Firms race for gold mines in Kenya

Last Updated 14 years ago by Kenya Engineer

Kenya is increasingly attracting investors with the latest key attraction being the gold deposits in some parts of the country. The Government is preparing to grant a special license to East Africa Pure Gold (EAPG) to prospect for gold and base metals in Rachuonyo district, raising the number of interested investors in the area.

The area of about 100 square kilometers is now re-opened to prospecting and mining. This is just a part of other prospects in Kakamega and Vihiga. Surveys by both the Kenya Government and private companies have revealed large gold deposits around Migori and Kakamega, part of a vast gold belt – the Archean Greenstone Belt – dating back to 3.7 million years.

This raises the possibility of large scale mining that could help Kenya diversify its revenue streams, reducing the country’s reliance on horticultural and tea exports, tourism and remittances from abroad.

The Commissioner of mines and geology, Moses Masibo announced that anyone seeking to oppose the granting of a special license to the company had 30 days to file a complaint with the commissioner of mines.

A number of exploration companies are narrowing down to the western Kenya region with more than 10 firms already in the area with Linear Metals, Red Rock Resources, Aviva Mining of Australia and Goldplat – a British firm, at various stages of pursuing mining rights and exploration.

The London-listed gold producer is already smelting and producing gold from its wholly owned Kilimapesa Gold Mine (Kilimapesa) in Trans-Mara, in South Western with sales positively impacting its bottom line. Also eyeing gold discovery in the region is Stockport Exploration, a Canadian company which together with partners own tracks of land along the gold-hosting greenstone belt in western Kenya.

Stockport and its joint venture partners B&M Mining and East Africa Pure Gold (“B&M and EAPG”), privately owned sister companies, control exploration licenses in the Migori area covering over 1,288 kilometer square.

Estimates from the Ministry of Environment and Natural Resources show that Migori’s gold capacity alone currently stands at 34 tonnes, which could earn the country close to $670 million (Sh3.35b) a year. Earnings from the mineral – currently exploited by artisanal miners or small-scale miners – however stood at $230 million (about Sh2b) in 2010, mainly since the small prospectors lack equipment for commercial mining.