Canadian miner sues Kenya at US court for cancelling licence

Politics and policy

Prospecting equipment at Mrima Hill niobium mining site in Kwale County. FILE 

By KENNEDY SENELWA, The EastAfrican

Posted  Saturday, June 20   2015 at  10:09

In Summary

• Pacific Wildcat Resources, a Canadian mining firm, has instituted an international arbitration against Kenya for cancelling its licence for the exploration and development of minerals in Mrima Hills, Kwale County.
• In 2013, Kenya's Mining minister Najib Balala revoked the licences of Cortec Mining Kenya (CMK) and other mining firms on grounds that they were irregularly issued just before the General Election.
• In July 2013, Cortec announced it found nobium and rare earth deposits worth $100 billion and estimated to be at least 47.8 million tons and 48.7 million tons respectively.

Pacific Wildcat Resources, a Canadian mining firm, has instituted an international arbitration against Kenya for cancelling its licence for the exploration and development of minerals in Mrima Hills, Kwale County.

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UK firms Cortec Pty Ltd and Stirling Capital, its subsidiaries, have jointly filed a request for arbitration against Kenya at the US-based International Centre for Settlement of Investment Disputes (ICSID).

In 2013, Kenya's Mining minister Najib Balala revoked the licences of Cortec Mining Kenya (CMK) and other mining firms on grounds that they were irregularly issued just before the General Election.

READ: Ministry claims Cortec’s Kwale mining licence issued illegally

Pacific Wildcat, which fully owns Cortec Pty and Stirling, the majority shareholders of CMK, claims the Kenyan government unlawfully expropriated its investments and breached the UK-Kenya Bilateral Investment Treaty's obligation to treat them fairly and equitably.

The Toronto Stock Exchanged-listed firm will be represented by London-based law firm Clifford Chance.

ALSO READ: LSK backs cancellation of mine licences

CMK chairman Don O’Sullivan said they were surprised at how quickly the climate for foreign investment in Kenya’s mining sector deteriorated after elections in 2013.

“We have not been compensated for the expropriation of our subsidiaries' investments in Kenya and we see arbitration in the international arena as the only avenue left for us to be given a fair hearing and a chance to recover our considerable losses,” he added.

Following the cancellation of its licences to mine nobium and rare earth at the Coast, CMK subsequently challenged the revocation in the Kenyan courts but, after a legal battle that lasted almost two years, the High Court of Kenya upheld the Mining minister’s actions.

READ: Balala defends revocation of Cortec’s licence

In July 2013, Cortec announced it found nobium and rare earth deposits worth $100 billion and estimated to be at least 47.8 million tons and 48.7 million tons respectively.