Cortec Mining Kenya has lodged a $2-billion lawsuit against the government of Kenya for cancelling its licence for a niobium and rare-earth metals mining project.

Cortec lodged the lawsuit at the International Centre for Settlement of Investment Disputes following a two-year standoff with President Uhuru Kenyatta’s government.

The company is jointly owned by the UK’s Cortec and Stirling Capital, and argues that the $2-billion is compensation for the investment it made at the Mrima Hills niobium project,in Kwale.

Cortec UK and Stirling are wholly owned by Pacific Wildcat Resources, a Canadian company listed on the TSX.
“The revocation of a special mining licence was a breach of the prohibition against unlawful expropriation set out in international law,” argues the company in the case filed at the US-based tribunal.

The special mining licence was awarded in 2008 for 21 years. In 2013, however, Kenya’s Mining Cabinet Secretary, Najib Balala, revoked the licence on the grounds that it was issued fraudulently. The licences of 41 other companies were also cancelled.

Cortec Mining sued Balala after the revocation but, after two years of vicious legal battles, the High Court upheld Balala’s decision earlier this year, forcing the company to seek a remedy at the international tribunal. The company has since appealed the High Court ruling.
According to documents filed at the tribunal, Cortec argues the Kenya government has refused to wait for the ruling of the Court of Appeal and has already announced plans to undertake development on the project site.
“The conduct of the State strongly indicates that, even if Cortec is successful in its appeal, the court decision will not be . . . implemented or the State will prevent its implementation,” states the company.

Exploration undertaken by Cortec at the Mrima Hill project indicates the presence of massive rare earths and niobium deposits valued at about $62.4-billion.