Kenya wins Sh200bn Cortec mining licence dispute again

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Economy

Kenya wins Sh200bn Cortec mining licence dispute again


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Summary

  • Kenya has for the second time won a Sh200 billion case against Cortec Mining Kenya Limited and Stirling Capital Limited over revocation of their licence in 2013.
  • The two wanted the International Centre for Settlement of Investment Disputes (ICSID) to overturn a 2018 tribunal decision, which found the license was a protected investment.

Kenya has for the second time won a Sh200 billion case against Cortec Mining Kenya Limited and Stirling Capital Limited over revocation of their licence in 2013.

The two wanted the International Centre for Settlement of Investment Disputes (ICSID) to overturn a 2018 tribunal decision, which found the license was a protected investment.

The firms had been granted licence to mine niobium and rare earth minerals at Mrima Hills in Kwale County but it was later cancelled by the government, forcing Cortec to challenge the revocation.

In 2018, the investor-state arbitral tribunal dismissed the case and ordered the companies to pay costs of around $3.5 million to the government, compared with the $6.5 million it was seeking.

Initial drilling at the Mrima Hill project had suggested more than 100 million tonnes of niobium and 30 million tonnes of rare earth minerals, the ruling said.

The ICSID upheld the decision saying the companies failed to prove that the ruling will have negative consequences on the mining sector.

“For the foregoing reasons the committee unanimously decided that the application for annulment of the Award of 22 October 2018 rendered in Cortec Mining Kenya Limited, Cortec (Pty) Limited and Stirling Capital Limited VS Republic OF Kenya is dismissed,” said ICSID in a ruling delivered on March 19.

The two firms had appealed against the award saying was inconsistent with the terms of a 2013 agreement between UK and Kenya for the promotion and protection of investments, and that it was rendered in disregard of key evidence they presented before the tribunal.

Kenya on its part argued that there was nothing to overturn and the case was an attempt to appeal against the findings of the tribunal, issued in 2018.

Mineral Rights Board—which advices the government on granting mineral rights—reckons Kenya now has possession of the world fifth largest rare earth mines.

Search for new firms

Mr Stephen Kuria, the chair of the board, said that the State will consider seeking other firms to mine the minerals.

“This are decisions that the State is not going to arrive at soon. We need to do a valuation and quantify the value of minerals we have on ground,” he said yesterday.

Niobium is a component in high-strength steels and rare earths are a group of 17 elements used in consumer electronics and magnets for electric vehicle motors.

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