Shanta Gold Kenya Limited (SGKL) is set to launch new gold mining projects in Siaya and Vihiga counties, with an estimated budget of Sh17.71 billion ($137 million). The open-pit mining initiatives will span 175 hectares in the Ramula area of East Gem, Siaya County and in Mwibona, Vihiga.
The company disclosed that the projects will utilize open-pit mining techniques for developing gold mines on greenfield sites. Financial projections include a capital cost of $137 million (Sh17.7 billion), annual operating costs of $45 million (Sh5.8 billion), and yearly royalties of $2.6 million (Sh335.9 million). Additionally, SGKL will contribute $1 million (Sh129.2 million) annually for the Mineral Development Levy. Shanta emphasized that the payment of royalties and taxes would benefit local communities through social programs and infrastructure development.
In line with the Mining (Community Development Agreement) Regulation, SGKL will formalize agreements with project-affected communities, sharing an extra one percent of the gold’s value produced. The local economy could also benefit as capital and operational expenditures may support Kenyan businesses providing goods and services for the projects.
To attract greater investment, the Mining Ministry has reduced royalty charges for gold miners from five percent to three percent of the gross value of extracted gold. Historically, Kenya’s gold mining has been dominated by artisanal and small-scale operations, often characterized by risks such as mercury use, poor working conditions, and child labor.
According to the Economic Survey 2024, Kenya’s earnings from gold mining fell to Sh3.17 billion last year, down from Sh3.38 billion in the previous year, with gold production dropping to 410 kilograms from 563.6 kilograms in 2022.
Under Section 183 of the Mining Act, 2016, holders of mineral rights are required to pay royalties to the state, with revenues shared among the national government, beneficiary counties, and local communities.
