Lake Magadi: Salty saga that has outlived a century of mining

When a journalist-turnedland speculator used his connections to secure lucrative deals for his masters, he had no idea that he was laying the foundation for a controversy whose effects will be felt in India and Kenya more than a century later.

Ernest Gedge had plied his trade in Uganda and South Africa, filing stories for The Times of London as a correspondent before he visited Mumias and started ‘hallucinating’ of acquiring millions of acres of land to cultivate opium.

And his dream is now at the heart of the convoluted controversy currently threatening to send Magadi Soda Company into liquidation is Sh7.5 billion being demanded by Kajiado County government as payment for land rates.

Mad rush

This demand can trace itself to the year Gedge visited Kenya and toured several parts of the country in 1902 and later applied to be allocated 500 square miles to grow opium on behalf of London-based East African Syndicate.

His application awakened a mad rush for land in the Rift Valley, which culminated in a series of treaties executed by illiterate Masai Laibons, who signed away their ancestral land. These treaties would later be contested.

The disdain with which the rulers in East African Colony had for the indigenous people is summed up by the mindset of then Commissioner Charles Eliot, who, on September 7, 1903 said: “I cannot admit that wandering tribes have a right to keep other superior races out of large tracts of land merely because they have acquired a habit of straggling over more than they can utilise.”

Eliot and the class of people he served believed that “Naivasha Maasai should not stray all over the country with inferior cattle and sheep, which is of little use to the owners. It is desirable to break up the Maasai”.

Ironically, Eliot would resign as a commissioner in protest over the allocation of land to Gedges and company. But by then, he had duped the Maasai and their leaders into signing a pact in 1904 whose content and validity is subject of scholarly debate more than 100 years later and continue to stir negative emotions in Maasai land.

The agreement they executed on August 9, 1904 reads in part: “We, the Undersigned, being the Laibons and Chiefs (representatives) of the Maasai in East Africa Protectorate, have, of our own free will, decided that it is for our best interests to remove our people, flocks, and herds into definite reservations away from the railway line, and away from any land that may be thrown open to European settlement”.

It was executed by Donald Stewart, the commissioner who succeeded Eliot, and paved way for the takeover of more than 224,000 acres currently owned by Magadi Soda Company.

The treaty was to remain in force for as long as the Maasai exist. The British would once again call the elders in 1911 to sign yet another agreement which would further disinherit the Maasai of their land in Laikipia.

After securing the land, the speculators fronted by Gedges organised for the surveying of land around Lake Magadi. This was done by Major F Burnham in 1904 and by J S Coates, a geologist from the Colonial Office, in 1908.

A report published in Colony and Protectorate of Kenya of the Magadi Area Degree Sheet 51 authored by S W Quarter and B H Baker details the status of Magadi in 1953: “Historical records indicate that the company was established by T Deacon who later sold his rights to the East African Syndicate although no mining took place until Marcus Samuel and Company of City of London sponsored the flotation of shares in 1911 with a capital of £1,312,000.  

Things changed immediately, following the construction of a91-mile railway line connecting Magadi to the Kenya-Uganda Railway followed by the building of a factory. Warehouses and a deep water pier were constructed in Kilindini, Mombasa.

Although most of the work was completed in 1914, the company went into liquidation in 1923. It was soon revived and some new shareholders brought on board.

From the onset, Magadi Soda Company held two leases of land -- one covered the lake and some portions of land nearby and the second covered part of Lake Natron on the Kenyan side.

According to an agreement signed on November 1, 1928, the two leases were to last up to 2023, but this changed on May 31, 1951 when new leases were drawn.

Of the two parcels, LO 1026 is the biggest, and covers an area of 211,110 acres and incorporates Lake Magadi. The remaining land is consolidated in LO 3867, and consists of 11,364 acres.

The leases grant the company the right to work, process and dispose of the deposits of sodium carbonate and other salts mixed with it, as well as sodium chloride occurring in the leased areas.

To the colonial government, Magadi was the goose laying the golden eggs. It provided more mineral wealth for Kenya than any other part of the colony.

According to government statistics, between 1916 and 1953, nearly two million tonnes of soda ash was produced, and between 1933 and 1953, nearly a quarter of a million tonnes of common salt as well as other products were obtained.

What makes Magadi Soda mines more attractive, as a geologists’ report showed, is that the lake receives salts at a rate greater than that at which they are being removed.

But this magical lake and its environs whose rare attributes are only known to a few for it has been in the hands of foreign companies, is now in the eye of the storm.

The Kajiado County Government is currently enforcing a law which requires all lease holders to pay Sh14,000 per acre and is demanding a total of Sh17 billion as annual rate and arrears dating back to 2013. “Magadi and Tata Chemicals Magadi Limited sit on 224,991 acres. They should pay Sh14,000 per acre. Our government has a right to be paid taxes. Pay up our legal taxes and we will trade. Fail to pay up our taxes and ship out,” said Kajiado Governor Joseph Ole Lenku.

But the company has obtained temporary orders barring the Kajiado Government from carrying out its operations and has protested that the taxes are too high and are likely to drive the company out of business.

Reduced rates

During a meeting between Ole Lenku and Harish Nair, the executive director of Tata Chemicals Magadi Limited, the investor wanted the rates to be slashed to Sh150 per acre as the company was experiencing some difficulties.

But Ole Lenku maintains that the levy will not be reduced as doing so will be against the Finance Act.

According to the governor, it is unheard of for a tax payer to dictate what they ought to be charged.

Yet for the company, it would not be the first time land rates are reduced in its favour. Shortly after Magadi Soda Company was incorporated and given mining rights, it was supposed to pay a nominal fee of 15 Rupees per acre to what was then called Maasai Funds. This was reduced to 10 cents per acre on March 3, 1915.

Tata Chemicals has been arguing that it should be exempted from adhering to Finance Act because they have already spent Sh276 million or 3.5 of their revenue on Corporate Social Responsibility during the 2017/2018 financial year.

The company also says it has accumulated loses of Sh7.5 billion over the last few years. Ole Lenku has rejected this argument. “Tata Chemicals has revealed its total revenue is approximately Sh7.8 billion but wants to pay Sh33 million as rates because it has already spent Sh276 million in community projects. Really? I totally reject his dishonor and exploitation,” he said.

On February 5, 2015 a meeting was held between then Kajiado Governor David Nkedianye and Tata Chemicals at Magadi Sports Club to discuss how the company would pay land rates which had not been cleared from 2013.

It was agreed that the company would pay the rates at Sh120 per acre for the 224,991 acres.

The county government also demanded royalties of Sh100 for every tonne of soda ash mined, but the company agreed to pay Sh.17.88 per tonne pending further negotiations with the central government which had fixed the charges at Sh500 per tonne.