Politicians call for probe into Sh164bn gold mining deal

Mining and Petroleum Cabinet Secretary John Munyes. PHOTO | FILE | NATION MEDIA GROUP

What you need to know:

  • Acacia Mining, is expected to start exploring for gold on the Lirhanda Corridor, which straddles Kakamega, Vihiga, Kisumu and Siaya counties, in 2022.
  • Acacia Mining estimates that there are 1.31 million ounces of inferred gold resource worth Sh164 billion on the Lirhanda Corridor.

A lucrative Sh164 billion gold exploration deal in western Kenya has run into political headwinds, with some local leaders demanding full disclosures about the UK-based company awarded the contract by the government.

The company, Acacia Mining, is expected to start exploring for gold on the Lirhanda Corridor, which straddles Kakamega, Vihiga, Kisumu and Siaya counties, in 2022.

Acacia Mining estimates that there are 1.31 million ounces of inferred gold resource worth Sh164 billion on the Lirhanda Corridor.

Acacia in the past said that it was investing more than $12 million to fund the 45,000-metre drilling programme on the corridor.

Mining Cabinet Secretary John Munyes announced the exploration plans when he visited the region two weeks ago.

FIVE-ACRE LAND

Mr Munyes was in the company of Agriculture CS Peter Munya, Transport CS James Macharia and Devolution CS Eugene Wamalwa.

During the tour, Mr Munyes formally received the five-acre land where a gold refinery will be established.

Acacia Mining plc is a UK public company headquartered in London. The firm is listed on the main market of the London Stock Exchange with a secondary listing on the Dar es Salaam Stock Exchange.

  Barrick Gold Corporation is the majority shareholder in the company.

The western Kenya exploration deal has been promoted on local political platforms as part of the development projects earmarked for the region due to the lobbying efforts of Mr Wamalwa and Kakamega Governor Wycliffe Oparanya.

A rival camp associated with ANC party leader Musalia Mudavadi and Bungoma Senator Moses Wetang’ula, who is also the Ford Kenya party leader, has questioned the terms of the deal, saying it is shrouded in secrecy.

“As leaders from Western Kenya, we want to know who the exploration company’s local representatives are, the tendering process, mining methods and environmental impact assessment reports,” Mr Mudavadi and Mr Wetang’ula said in a letter to the Mining CS.

COMPENSATION

 They also raised issues around compensation and the sharing of revenue with locals.

On Thursday,  Sabatia MP Alfred Agoi, a close ally of Mr Mudavadi’s, took the matter to the National Assembly, demanding details of the exploration deal.

 “What are the processes that were used to identify and award the company the rights for gold prospecting?” the legislator asked, adding that Mr Munyes should also reveal royalties or payments received by the government from the award of the gold prospecting rights.

National Assembly Speaker Justin Muturi directed that the Environment and Natural Resources Committee address the questions raised by Mr Agoi.