British firm unveils Sh683 billion gold deposits in Kakamega

By Newsflash Reporter

Shanta Gold Kenya Limited has announced plans to invest $208 million (Sh26.86 billion) in an underground gold mining project in Kakamega County, where deposits are currently valued at $5.28 billion (Sh683.04 billion).

The disclosure, contained in an environmental impact assessment (EIA) report submitted to the National Environment Management Authority (Nema), details the company’s intention to develop an underground mine and processing centre in the Isulu-Bushiangala area.

The operation will span eight years and is part of the firm’s broader ‘West Kenya Project’ covering several counties in the region.

Shanta Gold Kenya Limited, a subsidiary of Guernsey-based Shanta Gold, also operates in Tanzania. In October, the firm sought Nema’s approval for another $137 million (Sh17.7 billion) mining venture in Siaya’s Ramula, East Gem, and Vihiga’s Mwibona areas.

According to the company, the Kakamega sites at Isulu and Bushiangala—both in Ikolomani constituency—are expected to produce 1,270,380 ounces of high-grade gold. The firm’s geological assessment indicates that gold mineralisation occurs within sheared basaltic formations bordered by ultramafic rocks and conglomerates on one side and carbonaceous mudstones and sandstones on the other.

Historic gold belt and economic promise

Kakamega’s gold belt has a storied past dating back to the 1930s when colonial miners established Kenya’s earliest commercial gold mines. The name Ikolomani itself derives from the Luhya term for “gold mine,” symbolising the area’s deep mining heritage.

At current prices, an ounce of gold averages $4,111.39 (Sh530,985), valuing Kakamega’s deposits at Sh683.04 billion—equivalent to 2.3 times the county’s total economic output and 4.1 percent of Kenya’s Sh16.2 trillion GDP.

Shanta projects annual royalty payments to the government ranging between $4.3 million (Sh555.3 million) and $4.7 million (Sh607 million), plus $1.5 million (Sh193.7 million) in Mineral Development Levy.

Under Kenya’s mining laws, Kakamega County will receive 20 percent of the royalties while local communities benefit from 10 percent—equating to about Sh11.06 million and Sh5.53 million annually. Additionally, the company will enter formal agreements with affected residents to share one percent of gold revenues, potentially yielding Sh6.83 billion over the mine’s lifetime.

Massive investment and local impact

Shanta’s $208 million investment covers mine construction, installation of processing plants, power systems, and related infrastructure. The underground mine will process 600 tonnes of ore daily, with sustaining capital estimated at between $47 million (Sh6.07 billion) and $55 million (Sh7.1 billion). Annual operating costs are projected at $19 million (Sh2.45 billion).

The feasibility study highlights environmental safeguards, including waste management, water recycling, and a $4.5 million (Sh581.3 million) post-closure rehabilitation fund. The project will require approximately 337 acres of land—mainly private holdings—necessitating the relocation of around 800 households. Six resettlement sites covering 1,932 acres have been identified, offering options for compensation or relocation.

Shanta notes that the project will stimulate local economic growth through employment, business opportunities, and increased tax revenues. The firm anticipates the mine will transform Western Kenya into a major gold production hub, diversifying Kenya’s mining portfolio beyond small-scale artisanal operations that have long dominated the sector.

The government recently revised mining regulations, cutting gold royalties from five to three percent to attract large-scale investors. Kenya’s gold earnings have been on a decline, falling from Sh3.38 billion in 2023 to Sh3.02 billion in 2024, according to the Economic Survey 2024.

If successful, Shanta’s Kakamega venture could mark a turning point for the mining industry—boosting revenue, formalising production, and revitalising a region historically dependent on small-scale extraction.