ARM Ce­ment faces loss of key min­ing li­cences

Business Daily (Kenya) - - FRONT PAGE - Brian Ngugi @bn­­tion­

Trou­bled ce­ment maker ARM is fac­ing sus­pen­sion of its min­ing li­cences in a move that could fur­ther crip­ple the firm’s op­er­a­tions.

The Min­ing Act, which came into force on May 27, 2016, lists in­sol­vency as a con­di­tion that could trig­ger sus­pen­sion or re­vo­ca­tion of a min­ing li­cence.

UBA Bank placed ARM un­der ad­min­is­tra­tion as the ce­ment firm strug­gled to re­pay a Sh500 mil­lion overdraft.

Loss of ex­ist­ing li­cences and de­nial of ap­proval for pend­ing ap­pli­ca­tions would hit hard ARM’S re­cov­ery ef­forts.

A turn­around plan that was crafted be­fore the com­pany was placed un­der ad­min­is­tra­tion was hinged on in­jec­tion of work­ing cap­i­tal and the avail­abil­ity of raw ma­te­ri­als for ce­ment pro­duc­tion.

“The Cabi­net Sec­re­tary, on the rec­om­men­da­tion of the Min­eral Rights Board, may sus­pend or re­voke a min­eral right if the holder… is ad­judged bank­rupt… (or) is sub­ject to fi­nan­cial dif­fi­culty,” says sec­tion 173 (f ) and (g) of the Min­ing Act.

Min­ing prin­ci­pal sec­re­tary John Omenge

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