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HomeBUSINESS500 Jobs on the Line as Mining Company Shut Over Debt

500 Jobs on the Line as Mining Company Shut Over Debt

Tata Chemicals Magadi company operations have been halted at the Kajiado depot over the land rates arrears owed to the Kajiado County Government

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The Ksh10 billion levies row between Soda ash extraction company and the Kajiado County has boiled over, putting over 500 jobs and billions of revenues on the line. Tata Chemicals Magadi company operations have been halted in the Kajiado depot over the land rates arrears owed to the Kajiado county government.

In a letter written by Regional Business Connection (RBC), a Nairobi company hired by Kajiado County to recover debts, the soda ash mining company has defaulted on county charges and taxes. The matter over the arrears has been pending since the year 2018.

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“It is given your company’s continued legal defiance that we hereby order the closure of your business premises in Magadi and at Kajiado Railway station as from Monday, January 16 2024 by yourselves voluntarily as guided by Section 22, Part IV of the Kajiado County Finance Act 2023 up and until when you regularize payments with our client or an agreeable repayment plan of all outstanding payments is agreed upon,” reads parts of the letter.

The letter further indicated that Kajiado County will station enforcement officers in all Tata Chemicals Magadi Ltd premises within Kajiado County to ensure compliance with the order.

By Wednesday, the soda ash company had not yet complied with the orders, and their Kajiado depot was closed by inspectorate and revenue officers from the county.

In his response, Tata Chemicals Magadi Ltd Managing Director Subodh Srivastava termed the closure of the company as illegal and unfounded.  He said the county debt collector lacks the authority to close any facility without a court order, as the matter of rates is currently before the Court of Appeal awaiting determination.

He adds that the closure of the company jeopardizes its pivotal role in the country’s development agenda, and impacts GDP and vital foreign exchange earnings from international markets. The government stands to lose over Ksh560 million in royalties to the Ministry of Mining and over Ksh1.3 billion in taxes to the Kenya Revenue Authority.

He also adds that the move poses a severe threat to the well-being of the company’s 490 employees and over 800 contractors and their families, as well as the Maa Community, which derives substantial benefits from the company’s operations.

“It will also disrupt various community impact programs, including the operation of a 55-bed Level 4 hospital providing subsidized healthcare, the education of over 500 pupils at Magadi Primary School, and the provision of bursaries to needy students in the community. Additionally, it will impact the supply of water to the community and the Kenya Police College based in Magadi,” Mr Srivastava said.

Mr James Ndwiga, the field operations manager at RBC noted that Tata Chemicals was served with a county invoice and a reminder of the outstanding amount last year but the company has not shown any interest in settling the amounts or any matter outstanding therein.

He said the the judge had directed in a ruling made on 3rd May 2019 for the two parties to settle the matter within six months via arbitration guided by relevant national ministries. Tata Chemicals, however, opted out of the arbitration proceedings which were being guided by the then Ministry of Mining and Petroleum as directed by the Kenya High Court without showing any cause.

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BT Reporter
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