Economic and Business Report by Leo Odera Omolo In Kisumu City

KENYA is set to join the league of mineral rich African countries following the discovery of large quantity of gold deposits in the Narok and Rongo counties.

This was announced here by the Commissioner for Geology in charge f Nyanza Province John Waita who disclosed that gold deposits discovered by experts recently can support large scale mining for up to 15 years. The discovery areas are in Narok and Migori counties in Western Kenya.

The story of discovery of a large quantity of gold was also confirmed by the Acting Commissioner of Minerals and Geology Moses Masibo.

“ I can confirm that several prospecting company has identified economically viable quantities of gold in Lolgorian area of Narok County, which is capable of supporting a medium scale goldmine.” said Masibo.

He further revealed the companies, which are prospecting for gold in the two regions are in the 0reparation phases for extracting the gold and processing it for commercial business.

Waita said the deposits have been found in Rongo and Nyatike, which are both located in Migori County and in Lolgorian in Trans-Mara district in Narok County in an area bordering Tanzania.

“We are confident of golf availability in these areas and what we need is the support from the communities. We have our facts right about the availability after a company, Waita told the STANDARD in an interview published hereon Monday, and which has been received with a lot of enthusiasm by the local communities living in those areas identified and mentioned as the site of the gold deposits.

In Rongo and Nyatike, the prospects of viable deposits of gold were established after companies involved completed exploration.

“Because of the presence of gold in the said areas after the survey the companies have moved to the next stage. In some areas when they know the quantity is smaller, they carry luggage and move away. That did not happening here now,” the top geologist emphasized.

An official working with one of the mining companies prospecting un the region was recently quoted in a report that confirmed the existence of large quantity of gold in the to regions.

“There is gold occurrence in Rongo and Nyatike, We know if we are successful and able to start production, it will have a massive impact on the economy of the country,” Waita said.

A senior official who works for Abba Mining, and asked not to be named due to the sensitive nature of the data, said studies were on going, and added, of neighboring countries, Uganda and Tanzania have high potential of gold and are mining what about Kenya? We know there are some deposits, but we are currently collecting the data to determine the quantity.

The official said massive investment in gold exploration were an indication o the interest generated by the presence of the mineral..

Kenya has the potential of gold but the problem is that there are no maps to show the geophysical location of the mineral, and that is what we are doing currently,” he said.

Abba Mining is involve in gold processing in Botswana,Namibia and Mozambique. Other firm prospecting for gold in Migori, Homa-Bay and Narok counties are; Kilimapesa, Afri-All and Mid-Migori. Mid-Migori has operated has operated for the last ten years and last year, a London based Mineral Exploration firm, Rock Resources Plc sought a 60 per cent stake in it, and signed an agreement with Kansai Mining that owns Mid-Migori. It paid USD 25,000 {about Kshs 2 million as a non-refundable cash deposits.

Afri-All has been exploring in Siaya, Bondo and Kakamega in a joint venture with an Australian mining company In Rongo, Abba Miners have been conducting exploration while in Nyatike, an area where the Commonwealth Development Corporation {CDC} had been conducting mining activities since the early 1930s and only closed down its gold and Copper Mines at Macalder in 1962 due to fear of possible outbreak of chaos after independence in 1963, Mid-Migori have been have been on the ground at Macalder and Masara.

Waita told newsmen that the regions are part of a vast gold belt known as the Archean Greenstone Belt, which is one of the earth’s oldest crust dating back to 3.7 million years. Its geological features are similar to the Gold Reef in Johannesburg, South Africa, and others in Western Australia and Northern Canada that are known to have gold and other m minerals.

Mr Waita statement was confirmed and endorsed by the Acting Commissioner and Mines and Geology Moses Masibo.

He told the STANDARD in a report published on Monday this week that he can confirm that the companies prospecting in the areas have identified economically viable quantities of gold in Lolgorian capable of supporting sa medium scale commercial goldmine.

A British company that has over the past three years been prospecting for commercially viable gold in Lolgorian area of Trans-Mara district recently discovered goop deposits that could earn Kenya Kshs 400 million annually.

Masibo added the discovered gold is of high quality, because it will not require extensive processing. Lolgorian is part of the extensive Greenstone Belt of the Lake Victoria that stretches into the Mara in Tanzania, and believed to have rich gold deposits..

Te company, which is operating in Kenya as Goldplat Kilimapesa Project,is conducting more tests and is yet to finalize regulatory6 issues with the government with a view to obtaining mining license’

It has been discovered that the deposits are between 40,000 ounces {oz} and 60,000 ounces. An ounce is the unit of measuring gold with once ounce equaling 28.34 grammas {0.02835kg}

This means the deposits can support mining of 40,000 ounces per yea with a lifespan of between 10 to 15 years. Going by the current price of gold in the international market where an ounce is trading at USD 1,246 [Kshs 100,926 under current exchange rates}, the projects could earn the country Ksh 400m million annually or Kshs 32 billion in 15 years .is a boom considering smalltime miners in various parts of Western Kenya according to industry estimates, produce a mere Kshs 15 million annually, although much of it is sold to middlemen at prices well below those in the international market.

In the neighboring Tanzania, where gold mining industry is well established the country produces between 100,000 and 300,000 of gold per annum.

Mt Waita said exploration in Rongo began in May this year, and that the technical teams are moving fast and will start production once they have ascertained the quantity. In May this year, during the long rains, small scale miners in Nyatike harvested gold worth Kshs 15 million, in just two weeks, said Mr Waitaindicating a high presence of the mineral.

“Small-scale miners have been reaping millions of shillings from gold mining in the thre districts, an indication of its presence,” he said.

“The discovery in Kenya is small-scale but economically viable. It will significantly transform the economy of the area, said Godric Simonet, the chairman of the Kenya Chamber of Mines{KCM}.

Simonet who is also the managing director of International Gold Exploration {IGE} and at one point was involved with kilimapesa project, added the project will employ 100 people directly and many more indirectly once it gets going.

Until September last year the KLilimapesa project was in partnership with Goldplat and KGE, but the company assumed full ownership after acquiring IGE’s stake at a cost of Kshs 203 million. Though Goldplat Kilimapesa already has the consent of the local community to commence mining, it cannot embark on the project before obtaining a mining lease from the government and carrying out a land lan survey of the area.

A mining lease, which lasts for about 20 years, ensures the company can recoup its investments. Ironically, due to lack of a modern policy, talks between the company and the government on how to charge royalty seems to be dragging the issuance of the mining lease.

Kenya needs a clear mechanism for charging royalty, which should be higher e for the scarce minerals,” says one of the executive directors of Kenya Institute of Public Policy and Research Analyses {KIPPRA}.

The current mining Act, which dates back to 1940s has been described as a major block in the developing of the mining industry. However, efforts are going to present a new Mining Bill in Parliament, while the process of developing a mining policy is in high gears.

In Migori County, Macalder has been coded as the target area. Others areas are Kamwango in Rongo and Lolgorian in Trans-Mara.,the deputy Geologist Mr Paul Mwadime also said there were high hopes for gold in the area. Mining exploration for gold in the region started during the colonial days but the investigations has not been intense as noiw.”

Ends

Leooderaomolo@yahoo.com