Balala explains why Migori gold miner’s permit was revoked

Mining secretary Najib Balala has defended the decision to cancel a gold exploration licence belonging to Mid Migori Mining Company.

Mr Balala said on Wednesday the firm had held the exploration licence for 28 years, contrary to the maximum nine years allowed before converting into a mining lease.

He said the ministry contacted the firm to raise the issue , which prompted a meeting on April 2 with mining technocrats.

“When we did our evaluation we found that we could not convert their licence to mining one,” said Mr Balala.

The minister added that the parent company, Red Rock Resources PLC, held an initial public offering in Britain and raised Sh75.4 million (£500,000). “You cannot build a mine with that kind of money, we need to be honest when we are working together,” he said.

The Cabinet secretary said his ministry was not informed that the company had gone to court to challenge its decision and only learned of the case from the media.

On Tuesday, High Court judge George Odunga barred Mr Balala from gazetting the cancellation, which would have seen the firm and its UK affiliate lose the exploration licence.

READ: Migori gold miner wins first round in case against Balala

The minister, however, said he would respect the court ruling that temporarily stopped his decision until the case is heard and determined.

Mr Balala was speaking at the 25th Governing Council meeting of Southern and East African Mineral Centre in Nairobi.

According to Mid Migori the two companies had been issued with a special licence to prospect for gold in Migori. They claimed they had invested close to Sh1.5 billion.

Mid Migori and Red Rock Resources were issued with two special licences, one on April 26, 1988, and another on October 18, 1995. They were given the green light to prospect for gold in Migori in 2009.

However, the Mining minister notified them that he was withdrawing the licences following advice by the Ministerial Licensing and Advisory Committee.

Mr Balala insisted that the company had jumped the gun on the issue given that the revocation was not yet effected.

He maintained that he would continue cancelling permits for non-compliant licensees in the same manner that had seen him revoke licences for 65 companies.

“In 2015, we are not going to allow any non-compliant investors, we want to clear the country and allow serious investors to come in,” he said.
Mr Balala who was stepping down as the chairperson of Southern and East African Mineral Centre for his Ethiopian counterpart Gebreaziabher Tewdoros called for Africa to unite in getting rid of “lopsided agreements” with multi-nationals.