Kenya’s Mrima Hill in Kwale County is moving closer to becoming a major critical-minerals development after an Australian-led consortium advanced to the Request for Proposals (RFP) stage.
This comes as the United States steps up its interest in Kenya’s critical-minerals sector and local opposition to mining grows.
This comes as the United States steps up its interest in Kenya’s critical-minerals sector, while local groups continue to raise concerns about mining at the site.
The consortium of Australian rare-earths company RareX and mining major Iluka Resources was shortlisted by the Kenyan government after an initial expression-of-interest process.
Its detailed proposal is due in October 2026.
RareX and Iluka are proposing an integrated development in which mining and initial processing would take place in Kenya, with the project producing rare earths, niobium and potentially phosphate and manganese by-products.
The rare-earth concentrate could subsequently be processed at Iluka’s Eneabba rare-earth refinery in Western Australia.
The proposal is supported by engineering and environmental specialists including Ausenco and WSP, while RareX has also been undertaking early community engagement through Kenyan consultancy AWEMAC.
If selected, the Australian companies envisage a 75:25 RareX-Iluka special-purpose vehicle, with RareX leading development and Iluka providing downstream processing and offtake arrangements.
Iluka would have rights over rare-earth and mineral-sands products, potentially feeding its Eneabba refinery, which is being developed with Australian government-backed financing.
RareX has also secured a conditional $50 million, or roughly Sh4.7 billion, share-subscription facility from US-aligned investment firm GEM Global Yield.
The facility is contingent on the consortium securing the Mrima Hill project and is intended to support the first three years of work, including a proposed pilot plant.
The company has separately partnered with US Strategic Metals, strengthening the proposed Australian-US-Kenyan supply-chain dimension around the project.
A mineral deposit at Mrima Hill dates back decades, with government records showing that the Kenya Mines and Geological Department identified the prospect in the 1930s.
A major exploration programme with Anglo American in the 1950s involved more than 9,000 metres of test shafts and more than 3,000 metres of drilling.
The deposit subsequently attracted Canadian-linked exploration company Pacific Wildcat Resources and its Kenyan vehicle Cortec Mining.
A 2013 resource estimate remains an important reference point for understanding the scale of the deposit.
At a cut-off of 1 percent niobium oxide, the estimate identified 5.8 million tonnes of indicated material grading 1.41 percent Nb₂O₅ and 17.5 million tonnes inferred at the same grade.
For rare earth oxides, the estimate identified 48.7 million tonnes of indicated material grading 4.4 per cent total rare-earth oxides (TREO) and 110.7 million tonnes inferred at 3.61 per cent TREO.
That amounted to about 6.14 million tonnes of contained TREO across the indicated and inferred resources.
A higher-grade zone contained 11.2 million tonnes of indicated material grading 6.93 percent TREO and 15.6 million tonnes inferred at 7.12 per cent.
The mineralisation includes rare earths such as neodymium and praseodymium, alongside niobium.
Government geological mapping has also confirmed yttrium, thorium, strontium and lanthanum.
Niobium is important in high-strength steel and aerospace applications, while rare earths such as neodymium and praseodymium are used in powerful permanent magnets found in electric motors, electronics and other advanced technologies.
Although minerals on the hill have been frequently cited at $62 billion (Sh8 trillion), experts warn that the valuation should not be confused with a bankable project valuation or proven mining reserve.
“The figure represents an estimated in-ground value of the mineral resource,’’ a mineral expert who requested not to be quoted told the Star.
The project has acquired a geopolitical dimension as the US seeks alternative sources of critical minerals and attempts to reduce dependence on China-dominated supply chains.
At the US-Kenya Critical Supply Chains discussions earlier this year, American and Kenyan officials identified critical minerals as an area for deeper cooperation.
The American Chamber of Commerce said the discussions covered investment, infrastructure, policy reform and opportunities to build supply chains around Kenya's rare earths and niobium.
The issue moved into the centre of bilateral economic relations at the AmCham Business Summit in Nairobi on September 9.
The US Assistant Secretary of State for African Affairs Frank Garcia said American companies wanted to participate in Kenya's strategic-minerals sector, including processing, worker training, technology transfer and industries around the minerals.
He said Washington did not want American companies simply to extract minerals and ship them overseas, but to build processing and other industries in Kenya.
The American offer comes against a broader US policy push to secure critical-mineral supply chains.
In July, President Donald Trump directed US agencies to strengthen domestic and allied sources of critical minerals, citing the country's dependence on foreign supplies as a national-security concern.
The issue was again raised during President William Ruto's meeting with US Secretary of State Marco Rubio on the sidelines of the 81st United Nations General Assembly in New York on September 21.
The discussions included critical minerals and opportunities for US companies to participate in value addition in Kenya.
Earlier, at the G7 Summit in France in June, Ruto said Kenya and the US were nearing a critical-minerals agreement and insisted that minerals extracted in Kenya would be processed locally rather than exported in raw form.
That policy is significant because Kenya's mining law already provides for mineral royalties to be divided 70 per cent to the national government, 20 per cent to the county government and 10 per cent to the community, while large-scale mining operations are required to contribute to community development.
The economic promise, however, sits against an unusually sensitive environmental and cultural backdrop.
Mrima Hill is a protected forest reserve, a nature reserve and a sacred Kaya site associated with the Digo community.
It has also been recognised as a Key Biodiversity Area because of its coastal forest and plant diversity.
Previous mining attempts illustrate the difficulty.
Cortec obtained a special mining licence in 2013, but Kenya revoked it.
The dispute eventually went to the International Centre for Settlement of Investment Disputes, where the tribunal ruled in Kenya's favour.
In June, the Centre for Litigation and Trust went to court seeking to halt the proposed Kenya-US arrangement, arguing that Parliament, the Kwale county government and affected communities had not been adequately involved.
The case also raises questions about disclosure of the proposed agreement and environmental and benefit-sharing arrangements.
Farmers and community organisations have separately raised fears about loss of agricultural land, livelihoods, water resources and possible radioactive or toxic waste associated with mining.
Nature Kenya has warned that excavation, vegetation clearance and increased human activity have already disturbed parts of the habitat, while large-scale mining could increase forest degradation, habitat fragmentation, erosion and water pollution.
