Mineral dealers want state to deal with brokers 'sabotaging' Voi gem centre

Mineral dealers in Taita Taveta have asked the government to intervene and break cartels believed to be out to sabotage the newly opened gemstone value addition and market centre in Voi.

They said the country is at risk of losing billions of shillings in revenue as cartels continue aiding mineral smugglers, who evade paying taxes.

The dealers want Mining, Blue Economy and Maritime Affairs CS Salim Mvurya to call for fresh election of dealers’ representatives at the gem centre committee.

“Those proposed to the committee are just brokers holding dealer’s licences. They are the same people accommodating foreigners who smuggle uncut stones without paying taxes,” said Javan Mghendi, a mineral dealer in Voi.

He told journalists on Saturday that only four out of 21 registered dealers in the county were utilising the facility.

Mghendi said majority of the dealers have turned into brokers and were aiding tax evasion.

The cartels, he said, have been pinpointed for selling gemstones to brokers and middlemen, thus making the market unstable.

“These dealers-cum-brokers do not want to trade at the gem centre because they are aiding illegal trade. Their licences should also be revoked if they do not follow the law,” Mghendi said.

He said the cartel enjoys protection from some politicians and powerful government officials and their dealings are hurting the mineral business.

Mghendi said the country is losing revenue due to smuggling of uncut gemstones by middlemen, who mostly export to Middle East countries without paying taxes.

Taita Taveta is endowed with precious stones ranging from Tsavorite, ruby, chrome tourmaline, yellow tourmaline, red garnets, green garnets and Tanzanite.

Others are manganese, iron ore, marble and limestone.

“It is shocking that the cartels are making millions of shillings through smuggling of minerals, yet they are left to infiltrate the industry. Some local leaders are enjoying the proceeds,” the mineral exporter said.

A senior official at the gem centre, who sought anonymity, said disagreements between dealers risk derailing plans to make the facility a centralised mineral market.

The Sh60 million gemology centre was opened by President William Ruto in October last year to maximise the country's mining potential.

It is the only facility in Kenya where value addition of minerals is to take place before miners sell their products.

The government targets to generate Sh3 billion annually as revenue from value-addition on gemstones set for export, according to a report by the National Development Implementation and Technical Committee.

Mining accounts for less than one per cent of Kenya's GDP, according to the Kenya National Chamber of Commerce and Industry.

President Ruto said his administration is targeting to increase the sector's contribution to the national GDP from the current one per cent to 10 per cent.