Buying a mining company in Kenya means buying its licences, its land position, its community relationships and its liabilities , some of which will not appear in the accounts. Diligence is where a sensible price is set or a deal is declined. The price agreed is only as good as the position behind it. This note sets out the main red flags to check.
What should you check on the mineral right?
Start with the cadastre. The Mining Cadastre Registry shows whether the licence exists, who holds it, its area and its status. Confirm that conditions and reporting obligations have been met, that work commitments are current, and that any transfer or change of control will receive the consents the Mining Act 2016 requires. The Act itself can be read on Kenya Law.
Which commercial red flags recur?
- Land access resting on informal arrangements rather than documented rights.
- Community commitments made verbally and never recorded in an agreement.
- Environmental audits outstanding, or closure obligations unfunded.
- Production sold outside lawful channels, creating exposure for the buyer.
- Litigation or regulatory notices omitted from the disclosure bundle.
How do you test the community and environmental position?
Read the Community Development Agreements, the minutes of community meetings and any grievance records, then compare what was promised with what has been delivered. Environmental files , assessment licences, audit reports and authority correspondence , should be complete and consistent with what is happening on the ground. Interviews with community representatives, conducted respectfully, reveal what the files do not.
What about tax and corporate compliance?
Confirm tax compliance with the Kenya Revenue Authority, payroll and safety records under the Occupational Safety and Health Act, and the corporate records of every company in the chain. Where the target holds dealer or other licences, verify each one individually rather than accepting the bundle at face value. Unrecorded liabilities tend to surface in the first year of ownership, when the warranties are already being tested.
Diligence findings should translate into the agreement , warranties, conditions and price adjustments , rather than a report that is filed and forgotten. Our mining law practice leads mining due diligence, and our governance and advisory team reviews the compliance picture across the target group.
For guidance on your specific situation, contact CS Advocates LLP , call, WhatsApp, or book a confidential consultation at our Westlands, Nairobi office.