Shanta Gold to invest US $137m in gold mining projects in Kenya
Shanta Gold Kenya Limited (SGKL) has announced plans to invest a sum of US $137million in new gold mining projects in Kenya.
The projects set to cover to cover 175 hectares will be situated in Ramula, East Gem, Siaya County and Mwibona in Vihiga. It will be open-pit gold mining projects. This greenfield development involves a capital cost of US $137 million, annual operating costs of US $45 million, and US $2.6 million in royalties per year, along with an additional US $1 million annually for Kenya’s Mineral Development Levy.
Community Development Agreement
As part of its social responsibility and compliance with the Mining (Community Development Agreement) Regulation, SGKL will also share 1% of the gold value with affected communities, ensuring local benefits through social and infrastructure projects. The Kenyan businesses supplying the project will further benefit from the operating and capital costs.
To encourage larger investments in Kenya’s mining sector, the government recently reduced the royalty rate for gold miners from 5% to 3% of the gross value. This aims to attract formalized, large-scale gold mining operations, in contrast to the informal artisanal mining that has historically characterized the industry, often plagued by hazardous working conditions and child labor.
However, Kenya’s gold production and revenues have seen a decline. In 2023, the country realized 410 kilograms of gold, down from 563.6 kilograms in 2022, resulting in a revenue decrease from KSh 3.38 billion to KSh 3.17 billion.
