Rare minerals on display. A Chinese businesswoman lost Sh156 million after paying for what she believed was valuable tantalum-niobium ore.
It was her first venture into Kenya's mineral import business, but it ended in a devastating loss.
A Chinese businesswoman lost Sh156 million after paying for what she believed was valuable tantalum-niobium ore sourced from the Democratic Republic of Congo, only for the shipment that arrived in China to contain ordinary soil and rocks instead.
The man at the centre of the elaborate cross-border fraud, Lumumba Ulundu Patrick, also known as Gabriel Kulonda Ilungu and Lumumba Patrick Byarufu, a Congolese national, has been sentenced to pay a Sh10 million fine or serve three years' in prison, bringing to a close a case that exposed one of Kenya's most audacious mineral export scams.
The Chief Magistrate in Milimani, Nairobi, convicted Lumumba of obtaining money by false pretences and imposed the sentence after finding that the prosecution had proved its case beyond reasonable doubt.
"The court finds the accused person guilty on count two and hereby convicts him accordingly. The accused is sentenced to pay a fine of Sh10 million, in default serve three years' imprisonment," ruled the magistrate.
Lumumba had faced two charges: conspiracy to commit a felony and obtaining money by false pretences.
The prosecution alleged that between August 7 and December 26, 2023, he conspired with others not before the court to fraudulently obtain $1 million (Sh156 million according to exchange rates then). The amount was obtained from Ying Chen (Shenzhen) International Trade Company Limited by falsely claiming he could supply 84 tonnes of tantalum-niobium ore (tantalite) loaded in three shipping containers.
It further alleged that on December 26, 2023 he obtained the money through the same false representation.
After hearing evidence from 40 prosecution witnesses, the court acquitted Lumumba of the conspiracy charge, holding that the offence had not been established because the alleged co-conspirators had neither been arrested nor charged. However, the magistrate found that the prosecution had proved beyond reasonable doubt that Lumumba fraudulently obtained the money.
"It is adduced in evidence that the accused herein had a motive. There was no tantalum but the motivation being the money," the magistrate observed, in the June 23 decision.
High-value mineral
Tantalite.
Tantalum-niobium, commonly known as tantalite, is a high-value mineral used in the manufacture of mobile phones and other electronic components.
Evidence by DCI Operations Support Unit investigator Charles Osumba, through State counsel Hillary Isiaho showed that the fraud centred on an elaborate fake mineral export scheme involving Sanjola Company Limited, a Ugandan-registered firm that purported to sell 84 metric tonnes of tantalite to the Chinese company.
The complainant, Michelle Wu, was introduced to the deal by another Chinese national living in Kenya who claimed to have extensive experience in Africa's mineral trade. Through him, she was linked to Lumumba, who presented himself as a legitimate mineral dealer with access to large quantities of the mineral.
An initial agreement for the sale of 28 metric tonnes was signed in October 2022, although Ms Wu had wanted only 10 tonnes. Investigators said she was persuaded to commit to the larger consignment after being assured she would initially pay only for the quantity she required.
She first deposited $10,000 into an advocate's escrow account to facilitate the transfer of the consignment into her company's name before wiring a further $270,000 for shipping and legal documentation. When Sanjola failed to ship the cargo, the company blamed logistical difficulties and the high cost of splitting the consignment. As Ms Wu considered legal action, her lawyers advised her to appoint Devis Otieno under a power of attorney to safeguard her interests.
Concerned by the delays, Ms Wu later sent representatives to inspect the cargo. Although they were allowed to film the containers, they were not permitted to verify their contents.
Investigators said she was also informed that separating 10 tonnes from the 28-tonne consignment would cost about Sh84 million, prompting her to proceed with a second agreement instead.
The second sale agreement was signed on November 9, 2023, increasing the consignment to 84 tonnes at $28,000 per tonne, bringing the transaction's value to $2.35 million.
On December 26, 2023, Ms Wu transferred a further $1 million to the advocate's escrow account on the understanding that the money would only be released after the shipment arrived at Nansha Port in China and the mineral was confirmed to be genuine.
Scheme unravels
The scheme unravelled when the three containers reached China and were opened for inspection. Instead of the black-coloured tantalite ore used in the manufacture of electronic components, they contained ordinary brown soil and rocks.
Realising she had been defrauded, Ms Wu immediately instructed her bank to stop any further transactions and reported the matter, prompting investigations by Kenyan authorities.
Mr Osumba testified that investigations established the containers had been cross-stuffed at the Mombasa Container Terminal before shipment, allowing the genuine cargo to be replaced with worthless material.
He told the court that on November 18, 2023, Lumumba obtained customs authorisation to conduct the cross-stuffing exercise.
Investigators alleged that the process created the opportunity for the genuine minerals to be substituted with soil and rocks before the containers were shipped to China.
"The contents, packed in metallic drums, were not visible during physical inspection at the warehouse," Mr Osumba testified.
A fourth container was later recovered in the Toyo area of Mombasa, still containing the suspect material.
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