Balala now cracks the whip on mining companies

Politics and policy

Mining secretary Najib Balala addresses a press conference in his office in Nairobi on Monday, 05/08/2013. Photo/Phoebe Okall  

By George Omondi

In Summary

• Mining secretary Najib Balala said all licences awarded between January and May this year stand suspended, pending the decision of a review team he has appointed to vet the processes.
• Mr Balala also sent home the Commissioner of Mines, Moses Masibo, accusing him of presiding over the irregular award of the licences.
• The Kenya Chambers of Mines (KCM), a private sector lobby representing the interest of mining firms, has however rejected the minister’s explanations, setting the stage for legal battles.
• Mr David Anderson, Cortec Kenya’s managing director, said his firm was awarded its licence after complying with all the legal requirements. 

Cortec Kenya, the company that won the rights to exploit the multi-billion- dollar rare earth and niobium deposits at the Kenyan coast early this year, topped the list of casualties as the government suspended more than 30 mining licences, citing irregularities in their award. 

Mining secretary Najib Balala said all licences awarded between January and May this year stand suspended, pending the decision of a review team he has appointed to vet the processes.

“I have today revoked all the prospecting, exploration and mining licences issued between January 14 and May 15 this year,” Mr Balala said at a Press briefing in Nairobi.

READ: Balala stops issuance of mining licences

Mr Balala also sent home the Commissioner of Mines, Moses Masibo, accusing him of presiding over the irregular award of the licences.

The decision puts on hold Cortec Kenya’s Sh5.4 trillion mining project at Kwale’s Mrima Hills, setting the stage for court battles with investors. Revocation of the licences came as a rude shock to Cortec Kenya’s management who have been laying grand investment plans for the mines.

Cortec Kenya had received a clean bill of health from the National Environmental Management Authority (Nema) to mine niobium and rare earth metals in Mrima Hills only two weeks ago, making the latest decision a complete surprise.

READ: Nema gives rare earths miner licence terms

Nema later clarified that the licence was conditional as it emerged that some Mining ministry officials were less than enthusiastic about the licensing.

The top managers of Cortec were on Monday caught flat-footed by the licence revocation move that came just days after they announced an ambitious Sh44 billion mining programme.

“It doesn’t sound like a very well informed situation,” Cortec Kenya’s managing director David Anderson told the Business Daily on phone from Tanzania.

“I am going to announce our course of action as soon as I have spoken to our offices in Australia and Cape Town,” he added.

Mr Anderson said his firm was awarded its licence after complying with all the legal requirements. The list of Cortec’s shareholders includes Jacob Juma, the businessman associated with Erad, the firm that is seeking to auction National Cereals and Produce Board assets over a failed maize supply deal.

Mr Juma also has interest in Tiomin fields at the Coast. 

Of the revoked licences, 31 were issued in the last half of the January – just after Parliament was dissolved on January 15 to pave way for the March 4 General Election.