Kenya aims to boost mining GDP share to 10%, risking $62 billion project

Kenya's government has set a target to increase the mining sector's contribution to gross domestic product from approximately 1% to 10% within the next decade. This ambitious shift aims to transform the economy by leveraging mineral wealth, a move that has sparked intense debate in the coastal town of Mrima.

The proposed development focuses on Mrima Hill, a forested area near the Indian Ocean coast and the Tanzanian border. The site contains deposits of niobium and rare earth elements. In 2013, projections estimated the project's potential gross revenue at roughly $62 billion over 23 years. That figure was based on commodity prices at the time and excluded development and operating costs.

Minister Hassan Joho told The Associated Press earlier this week that a technical committee is currently evaluating five proposals. He stated that an announcement regarding the winner will follow within two to three weeks. The ministry has not disclosed the nationalities of the bidders due to confidentiality rules, but specific companies have confirmed their participation.

Australian company RareX said its consortium with Iluka Resources submitted a technical and financial proposal on Oct. 21. Critical Metals Corp., a Nasdaq-listed company, stated in July that its consortium had been shortlisted for the final stage of bidding. Joho noted that the government views local mineral processing as a key strategy to create jobs and reduce reliance on foreign markets.

Residents, however, report a lack of information regarding the project's scope. Justus Mwero, chairman of the Mrima Farm Owners Community-Based Organization, said the group, which represents about 500 registered farmers, has not been informed about the process. "We don't know how people are going to be looked after, or what impact the project will have," Mwero said.

The Mrima Hill Digo Community Trust, formed in 2025, argues that the site holds spiritual value beyond its minerals. The area includes a sacred forest known as a kaya, where residents believe their ancestors are buried. The forest reserve was designated a national monument in 1992. Masoud Suleiman Mwarizo, the trust's chairman, said the community will refuse any digging of the hill.

Rama Bindo, treasurer of the Digo Community Trust, warned that residents without formal title deeds are particularly vulnerable to land grabbing. Under Kenya’s Mining Act, a mining licence holder must sign a community development agreement and compensate landowners before starting work. Principal Secretary Harry Kimtai said the government will monitor compliance if disputes arise.

The Centre for Litigation Trust filed a petition on June 22 asking the High Court in Kwale to suspend a proposed Kenya-U.S. agreement to develop the site. The group argues the bidding process lacked transparency. A ruling on the government's objection to the court’s jurisdiction is scheduled for Nov. 6.

Fakii Omar of the Kwale Mining Alliance said residents still do not know the extraction method. "Will it be open-pit mining, and what will be the impact on the environment and on health?" he asked. RareX said its proposal includes further study to determine if underground mining is possible and aims to secure community support before operations begin.

The National Environment Management Authority did not respond to questions about the environmental assessment. The National Museums of Kenya also did not respond to a request for comment. A technical decision is expected in the coming weeks.