Tata Chemicals sets up high-level committee to decide on Kenya operations

Tata Chemicals on Wednesday announced that a high-level technical committee will be set up with the Kenyan government to review regulatory issues concerning its subsidiary Tata Chemicals Magadi Limited (TCML), as the company seeks to resolve a dispute that had earlier led authorities to order the suspension of its operations.

The committee, to be jointly led by Kenya's Principal Secretary for Mining and TCML's chief executive officer, will conduct a detailed technical review of the issues raised by the Ministry of Mining, Blue Economy and Maritime Affairs and submit a report to the office of the Cabinet Secretary for further consideration and direction.

Following the announcement, shares of Tata Chemicals Ltd. were trading at Rs 604.70 per scrip as at 10:33 on BSE on Wednesday, after a marginal dip of Rs -2.65 (-0.44%).


The latest development follows a meeting between the Cabinet Secretary and TCML executives on September 8, which Tata Chemicals described as a “fruitful engagement” on the matters raised by the ministry.

Also read: Tata Chemicals issues statement after Kenya govt orders suspension of operations

The proposed committee will also work towards establishing a sustainable framework for responsible mining, value addition, community development and mutually beneficial partnerships.

The development comes amid a regulatory row between the Kenyan government and TCML, the company's Kenyan subsidiary, which operates the Magadi soda ash business.

In an earlier exchange filing, Tata Chemicals said TCML had submitted all the required information, reports and documentation to the Kenyan government on August 11 and was fully compliant with applicable regulatory requirements. The company was awaiting the ministry's review of its submissions and further directions.

The dispute escalated after Kenya President William Ruto said he had ordered Tata Chemicals to stop its operations in the country, arguing that the company's presence had failed to adequately benefit Kenya. Ruto had also said the government planned to bring in two companies to take over the operations.

In late July, Kenyan government had ordered TCML to suspend operations at the Magadi Soda factory and halted exports of soda ash.

Tata Chemicals acquired the Magadi plant in 2005 and has said the business remains an integral part of its operations. The company had earlier said it respected the authority of the Kenyan government and remained committed to resolving the outstanding matters through constructive engagement and appropriate legal and regulatory channels.