On January 3, the High Court declined Rockland Kenya Ltd’s request to stop the implementation of a previous directive on export permits.
Rockland was referring to a September 7, 2017 directive that requires miners to seek export permits from the Mining Cabinet Secretary instead of the Director of Mines. The company claimed that the minister was frustrating its business operations and that the delay in processing the export permit was a violation of its rights under Article 40(2)(a) of the Constitution, which forbids the enactment of any law that deprives a person of property or interest.
In his ruling, High Court judge Anthony Mrima said although the firm has an arguable case, it did not demonstrate that it had made an application for the export permit to the Cabinet Secretary under the disputed directive, and that the application had been declined.
“The petitioner instead took a position that it cannot make the application to the Cabinet Secretary, but only to the director of mines since that is what it understands the law (Mining Act) to require,” said the judge.
But Rockwell’s application was a pointer to a more worrying development among the residents of Kwale and Taita Taveta counties, which sit on the Mozambique belt and have some of the richest mineral deposits in East Africa.
Geological experts say the counties are the main global source of tsavorite (green garnet) and rubies. Both are in high demand internationally.
Taita Taveta county is home to over 40 high value gemstones, including sapphire, garnet, tourmaline, tanzanite and quartz.
But it is only rich in name as dealers are sucking the region dry of mining proceeds.
Trying to make ends meet, local miners sell quality gems at throwaway prices to dealers who control the market and set the prices.
“I struggle to get tourmaline and tanzanite deep in the Tsavo National Park. But because of my needs, I do not have time to go to Nairobi to get a licence for export. So I sell to the brokers,” said John Maghanga, a miner at Kamtonga in Mwatate sub-county.
He added, “We sell tourmaline at about $200 per kilogramme but we know it fetches more than $500.”
The locals say the requirement of the Kenyan government for export licences increases the cost of doing business and complicates the business.
The locals sell the gems to foreign dealers who cross over into Arusha in Tanzania, which is the East Africa’s gemstones capital.
Kuranze, Mkuki, Kamtonga and Mwatate towns are the areas where unlicensed dealers operate.
At the heart of the underground trade are dealers from Sri Lanka, Thailand and Tanzania, who pose as tourists visiting the Tsavo national parks.
In July 2021, a multi-agency team led by the Kenya government raided Voi town and arrested 23 Sri Lankans and deported them.
Some of their accomplices fled to Nairobi, Mombasa and Taveta.
Alice Wawuda, a licenced small-scale miner said the smugglers buy the gemstones from locals, and once abroad, the precious stones are polished and sold on the international market with a falsified country of origin.
"Our local mining business is controlled by cartels that set prices. The artisanal miners are losing out on various opportunities because of delayed issuance of the dealer's licence," said Davis Tayo, an official from the Africa Social Financing Centre.
According to Mr Tayo, the government should issue licences to local dealers to lock out cartels that have invaded the county.
The Centre has partnered with Taita Taveta Artisanal Miners Association to form the Tsavorite Market and Auction Centre, to help local small-scale and artisanal miners access the market directly.
"Many miners have no idea how to access international markets and don't know the value of their stones. That is why they are taken advantage of," he said.
The construction of the gemstone centre in Voi town, which was completed in 2018, gave hope to local miners who banked on the centre to sell their processed stones.
"Once the facility is open, all foreigners will be compelled to do business at the centre," said Edward Omitto, the centre manager, adding that the facility will regulate the price, and help the miners in marketing their stones.
Last August, the Kenya Revenue Authority (KRA) started implementing Regulation 18 of the Mining Act (Dealings in Minerals) Regulations, 2017 after it was accused by of failing to collect more than $14,000 from 27 registered mining firms in the 2018/2019 financial year.
The audit report indicated that some local companies have been exporting huge quantities of minerals without permits.
The report stated that the government only pocketed $72,000 and $744,200 in mineral export levy and mining royalties respectively for the year under review – figures considered low seeing as the minerals have been exported since 2016.
KRA Commissioner-General Githii Mburu has since admitted that the government has been losing revenue worth hundreds of millions of shillings after it emerged that some local companies have been exporting huge quantities of minerals without permits.