Gold refinery plan takes shape in the Lirhanda corridor

Miners in search of gold at the Rosterman area in Kakamega.

Photo credit: File | Nation Media Group

What you need to know:

  • The corridor is estimated to hold 1.31 million ounces of inferred gold valued at Sh164 billion.
  • The bidders are also required to demonstrate their capacity to raise funds for the investment by attaching a balance sheet audited by a reputable firm for the last three years.

An invitation to investors to participate in the establishment of a refinery in Kakamega is an indication that the vast deposits of world-class gold in western Kenya could soon translate to better incomes for locals. 

The call was made by the Ministry of Petroleum and Mining through an international expression of interest.

The move comes two months after Kakamega devolved unit and the government through the ministry signed a memorandum of understanding on the proposed refinery.

The invitation to interested bidders, coming shortly after Shanta Gold East Africa Ltd acquired the Lihranda corridor project, could accelerate the return of commercial mining in Kakamega County after the closure of Rosterman pits way back in 1955.

Shanta Gold EA Ltd has been granted the right to mine gold on the increasingly famous Lihranda corridor, which stretches from Kakamega, through Vihiga and parts of Kisumu and Siaya counties.

Capacity to raise funds

The corridor is estimated to hold 1.31 million ounces of inferred gold valued at Sh164 billion.

When Mining and Petroleum Cabinet Secretary John Munyes toured the region in July, he received the title deed for a 10-acre parcel of land – where the processor will be built – from Kakamega Governor Wycliffe Oparanya.

According to the tender documents, the would-be investor will be required to finance the refinery under a build, operate and transfer arrangement.

The government has also provided Sh50 million for fencing off the land in Lidambitsa, Idakho East ward, Ikolomani sub-county.

Among those who have shown interest in the project is Chinese investor Bai Yuehwa, who recently visited the site, together with Mr Oparanya, Bungoma Governor Wycliffe Wangamati and Devolution Cabinet Secretary Eugene Wamalwa.

Interested investors are expected to provide their company profile, organisational structure and details of the key management and technical teams, alongside evidence of technical and financial capability to process and refine gold.

The bidders are also required to demonstrate their capacity to raise funds for the investment by attaching a balance sheet audited by a reputable firm for the last three years.

They must have a capital base of not less than $15 million (Sh1.62 billion).

Mr Munyes said artisanal miners will be some of the biggest beneficiaries as they will be allowed to sell their gold directly to the refinery.

“This area is a well-known gold reservoir. With President Uhuru Kenyatta directing that a refinery be set up here, we will do away with the exploitation of miners by middlemen,” Mr Munyes said.

Governor Oparanya said the refinery will serve small-scale miners from as far as Migori, Siaya and Kisii counties.

According to the deal, gold processed at the refinery will be sold in the international market.

Mr Oparanya and the Cabinet Secretary expressed hope that the project will improve livelihoods in western Kenya and national level, adding that thousands of jobs will be created. 

DMusalia@ke.nationmedia.com