Kenya discovers gold deposit worth around €4.5 billion

In Kakamega County in western Kenya, gold has been discovered on a scale the country has never seen before. The area lies north of Kisumu, close to Lake Victoria, where small-scale mining has long been part of everyday life for local miners.

British-owned mining group Shanta Gold Limited has confirmed a discovery of around 1.27 million ounces of gold in the so-called Isulu–Bushiangala project. Based on current gold prices, the value is estimated at around €4.5 billion.

In 2023, Kenya produced only around 410 kilograms of gold on an annual basis. This puts the country far behind African gold giants such as Ghana, South Africa and Sudan, which each produce in the million-ounce range.

If the Kakamega discovery can be fully exploited, Kenya could take a clear step away from the role of little brother on the continent’s gold scene.

The find is described as the largest confirmed gold deposit in Kenya in decades, according to Business Insider Africa, which cites the country’s own authorities and a comprehensive environmental report.

Billion-euro mine underground

The plan is a large underground mine beneath fields and villages in Kakamega South. The project’s environmental assessment has been submitted to the National Environmental Management Authority (NEMA) and outlines a mine covering an area of approximately 337 hectares.

Shanta Gold will use the Long Hole Open Stoping method, a mechanized underground technique that limits surface intervention. After excavation, the underground voids will be filled with cement-mixed material to stabilize the rock.

Approximately 136 hectares of land will be used, and the company estimates that up to 800 households will have to move. The company has identified six potential resettlement areas and proposes a combination of cash compensation and relocation within the local area.

The core of the project will be a plant capable of processing around 1,500 tons of ore per day, along with a 12-megawatt power plant and a facility for storing residual material from production.

The investment in construction is set at around €160 million, and the mine is planned to operate for at least eight years.

• The project will secure permission to extract the Isulu–Bushiangala gold for economic purposes, according to the company. They also emphasize that a well-functioning mine can boost the local economy through new jobs and more orders for local companies.

Jobs, billions and worries

If the mine is approved by NEMA, it could change both Kakamega and Kenya’s economy. Under the country’s Mining Act, 3 percent of total gold sales must be paid in royalties.

One-fifth of that pool goes directly to Kakamega County, and one-tenth will fund development projects in the communities where the mine is located. In addition, Shanta Gold has promised that 1 percent of the total gold value will go directly to the host communities through special development agreements.

This could generate annual revenues in the order of hundreds of millions of euros for the state, the region and local communities when production is running at full capacity.

At the same time, economists point out that the project can attract new foreign investment and provide a more robust economic foundation alongside agriculture and tourism.

The company expects hundreds of direct jobs in both the construction and operational phases, as well as a wave of spin-off jobs in transportation, services and subcontracting.

However, the picture is not all golden numbers. The project is close to both the Kakamega Forest and important river systems. Local media and authorities point to the risk of pollution, pressure on water resources and social tensions as families move off their land.