ARM and EAPC risk sanctions due to royalty arrears

Athi River Mining (ARM) and East African Portland Cement (EAPC) are risking their operating licence following an audit report of companies in the cement sector that are in royalty arrears with the Kenyan state, according to a report by Agence Ecofin.

A taskforce report recommended to the Ministry of Mines that the granting of such licences be tied to the payment of royalties or cement levy. It also wants payment records to be used as one of the licensing conditions. “To enhance royalty or revenue collection, we recommend that payment of royalty and cement levy should be one of the performance conditions,” the taskforce, led by Fred Wandera and Gregory Kituku states.

The arrears total KES96.5m (US$961,787) for ARM Cement and KES68.3m for EAPC. Savannah Cement also has reportedly a balance of KES20m due to the state department.