Mining chamber warns Magadi licence dispute could hurt investor confidence

The Kenya Chamber of Mines (KCM) has warned that the handling of the dispute surrounding Tata Chemicals Magadi Limited could have wider implications for investor confidence and Kenya’s attractiveness as a destination for long-term mining investment.

In a statement issued on Thursday, Dr Patrick Kanyoro, Chair person of KCM said they supported President William Ruto’s push to ensure that Kenya derives greater value from its mineral resources through local beneficiation, industrialisation, job creation and increased participation of Kenyan businesses.

However, Dr Kanyoro cautioned that efforts to achieve these objectives must be anchored in the Constitution, the rule of law, due process and a predictable regulatory environment.

“The Chamber strongly believes that the pursuit of these objectives must remain firmly anchored in the Constitution, the rule of law, due process and a predictable regulatory environment,” Kanyoro said.

The Chamber noted that the Government has a right and responsibility to enforce Kenyan laws and secure greater benefits for the country from its mineral resources.

At the same time, it said citizens and investors should be assured of the rights, protections and legal remedies guaranteed under Kenyan law and the Constitution.

The Magadi operation has been in existence for more than a century, with Tata Chemicals Magadi and its predecessors forming part of Kenya’s industrial and economic history, according to the Chamber.

KCM expressed concern that continued disruption of operations could affect employees and their families, Magadi Township and neighbouring communities, as well as contractors and suppliers.

The disruption could also have implications for established domestic and international markets and Kenya’s wider mineral-based industrial value chains, it said.

The Chamber stressed that mining requires significant long-term capital and investors therefore need confidence that their investments and mineral rights will be governed through clear, transparent and predictable legal and regulatory processes.

Dr Kanyoro noted that the manner in which the Magadi matter is handled and ultimately resolved is being closely watched by investors and financiers locally and internationally.

The outcome, KCM said, would inevitably become an important reference point in assessing Kenya’s regulatory predictability and attractiveness to long-term investors.

The Chamber argued that Kenya did not have to choose between increasing local beneficiation and protecting existing productive investments.

“Greater beneficiation, regulatory compliance and the preservation of existing productive investment are not mutually exclusive objectives,” it said.

According to Dr Kanyoro, the country could increase the value derived from its mineral resources while preserving and expanding investment, employment, industrial capacity and established markets.

It called for constructive and urgent engagement between the Government and Tata Chemicals Magadi Limited to facilitate the earliest possible resumption of productive operations.

Any outstanding issues, it added, should be resolved through lawful, transparent and time-bound processes.

The Chamber said it remained willing to engage President Ruto, the Government, Tata Chemicals Magadi and other stakeholders in finding a solution that supports Kenya’s beneficiation and industrialisation ambitions while protecting the rule of law, investor confidence, jobs and the country’s long-term economic interests.