Point of Reference from latest news report why action is acutely important and extremely urgent: President Uhuru Kenyatta steps into global mining power struggle Updated Tuesday, July 30th 2013 at 17:29 GMT +3 It, by-and-large, has escaped the attention of the madia that Kenya has a resources asset far greater than the oil and gas find, about which there was so much fuss. Down in Kwale, under a wooded hill, sits a deposit of Rare Earths that is of global significance. Rare Earths are in every mobile phone, in our modern light bulbs, in most modern technologies, and just as the world played a dance of Middle Eastern supremacy over oil and control of oil supplies, so China, more than a decade ago, spotted the power of controlling the Rare Earth market. Rare Earths The Chinese President laid out his country’s strategy to be the controller of Rare Earths as the Middle East had controlled oil. He spoke of it. It was spelt out in his speeches. And China moved. With large Rare Earth deposits of its own, it went on to acquire almost all of the world’s mines, in Australia, globally. It secured more than 95 per cent of all the world’s Rare Earth supplies. No-one can make modern technology without Chinese-controlled Rare Earths, and, predictably enough, the prices have soared in recent years. Now, Kenyan geologists have long known the country had Rare Earths, together with a handy little mineral called Niobium, also these days in big demand as a strengthener of steels. Geological surveys showed the Rare Earths in Kwale back in the 1950s — a sweet enough mineral asset to mean there was a time that global mining major, Anglo American, hacked a mine shaft into that hill and set out on the path of mining there. But that international company gave up, unable to get mining go ahead in a country where mining has never happened NOT because the country isn’t packed with mineral resources, but because no mining company could ever manage the politics. Mining takes huge up-front investment. The surveys have to happen first, the mining, the processing plant, the processing, and finally, years down the line comes the first actual piece of revenue. Investors have to back a mine, for years and in very large sums, to turn it into a revenue stream. It’s not like selling Coca Cola, and it doesn’t work when the menu on offer is ‘put a lot of money in, but you may lose it all and never see a penny of revenue’. Mining investment takes SOME commitments. Kenya has never offered that, leaving itself almost isolated in Africa as a country without earnings from natural resources. But the Kwale thing was bigger still. It certainly sat there for decades undeveloped through a lack of will to convert into a government facilitated investment. A French company tried after Anglo American. Gave up. Then a little ‘junior’ mining company — first a South African/Australian nexus, then merged with a Toront-listed mining company — began the journey. That company got further than the others. They prospected and found the deposit was among the richest in the world, possibly the richest, in the percentage of Rare Earths held in the soil. They also found that the deposit was larger than anyone realised. It now looks as if it may be the second largest in the world, after the world’s largest Rare Earth mine, in China, called Baotou. But by now, there were more challenges than ordinary, routine, forever, political blockage of mining. No one ever mentioned in China’s strategy for Rare Earths that it would be a supply dominated by China AND Kenya. The ‘ Kenya’ part wasn’t in the global plan. Not that anyone has really focussed on that jigsaw puzzle as we gained lots of lovely grants and friendship from China, a free hospital, a beautiful Thika superhighway. I asked a Chinese First Secretary last week why China had put so much into Kenya recently, and he told me, repeatedly, that it was a ‘beautiful’ country with interesting tourism and great weather. So I guess China will be putting a lot into Croatia too, with its stunning coastline. Of course, the truth is, China wanted that mine, and maybe it’s suicide of me to say it, but I think they had got it. Only then our new government was elected, and within three weeks our new President intervened, personally. China did not get the licence. The President met the Canadian-listed international miners, issued their licence, and they have now received their Environment Impact Assessment approvals. The fund raising is underway. Changing future And no-one, but no-one, seems to grasp how brave that was. There will be so much pressure over that mine. I’ve seen detailed figures estimating the resource at a worth of US dollars 95 billion — that’s 8 trillion shillings. It’s the biggest thing that Kenya has ever owned that the world wants. But that resource is a Kenyan birth right. So I don’t care what tribe he’s from: our President just stood up to one of the most powerful forces in the world to harness it for Kenya, setting up an income stream in royalties, 80 per cent of which will go to Government, and our health service, and teachers’ pay, and so much more. And I’m not sure anyone even noticed. But they should. Because that’s future changing. And very brave indeed. COMMENTS: Rare-Earth DIGGER01 August 2013 3:37 PM Looks pretty close. The revenue may look tiny in light of the bigger cake, however, that is a direct revenue. there are indirect revenues such as employment and infrastructure development, investments, etc. twister31 July 2013 11:29 PM It start low as the company recoup its huge invested, which is usually borrowed attracting huge interests, after some time the Gok will poket as high as 80%. George k31 July 2013 6:35 AM Why such a low percentage , someone should explain this Paulo30 July 2013 3:31 PM This article is full of praises but lacking in real focus. Praising China for giving us grants that we will end up paying back and being dependant on their input even in cases where we can do better by developing our local capacity is not the way to go. Also, the issue of mining is more complicated than just working out figures in billions and trillions of expected income/production. EIA have been political tools in cases where in the long run, the cost paid by the local population turns out to be far much greater. Ekhisa30 July 2013 12:05 PM I still think 80percent of 3 percent of 95b only comes to 2.8B USD leaving the mining company with staggering profits from these at 92B USD...So what is so transformational about that figure...I think the new President did well to stick it for Kenya but the royalties just doesnt make sense...I mean Kenya will only make 250B KES from mining worth of 8 trillion shillings...Not right Lands officer linked to Sh954m fraud Ministry of Lands headquarters in Nairobi. Former State officials have been accused of using their positions in government to grab 795 acres of land belonging to Ms Anna Nyogio Kimitei. By VINCENT AGOYA [email protected] Posted Wednesday, July 31 2013 at 21:44 In Summary The former State officials have been accused of using their positions in government to grab 795 acres of land belonging to Ms Anna Nyogio Kimitei. A lands registrar has been summoned to court in a case where a widow claims she was swindled out of a Sh954 million ranch using false documents. Ms Agnes Wangu Gerald Kuria has failed to honour “verbal” summons to honour the court date. Wednesday, magistrate Peter Ndwiga issued summons after police complained she had ignored orders to present herself to investigators. Ms Kuria has been enjoined in the case with former Kenya Pipeline Company boss Ezekiel Komen, former District Commissioner Benjamin Rotich, land registrar Tom Mainja and two others. Ms Kuria has been accused of giving instructions on behalf of the chief land registrar to open green cards in the names of Ezekiel Komen, Eric Kibiwott Tarus, and Kipkorir Kuti for the transfer of land in Eldoret belonging to someone else. She did this on December 22, 2005 while working as a lands registrar at Ardhi House, Nairobi, it is claimed. Using positions The former State officials have been accused of using their positions in government to grab 795 acres of land belonging to Ms Anna Nyogio Kimitei. Yesterday, the prosecution said it would amend the charges to include Ms Kuria and charge the suspects afresh. The prosecution alleges the widow lost her land to powerful politicians during the Kanu regime. It is alleged the politicians subdivided the land and sold it to more than 200 families who have put up commercial and residential buildings. The widow claims her family bought the land from a white settler, Mr James Gear, on March 10, 1969 but in 2006 was told that “the government had taken it over and allocated it to poor families.” The court yesterday extended the suspects’ bond of Sh500,000 and ordered them to appear Thursday.
Posted on: Sat, 03 Aug 2013 02:29:33 +0000
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