The Kenyan government has formally assured residents of Kakamega County that they will receive direct financial and developmental benefits from a confirmed gold deposit valued at approximately Ksh.683 billion ($5.28 billion). The announcement, reiterated by Government Spokesperson Dr. Isaac Mwaura on Monday, 17 November 2025, aims to quell local concerns and set a precedent for resource governance as the country prepares for its first major underground gold mining operation.

The discovery is located in the Isulu-Bushiangala area of Ikolomani Constituency, a region with a history of artisanal mining dating back to the 1930s gold rush. The project is being spearheaded by Shanta Gold Kenya Limited, a subsidiary of the London-listed British firm Shanta Gold. According to an Environmental Impact Assessment (EIA) report submitted to the National Environment Management Authority (NEMA), the site holds an estimated 1.27 million ounces of high-grade gold.

Revenue Sharing and Community Development

To ensure equitable distribution of the proceeds, officials have detailed a multi-layered benefit structure rooted in the Mining Act of 2016. Mining Cabinet Secretary Ali Hassan Joho confirmed in a media interview on Thursday, 13 November 2025, that the revenue-sharing framework is designed to be transparent. The primary mechanism is a royalty system, where the national government will receive 70% of the royalty payments, Kakamega County will get 20%, and 10% will be allocated directly to the local community where the mining occurs.

In addition to the royalty share, Shanta Gold is legally mandated to contribute 1% of its annual gross sales directly to community development projects. These funds will be managed by a 14-member Community Development Agreement (CDA) committee, which will prioritize local needs such as building roads, schools, health facilities, and water systems. The CDA framework is a key provision of the 2016 Mining Act, designed to formalize community benefits beyond corporate social responsibility and prevent conflicts that have plagued extractive industries elsewhere.

Project Scope and Economic Impact

Shanta Gold plans to invest between Ksh.22 billion and Ksh.27 billion ($170 million to $208 million) to develop the underground mine and a processing plant. The company will employ a modern technique called Long Hole Open Stoping, designed to minimize surface disturbance. The operation will also include a 1,500-tonne-per-day processing plant and a 12-megawatt power station.

The project is expected to be a significant economic driver for Western Kenya, a region historically dependent on agriculture. Projections indicate the mine will create hundreds of direct and indirect jobs during its construction and operational phases. The government also anticipates substantial revenue through a 3% royalty on gross sales and a 5% export levy. CS Joho explained that a foreign firm with technical expertise was necessary because the gold deposits are located over a kilometer underground, requiring specialized technology and significant capital investment beyond local capacity.

Addressing Community and Environmental Concerns

The large-scale project is not without challenges. The proposed mine will cover approximately 337 acres of mostly private land, requiring the resettlement of an estimated 800 households. Government officials have assured affected families that land acquisition will follow a transparent legal process, offering fair compensation or relocation to one of six designated resettlement sites.

Environmental protection is another critical concern, particularly the mine's proximity to the Kakamega Forest and its location within the Yala and Isiukhu river catchments, which flow into Lake Victoria. The EIA report acknowledges these risks and outlines mitigation measures, including robust water monitoring, dust control, and safe handling of chemicals like cyanide, in line with international standards. The history of artisanal mining in Ikolomani has been linked to negative socio-economic impacts, including environmental degradation and health issues, underscoring the need for stringent oversight of the new industrial operation.

As Kenya stands on the cusp of becoming a significant gold producer, the government's ability to enforce its own laws and deliver on its promises to the people of Kakamega will be a critical test. The successful and equitable management of this Ksh.683 billion resource could provide a new economic lifeline for the region and a positive model for the continent, while failure could entrench historical patterns of resource exploitation with limited local benefit.