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Global mining firms sue Kenya for $3.2 billion compensation

Global mining firms want Kenya compelled to pay Ksh334 billion ($3.2 billion) as compensation for cancelling their licences.

Trade Principal Secretary Chris Kiptoo says Kenya is actively involved in about 10 suits before a Dubai-based disputes tribunal.

“There are ongoing cases at ICSID with claims amounting to Ksh334 billion. We have seen how vague language in investment treaties can result in massive payouts.

“Kenya has developed a model investment treaty and an investment agreements policy with clear rules and responsibilities,” said Mr Kiptoo at the 11th Annual Forum of Developing Country Investment Negotiators in Nairobi.

Pending before the International Centre for Settlement of Investments Disputes (ICSID) is a Ksh200 billion ($2 billion) claim by Cortec Kenya Limited and a Ksh61.8 billion ($609 million) claim by WalAm Energy Incorporated.

The other disputes have not yet been posted on the ICSID’s website.

Other firms that lost licences include Sirmonet Mineral Kenya, Yongtai Mining Company, Balham Trading Company, Ololunga Mining and Industrials as well as AQ Kenya Gold Ltd.

Cortec’s prospecting licence for Niobium and rare earth at Mrima Hills in Kwale County was revoked months after it obtained a National Environmental Management Authority permit and subsequently announced a planned Ksh44 billion ($434 million) investment in the venture.

The government said Cortec’s 21-year licence was issued against the laid down regulations that banned exploration of minerals in a gazetted forest.

WalAm’s 30-year licence to explore geothermal suffered a similar fate in 2012 when the Kenyan government accused them of breaching the contract terms in regard to construction of plants.

Mr Kiptoo said the decisions were taken to safeguard the environment, public health, avert taxation disputes as well as cool down tempers among resident communities identified for eviction to pave the way for the mining projects.

Mr Kiptoo said a National Trade Negotiation Taskforce had been formed to review all treaties with a view safeguarding national interest.

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