Tata Chemicals warns of 500 job losses as legal battle over Magadi mine shutdown intensifies

"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,"reads court papers 

Tata Chemicals Magadi Limited has warned that hundreds of jobs and a major investment project are at risk as a legal dispute over the suspension of its mining operations deepens.

The company has opposed an application by the Kajiado County government to halt court proceedings challenging the shutdown, saying a delay in resolving the dispute would prolong its inability to operate and meet contractual obligations.

The soda ash producer said the suspension threatens a business built over nearly a century and could force it to declare about 500 direct employees redundant.

“The applicant will continue to be unable to meet its contractual obligations, thereby exposing it to significant and potentially irreparable losses,” read court papers

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, with Tata Chemicals arguing that the move was made without adequate notice or adherence to fair administrative procedures.

"The suspension was imposed for an independent indefinite period without prescribing objective timelines ,measurebale compliance criteria or any transparent mechanisms for lifting the suspension thereby leaving the applicants operations entirely at the discretion of the respondent," claims the company 

The company has also warned that the shutdown could derail its planned Sh3.62 billion expansion project, adding to the financial consequences of an interruption to its mining activities.

It argues that leaving the suspension in place while the legal proceedings are put on hold would effectively leave the company at the mercy of the ministry, without certainty on when it can resume business.

The company is resisting the county government's bid to participate in the judicial review proceedings, arguing that the financial and land-related disputes cited by the devolved unit are separate from the question of whether the ministry acted lawfully when it ordered the shutdown.

Similarly the company argued that county's concerns over the expiry of the company's lease, land tenure, royalties and other financial claims were already the subject of separate cases.

The company maintains that the judicial review proceedings should be confined to examining the legality of the suspension rather than being used to resolve unrelated disputes.

Kajiado County is seeking to join the case, arguing that the outcome could directly affect its financial interests and the welfare of communities living around the mining operations

The county says it has been pursuing outstanding land rates amounting to Sh11.4 billion as of February 2023 and had attempted to enforce payment by withholding various business and trading licences.

The resulting dispute led Tata Chemicals to seek court intervention, while separate proceedings over the land rates remain pending before the Court of Appeal.

The county argues that its interest extends beyond revenue collection to environmental protection and the economic interests of residents affected by the company's activities.

 Meanwhile the  Ministry of Mining maintains that the shutdown 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.