Salt firms lose bid to be exempted from Mining Act

Salt processing companies lost a case in which they sought to be exempted from mining regulations.

Krystalline Salt Limited, Kurawa Industries Limited, Malindi Salt Works Limited and Kensalt Works Limited argued they are not bound by the Mining Act as they have leased parts of the properties where they harvest edible salt.

The companies told the court that their agreement with the government is that they should harvest edible salt from the seawater and pay Sh160,000 for every two tonnes of salt as royalties until the expiry of their leases.

The royalties, according to them, should be paid to the Ministry of Lands.

They argued that edible salt is not a mineral. They also argued that salt is not excavated as indicated in the Act, thus, it should not be regulated by the mining law.

The companies said they will now be required to pay twice, in levies and permits, required by mining and lands ministries if they are subjected to the said regulations.

However, High Court judge Millicent Odeny has found that the law does not differentiate between ‘edible salt’ and ‘salt’.

According to the judge, ‘salt’ is defined as a construction and industrial mineral.

Justice Odeny was of the view that the argument by the companies that they are entitled to harvest salt until their leases, which are between 50 years and 99 years, expire cannot stand as that would amount to exploiting a natural resource without government regulations.

“This cannot be left to the whims of individuals to ensure sustainable exploitation of natural resources, salt, in this case, being one of them," she said.

"The State must also regulate, through licensing and payment royalties, to ensure equitable sharing of the accruing benefits.”

The judge also found that the salt companies had not produced evidence that the leases from the government granted them exclusive perspective rights.

Justice Odeny observed that the companies were paying royalties to the Commissioner of Lands under the previous Constitution. However, after the enactment of the Mining Act 2016, the royalties ought to be determined by the Minister for Mining, the judge said.

In their submissions, the salt companies argued that after the Mining Act 2016 was enacted, they continued enjoying their lease agreements for four years only to be shocked when the Ministry of Mining demanded that they seek fresh salt harvesting rights under the Act if they wished to continue with their activities.

The judge was of the view that the leases have not expired but the companies will have to regularise their activities under the mining law.

“The petitioners still have the rights to extract the edible salt from their respective parcels of land and the remainder of their leases will not be affected save for being regulated vide the Mining Act where the Cabinet Secretary has the mandate to prescribe rates of royalties to be paid and be guided by the law," the judge said.

"The petitioners were paying royalties under the old regime to the Commissioner of Lands but now, they will pay within the ambit of the Mining Act regulations.

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