engaged in prospecting

Red Rock Resources Plc is a London listed mining company. It has partnered with Mid Migori Mining since 2009. The two firms have been engaging in prospecting and exploration for gold in Migori, Kuria and Nyatike in South Nyanza together since 2009. Interestingly, the report has not criticised Red Rock.

Mr Bell argues said the mineral samples extracted from the region are sent to Tanzania for laboratory testing purposes, and the records are logged with the Ministry of Environment and Natural Resources.

“The gold content contained in the samples is so negligible that all the samples ever sent for testing would contain less than $50 (Sh4, 250) worth of gold,” Mr Bell said.

Parliament has recommended that one of the licences held by the company based in Migori be revoked for illegally prospecting for gold. This came after legislators approved a report, which put on the spot the firm linked to a former permanent secretary. In seeking the revocation, MPs said the firm had also not met the threshold for being granted an exclusive mining license.

The report, authored by the Lands and Natural resources committee of parliament, was approved without debate.

The Parliamentary report also accuses Mid Migori Mining Company of exploring for gold and other minerals in Kuria West and Nyatike for about three decades, without signs that it will complete the exercise soon.

“Despite Mid Migori Mining Company Limited being in Migori, Kuria West and Nyatike for about 30 years, it is intriguing to note, that there are no results to show. They have not raised any challenges or grievances or complaints but appear to be undertaking mining activities beyond prospecting,” the report tabled recently by Mr Mutava Musyimi, the committee chairman, said in part. 

Title deeds

MPs also want the company in question investigated for fraudulently acquiring of title deeds.

But Mr Bell says the departmental committee failed to guide the house incorrectly and has not offered Mid Migori or Red Rock a chance to comment on the report or correct errors.

“The report dealt with matters on which Red Rock was told not to present evidence as they would not be covered, and that the main facts stated as a basis for the conclusions were uncorroborated assertions by individuals that the committee allowed to stand without any evidentiary test or in many cases even elementary fact checking. This falls short of the normal standards of such reports,” Mr Bell explained.

Red Rock adds that there is need to engage the policy makers on the difference between the mineral exploration and the mining process.

This now becomes the latest in a growing list of conflicts between legislators and mining companies at a time Kenya is becoming a hot spot for exploration activities following the discovery of oil in Turkana last year.

The most recent is when the ministry put in place a legislation requiring mineral companies to cede 35 per cent of their stake to local shareholders, a policy that touched a storm in the industry.

Devolved government

It remains to be seen how parliament will deal with this resistance as the country moves into the election and devolved governments. It is highly unlikely that this current parliament will have time to follow up on the implementation of this latest report given that it has less that ten days before closing shop.