ARM Cement faces loss of key mining licences
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