Taita Taveta-based iron ore mining company, Samruddha Resources Kenya Limited is set to resume operations after a two-year shutdown, targeting orders from a new steel processing factory planned for construction in the county by the giant Devki Group.
The company says it plans to invest an additional Sh300 million in mining and technological equipment, on top of the Sh1 billion investments it has already made.
“The government’s imposition of the export and investment promotion levy had a huge impact, as it caused us to close down our operations, as it became unviable to import iron ore. However, the recent developments where Devki Group has decided to put up a steel plant in Taita Taveta has offered an opportunity to restart the mining operations, since the plant will be buying iron ore in Taita to process steel,” Samruddha’s Managing Director Vinay Patil said.
The company has struck a deal with Devki Group to supply 30,000 tonnes of iron ore to the steel plant monthly, which Mr Patil says will not only see over 2,500 workers who operated the company’s mines resume work but also boost the county and local community’s revenues.
Before closing, the company employed 120 persons on permanent terms while 2,500 worked as casuals.
“These 2,500 persons have been out of work since we closed down since we only continued paying salaries for the 120 workers,” he said. In the past, mining operations have caused disputes between mining firms, local communities, and county governments, mainly based on revenue sharing.
Mr Patil said the company had struck a deal with Kishushe Ranching Co-operative- the leaseholder of the land under its mining activities- to pay it Sh100 for every tonne of iron ore mined and supplied, while the county will pocket Sh150 per tonne in cess.
Devki Group, which also opened a clinker plant in West Pokot last year, said it would source 70 percent of its raw materials from small artisanal miners in Taita Taveta. The company has been in an aggressive expansion following the imposition of a 17.5 percent export levy on imports of clinker and iron ore, among other products, in the Finance Act, 2023.
“We are looking to invest more money in more equipment and newer technologies to ensure environmentally sustainable mining... We plan to invest an additional Sh300 million on top of the Sh1 billion investment to achieve this,” Mr Patil said.
