Tata Chemicals Magadi Limited has warned that the suspension of its mining operations threatens more than 1,100 livelihoods and could derail a planned Sh3.62 billion expansion project as a legal dispute with the government continues.
The soda ash producer says a prolonged shutdown could cripple its operations, disrupt contractual obligations and expose the company to significant financial losses.
In court papers, the company said it directly employs more than 500 people and has outsourced services to contractors who engage another 600 workers.
“The applicant directly employs over 500 employees and has outsourced the service by contractors of another 600 people and the continued suspension places over 1,100 livelihoods in immediate jeopardy,” the court papers state.
Tata Chemicals Challenges Mining Suspension
The dispute centres on the decision by the Ministry of Mining, Blue Economy and Maritime Affairs to suspend the company's operations over alleged regulatory breaches.
Tata Chemicals is challenging the decision, arguing that the suspension was imposed without adequate notice or adherence to fair administrative procedures.
The company maintains that the order was issued for an indefinite period without clear timelines, measurable compliance requirements or a transparent process for lifting the suspension.
It argues that the uncertainty leaves its operations dependent on the ministry's decision, with no clear indication of when it can resume business.
The company has also warned that continued suspension could force it to consider declaring about 500 direct employees redundant.
Sh3.62 Billion Expansion Project in Jeopardy
Tata Chemicals says the shutdown could derail its planned Sh3.62 billion expansion project, adding to the financial risks arising from the interruption of its mining activities.
The company argues that delaying the court proceedings while the suspension remains in force would prolong its inability to operate and fulfil contractual commitments.
It has therefore opposed an application by the Kajiado County government seeking to participate in the judicial review proceedings, maintaining that the case should focus on whether the ministry acted lawfully in suspending its operations.
Kajiado County Raises Sh11.4 Billion Land Rates Claim
Kajiado County is seeking to join the proceedings, arguing that the outcome could affect its financial interests and the welfare of communities living around the mining operations.
The county says it was pursuing outstanding land rates amounting to Sh11.4 billion as of February 2023. It also says it previously attempted to enforce payment by withholding various business and trading licences.
The resulting dispute prompted Tata Chemicals to seek court intervention, while separate proceedings concerning the land rates remain pending before the Court of Appeal.
The company argues that disputes over land tenure, lease expiry, royalties and other financial claims should be handled separately from the judicial review proceedings challenging the suspension.
Kajiado County, however, maintains that its interest extends beyond revenue collection to environmental protection and the economic welfare of residents affected by the company's activities.
Ministry Defends Decision to Suspend Operations
The Ministry of Mining maintains that the suspension was necessary to compel compliance with statutory requirements.
In court documents, Secretary of Mines Thomas Mutwiwa argues that the company had repeatedly been notified of alleged violations, including unpaid royalties and accumulated arrears.
The competing positions leave the court to consider the legality of the suspension alongside the applications concerning participation in the proceedings.
For Tata Chemicals Magadi, the outcome carries significant implications for its workforce, contractual commitments and planned investment. The company is seeking to have the suspension dispute resolved as it warns of the consequences of an extended interruption to its operations.
