Day Uhuru met Cortec bosses

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Cortec workers at the Mrima Hill niobium mining site in Kwale. President Uhuru Kenyatta met directors of the company which has made claims that Mining Secretary Najib Balala cancelled its licence after it failed to pay him a Sh80 million bribe. Photo/FILE  

By EMEKA-MAYAKA GEKARA gmayaka@ke.nationmedia.com
Posted  Saturday, August 10  2013 at  21:28

President Uhuru Kenyatta met directors of the company which has made claims that Mining Secretary Najib Balala cancelled its licence after it failed to pay him a Sh80 million bribe.

Mr Balala has denied the allegation by Cortec Country Director Jacob Juma, saying it was “corruption hitting back”.

Owned 70 per cent by Canadian Pacific Wildcat Resources which is listed in the Toronto stock exchange, Cortec last month announced discovery of niobium and rare earth minerals whose value it estimated to be Sh51.2 trillion at Mrima Hills in Kwale County where it has been operating since 2007.

However, Mr Balala on Monday cancelled their mining licence alongside those of 42 other firms, saying they were issued under questionable circumstances. The Mining Secretary argues that the Cortec licence was awarded after the dissolution of the 10th Parliament when there was no proper legal framework for the process.

“We are revoking all licences from miners and mining companies for us to understand the process used to issue them and confirm that the people they were awarded to are qualified to hold them,” he said.

Commissioner of Mines Moses Masibo was also suspended to pave way for investigations into the issuing of licences between January and May this year. A special team led by lawyer Mohammed Nyaoga will conduct the investigations.

But the Balala decision comes barely three months after President Kenyatta met with Cortec directors — including Mr Juma — at State House, Mombasa, and threw his weight behind the Kwale project.

President Kenyatta met the directors on April 26, two weeks after his swearing-in.

“We will support the development of the Mrima Hills Niobium and Rare Earth Project and the efforts of Cortec Mining Kenya but are keen to ensure that exploitation of the minerals benefits the country,” said President Kenyatta during the meeting, according to a press release by his media team.

Positive effect

The President said the commercial development of the project will have a significant positive effect on all the stakeholders including the local community, Kwale county and the country.

Others in the Mombasa meeting included Cortec Managing Director David Anderson, Mr Masibo, Interior Principal Secretary Mutea Iringo, Mr Don O’Sullivan (CMK chairman), directors Darren Townsend and Mr Juma. It is unclear how much the President, who was barely two weeks in office, knew about the project.

Contacted yesterday, Mr Juma described the meeting as cordial. “The President supported the project and stressed that it should benefit the people of Kenya. This partly informs our shock with Mr Balala’s cancellation of a project which has the full support of his boss,” said Mr Juma. Niobium is mainly used to make alloys for jet engines and strengthen steel, while rare earths are used in modern technology including cars and phones.

The businessman is also at the centre of a dispute in which the National Cereals and Produce Board has been ordered to pay his company, Erad Supplies, Sh500 million for breach of contract.
Mr Juma claims there was nothing improper with their March licence.

The firm was issued with a Special Prospecting Licence for a two-year period from April 1, 2008 to March 31, 2010. The licence was renewed for two more years to March 31, 2012. However, in December 2011, it was extended for a period of three years until December 1, 2014.

“If the Cabinet Secretary does not rescind his decision on the licence, we will be forced to sue the government and Balala as an individual,” Mr Juma has declared.

“It is a sham that a newly appointed Cabinet Secretary demands a bribe while the President is committed to developing this country,” said Mr Juma.

But Balala said he had a track record that was free from any corruption and he will not be bogged down by the allegation.