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  • Shanta Gold Kenya Limited eyes new Sh17bn gold mining projects in Kenya

    Thu Oct 17 2024

    West Kenya gold explorer Shanta Gold Kenya Limited (SGKL) plans to roll out new Sh17.71 billion ($137 million) mining projects in Siaya and Vihiga counties.

    The open-pit gold mining projects are expected to cover 175 hactares in Ramula, East Gem, Siaya County and Mwibona in Vihiga.

    “The project entails the use of open pit mining technique for the potential development of a gold mine,” the company said in a disclosure, adding that the proposed project will be developed on a greenfield.

    The firm said the project will incur financial costs including a $137 million (Sh17.7 billion) capital cost, operating costs of $45 million (Sh5.8 billion) per year, and, royalties of $2.6 million (Sh335.9 million) per annum, and with all other government contributions of $1 million (Sh129.2 million) every year for the Mineral Development Levy.

    “The payment of royalties and taxes by the proponent will be converted to benefits to the community as these funds are filtered into social schemes and infrastructure within Kenya,” Shanta said.

    “Furthermore, in compliance with the Mining (Community Development Agreement) Regulation, SGKL will be required to enter into a formal agreement with project-affected communities and share an additional one per cent of the value of gold produced. Similarly, capital and operating costs may benefit Kenyan businesses that supply goods and services required for the development and operation of the project” it added.

    The Mining ministry has lowered the royalty charges for gold miners, hoping to attract bigger investments into the nascent industry.

    New regulations by the ministry show that miners will now pay a three per cent royalty on gross value of extracted gold, down from five per cent previously. Gold mining has over the years largely featured artisanal and small-scale operations in a mainly informal process that involves risks such as the use of mercury, perilous working conditions, and child labour.

    Kenya’s earnings from gold mining dipped to Sh3.17 billion last year down from Sh3.38 billion the previous year, according to the Economic Survey 2024.

    The data shows that 410 kilogrammes of gold were realised during the period down from 563.6 kilogrammes in 2022.

    Section 183 of the Mining Act, 2016 provides that any holder of a mineral right shall pay royalties to the State in respect of the various mineral classes won under the law. Revenues arising from mineral royalties would then be shared among the national government, beneficiary counties, and locals.

     

    Source: https://nation.africa/

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