Kakamega gold rush: Small-scale miners pin hopes on Sh100m refinery

Plans by the government to construct a Sh100 million gold refinery in the region has excited 80,000 artisanal miners.

Ikolomani Constituency is now a very busy place as the poor chase the golden dream. Every day, artisanal miners use makeshift machines to scoop heaps of soil from tunnels, which run up to 150ft deep, in search of the precious product.

 Mining sites are now located in several homesteads, turning their compounds into heaps of rocks, which are crushed and sieved for traces of gold.

A Chinese investor, H-NUO, has been identified to construct the gold refinery on a 12.25-acre parcel of land at Lidambitsa near River Yala.

The refinery will serve miners in the Lake Region Economic Bloc (LREB). This will be the first State-owned gold processing plant. In the initial stages of operation, the Chinese investor is targeting gold from Kakamega, Siaya, Migori, Kisii and other parts of LREB.

From Kakamega, miners will deliver 500kg of gold, Siaya will produce 300kg and Migori has a potential to produce 1 tonne annually. The refinery is expected to be operational after a year.

 Artisanal miners are paid Sh4,400 per gram of gold sold to middlemen who end up reaping the profits after the former have toiled for hours using rudimentary equipment. The Chinese will pay Sh6,200 per gram.

There are plans by the investor to help miners buy modern equipment to improve safety.

Mr Timothy Mukoshi, the chairman of the Kakamega County Artisanal Miners Committee, said miners from 172 sites were happy with the commissioning of the project at Lidambitsa.

The sites are in Ikolomani, Lurambi, Khwisero, Butere and Shinyalu.

“We get up to 10kg of gold in a week. We are happy with the construction of the refinery. Our earnings will improve because middlemen have been taking advantage by buying at a throw-away price,” said Mr Mukoshi.

Mr Khalif Hassan, a representative of the H-NUO, said the refinery will process a minimum of 25kg of gold and up to half a tonne a day.

“The artisanal miners can get 500kg of gold annually. This is quite a substantial amount that will fetch good money and change their lives. We shall also open our doors to other firms in the country,” he said.

In the deal, eight per cent of the proceeds from gold will be paid as royalty to the government while 20 per cent will go to the devolved unit while the community will get 10 per cent of revenue generated.

The Acacia East Africa Mining Company has in the last five years been prospecting for gold in Kakamega.

A survey by the mining firm established the viability of gold deposits in the county, indicating there existed 1.1 million ounces of gold in Isulu, Bushiangala, and Rosterman.

The firm later discovered high grade gold deposits at the Lirhanda corridor with a resource of 1.31 million ounces of gold whose estimated value is Sh171 billion.

In September, Shanta Gold, which took over the project from Acasia last year, announced finding a new intersection of 3.9 metres of gold between 60 and 70 metres.

The first three holes with viable gold deposits were established within the Lihranda corridor, which covers Isulu and Bushangala, in the first phase of exploration and infill drilling that was undertaken early this year.

Lihranda corridor is believed to have 1.03 million ounces of NI43-101 inferred gold estimated at Sh164 billion. Shanta Gold Limited is seeking to establish whether there is a mine before actual mining starts.

Once a mine is established, it is believed the deposits can be mined for at least 10 years. Shanta Gold chief executive Eric Zurin said they were almost halfway through the infill drilling programme planned for Western Kenya.

 He exuded confidence they would release a source update with good results later this month.

 Governor Wycliffe Oparanya said the proposed design of the gold refinery will include a processing plant to separate gold from the ore. There will also be a refinery to purify the gold.

 The feasibility was conducted by the Geofield SRL Consultants.

 “The revelation by the feasibility study that commenced in March 2019 is that there is a potential for commercial exploitation of gold in Kakamega County. But currently, exists only small scale and artisanal miners who are working in the old mines and alluvial deposits,” said Mr Oparanya.

 President Uhuru Kenyatta was expected to commission the project in August but the tour later cancelled due to the Covid-19 pandemic.

 “It is expected that once operational, the refinery will process gold mined by artisanal miners as well as the small scale and large scale mining companies in the entire East African region,” said Mr Oparanya.

 [email protected]