Company tells court to compel Najib Balala to renew mining licence

Mining Cabinet Secretary Najib Balala (centre) is shown how mining equipment works during a recent tour of a mining site. An investor has sued the CS for revoking his firm’s mining licence. [PHOTO: KELVIN KARANI/STANDARD]

NAIROBI: A mining company says it stands to lose more than Sh1 billion in investment if its licence to mine special minerals in Taita Taveta County is not renewed.

Megalith Company, based in Voi, says in court papers, through which it has sued Mining Cabinet Secretary Najib Balala that it had already invested colossal amounts of money for operations when the licence was revoked.

“The total amount made by the applicant apart from the initial prospecting, exploratory work and mining operations conducted, keeping and maintaining staff together with their salaries amounts to $10, 000 000 (about Sh1 billion),” the court heard.

The company trading in precious and semi-precious stones mined in Taita Taveta, added that it had already procured and paid for  services of a South African Company to conduct prospecting and other activities and that all that investment is likely to to waste unless the licence is reinstated.

Through lawyer James Nyiha, it argued that if the decision to revoke the license were not reverted, it would close shop and which would depict the country negatively as an investment destination.

The court heard that the decision by Mr Balala was discouraging to mining firms and would also scare other potential investors.

“The draconian actions by the second respondent will alarm and frighten away potential investors from engaging in mining activities in Kenya, which will inevitably lead to massive losses of potential employment opportunities for the countless Kenyans and loss of foreign exchange to the country,” the court heard.

Mining in Kenya has lagged behind neighbours like Tanzania, where the industry contributed about 4 per cent to GDP in 2013, according to World Bank data.

Megalith argued that the CS had given his word to ensure that he would give back the licence after its directors met with him, but he had not honoured his promise.

Megalith Director Abhimanyu Garwal, in an affidavit argued that the ministry had failed to keep its promise of renewing the firm’s licence after it was asked to present a business plan.

“Representatives did indeed attend the meeting on August 19 with the Mining secretary where lengthy discussions were held. After the meeting the applicant was informed by the minister that they would restore the license upon the applicant submitting a business plan within two weeks,” Garwal told the court.

COURT DOCUMENTS

Court documents indicate that the company was given a permit in 1996, which lasted until 2001.The special license was renewed with a 20-year extension. The case will be heard on September 30.

Meanwhile, Taita Taveta is one of the counties with massive mineral deposits such as titanium, copper, iron ore, manganese and limestone estimated to be worth trillions of shillings. Latest data indicate that 80 per cent of the county’s land mass holds mineral of precious and semi-precious nature.

“Geological surveys indicate that the county has industrial mineral worth trillions of shillings,” says Chairman of Tsavo Minerals Organisation Constantine Mwadime during a recent interview with The Standard. He said surveys have indicated that an area of 10 square kilometres in the county holds up to 25 billion tonnes of iron ore.

“With a tonne going for Sh9,000, we are talking of trillions of shillings enough to sustain the national budget and the county budgets for several years” revealed Mwadime. Towards this end plans are now afoot to put up an iron ore and copper smelting centre on 3,000 acres of land near Maungu along the Nairobi-Mombasa highway.