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Economy

Miner takes battle for licence to High Court

Cortec Mining Kenya Limited managing director David Anderson at a past function. Photo/File
Cortec Mining Kenya Limited managing director David Anderson at a past function. Photo/File 

Cortec Mining Kenya Limited has moved to court seeking to reverse a decision by Mining Cabinet Secretary Najib Balala to cancel its mining licence.

The firm told Justice Weldon Korir, who termed the case “very very urgent”, that the decision was unlawful and that it stands to lose $600 billion (Sh53 trillion).

The company says it had obtained the National Environment Management Authority’s approval to undertake mining works at a cost of Sh13 million.

Other approvals, it says, had been given by the Kenya Forest Service and the then County Council of Kwale, adding “we had not breached the mining Act in any way”.

The company sought court orders to revoke the directive by Mr Balala since it had been issued with a Special (Mining) Licence No.351 on March 7, 2013 and that it was about to commence the mining.

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“By August 5, the applicant had completed the prospecting and exploration in terms of the licences and identified commercially viable deposits of niobium and rare earths elements at a cost of about Sh475 million,” Cortec managing director David Anderson states in a supporting affidavit.

“In addition, nearly Sh500 million has been invested by the applicant company in the Mrima Hill project (in Kwale County), the net present value of the mineral resource...stands in excess of $1 billion whereas the in-ground value stands in excess of $600 billion.”

Mr Justice Korir certified the case urgent and directed lawyer Nelson Havi to serve the suit papers on Mr Balala and the Attorney General who have been named as respondents.

“Serve the respondents and come back on August 20, 2013 for hearing,” he told Mr Havi.

The company said that the action and decision by the respondents to withdraw its mining licence was “actuated by and based on an ulterior motive”.

The company said that upon acquisition of that licence it embarked on putting in place infrastructure to begin the mining of the minerals.

“The issuance of the licence did not contravene any provision of the Mining Act Cap 306 specifically Section 17(2) (b) under which the licence was issued or indeed any known statutory provision,” said Mr Anderson.

Mr Havi told the judge that he will be asking the court to quash the decision taken by the minister and further prohibit him from taking any action which is detrimental to the interests of the company.

Cortec is asking the court to restrain civil servants from taking any further action against it and allow the company to proceed with mining activities.

In the suit papers, the company states the decision and action of Mr Balala contravenes the provision of Sections 17 to 56 of the Mining Act Chapter 306 in the Laws of Kenya.

The company says the revocation of a licence is preceded with proof of breach of the terms and conditions of the licensee and failure to show cause in respect thereof from the Commissioner of Mines.

Cortec was first issued with special prospecting licence Number 256 for a term of two years in April 2008 to cover 1,180 square kilometres in Kwale District.

The licence was renewed on November 25, 2011. The company said that it had complied with the conditions of the licence prior to its withdrawal.

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