Shanta Gold to invest Ksh18 billion in mining project in Vihiga and Siaya

Shanta Gold Kenya Limited is seeking to invest nearly Ksh18 billion ($137 million) in a gold mining project on a 175-hectare area cutting across Vihiga and Siaya counties.

The company recently commissioned a study to determine the viability of developing an open pit gold mine and processing facility for gold deposits discovered in the Ramula-Mwibona area on the border of the two counties.

Shanta Gold Kenya Ltd, whose local head offices are located in Kisumu, is a wholly owned subsidiary of Shanta Gold Limited. Part of the capital cost for the project will be used to pay private landowners to purchase their land. The firm picked Kurrent Technologies Limited (KTL) as an in-country partner and Digby Wells Environmental do undertake the study.

The study has revealed that the development of the project will cost $137 million in capital expenditure, operating costs of $45 million per annum and, royalties of $2.6 million per annum and with all other government contributions of $1 million per annum for the Mineral Development Levy.  

The costing is based on 2022/2023 cost figures for reference. The total initial (pre-production) capital cost is estimated at $137 million. This includes significant costs associated with preproduction open pit stripping and mining ($36 million) and resettlement and regional road relocation ($27 million). The mining, plant, and infrastructure costs were benchmarked from recent experience from the Singida mine build, which had an initial capital cost less than $60 million including mining.

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Shanta Gold holds several gold prospecting licenses. In Western Kenya, the firm has been licensed to prospect on 580 square-kilometers across Siaya, Vihiga, Kakamega and Kisumu. The company has also been producing gold in Tanzania in Songwe District since 2012 and Singida region in Central Tanzania since 2020.

Gold mining is a major business in Western Kenya. The trade is mostly dominated by foreigners, who use the locals to retrieve the resource through various mining methods, including open cast. Most of the mining is artisanal.

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