PREVIEW
The President wants another investor to process more of Lake Magadi’s minerals locally but Tata’s suspension raises doubts about regulatory certainty
President William Ruto’s expulsion of Tata Chemicals for failing to deliver on promises to create local industry fits with his promises that Kenyans will benefit from the country’s minerals. But opposition leaders say that the president’s own business interests will benefit.
Ruto accused Tata of failing to build a local glass and chemical manufacturing industry and instead exporting the natural resources. Tata has been embroiled in a protracted court battle with the county government of Kajiado over land rates and mineral royalties.
The Ministry of Mining ordered the immediate and indefinite suspension of mining activities at the company on 29 July. Tata Chemicals has appealed and the case will be heard on 6 October. Ruto is arguing for the primacy of national resources card but critics say that he has his own commercial interests at the site.
Senior officials in the Democracy for Citizens Party (DCP) led by former Deputy President Rigathi Gachagua have accused Ruto of economic sabotage. They say there are deposits of lithium worth billions of dollars around Magadi as well as oil prospects. At a rally in Kajiado in August, Gachagua accused President Ruto of having demanded a Sh3 billion bribe from Tata Chemicals. But he provided no evidence.
Tata Chemicals’ operations are based around Lake Magadi, an alkaline soda lake famous for its thick crust of white and pink trona salt, in Kajiado County, about 120 kilometres southwest of Nairobi. The company mines soda ash (sodium carbonate) to make glass, as well as soaps and detergents.
The Treasury could take a significant hit from Tata’s exit. The company had accounted for about 6% of Kenya's exports and nearly US$100 million in annual foreign exchange earnings.
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