A section of the East African Portland Cement Company plant in Athi River on January 25, 2023.
At least four firms paid the government Sh273 million mining levy arrears amid pressure from the State Department for Mining that sent demand letters and suspended operations for one of them, a new report reveals.
The state department says the companies paid up the arrears between 2023 and last year, though the amount is still far short of the Sh2.78 billion it was owed by end of June last year.
Companies pressured to pay the levy arrears are the East African Portland Cement (EAPC), Tata Chemicals Magadi, Carbacid, and African Diatomite Industries, an Auditor-General’s report says.
Soda ash manufacturer, Tata Chemicals Magadi, paid the highest amount though the entire amount has not been confirmed.
“The management status report indicates that state department has collected Sh715,333,516 from Tata Magadi as at 27 September, 2024, however, the receipts attached indicate that that management received Sh229,763, 240 in the months of July 2023 to March 2024 from Tata Magadi,” the report notes.
This leaves Sh485.57 million that the state department claims to have received from the company but which is yet to be confirmed.
The main gate of Tata Chemicals Magadi Ltd on January 17, 2024.
Natural carbon dioxide gas processor, Carbacid, also paid Sh32 million, a status report by September last year showed.
“The recommendation is partially implemented as the amount due from Carbacid (CO2) Ltd is not fully recovered as management has recovered Sh32,614,900 and the status report was submitted to the National Assembly,” Auditor-General Nancy Gathungu notes.
A previous audit showed that Carbacid owed Sh94.9 million in mining levy arrears by June 2023.
Diatomaceous earth products producer, African Diatomite, paid Sh10 million out of a royalties debt of Sh17.5 million after the State suspended its operations in September 2023 to pressure it to pay, the report notes.
“The management submitted that the Ministry on 12 September, 2023 suspended their operations due to non-payment of royalty. The company paid arrears to the tune of Sh10,000,000 on 20 November, 2023. The Ministry continues to engage the company to clear the arrears,” the report says.
While the EAPC owed the State Sh370.8 million by June 2024, the report says the company paid a paltry Sh700,000. The company had, however, committed to pay Sh3.3 million monthly.
EAPC had made the commitment following demand letters sent by the state department, which reveals it is exploring legal ways to pursue the debt.
“The EAPC Company in response to the above demand letters, committed to an arrears payments plan of Sh3.3M per month,” Ms Gathungu notes.
“The recommendation is partially implemented as management has issued demand notices to EAPC Company and have collected Sh700,000 after Parliament deliberations,” she added.
In a report for the year to June 2024, Ms Gathungu revealed that the State Department for Mining was owed Sh2.78 billion by different companies, with cement levy arrears accounting for Sh370.8 million.
The Sh2.78 billion marked a 22.5 percent increase in the arrears, from Sh2.27 billion in June 2023.
