Sh8tr treasure: Inside US-China scramble for Mrima Hill

Deep within the coastal red earth of Mrima Hill, a strange twist of nature has turned a quiet corner of Kwale County into the most contested piece of land in the global economy.

Under the sacred forests of the Mijikenda people lies what experts call a “once-in-a-generation” deposit of two valuable mineral groups.

They are niobium and rare earth elements. These are the essential raw materials behind modern technology. The site is valued at more than $60 billion, holding 5.8 million tonnes of niobium and 48.7 million tonnes of rare earth material.

The estimated value of the minerals beneath Mrima Hill is Sh8.1 trillion, a figure so mind-numbing it challenges the very scale of Kenya’s national budget. 

This single deposit is worth nearly double the country’s entire Sh4.6 trillion budget for the 2025/26 financial year. 

Its value is so immense that it could pay off more than 70 per cent of Kenya’s total public debt of roughly Sh11.5 trillion. 

To put it in the context of President William Ruto’s most ambitious plans, the wealth of Mrima Hill dwarfs the Sh5 trillion he aims to raise through the new National Infrastructure Fund for transformative projects like high-capacity dams and thousands of kilometres of new highways and roads.

The sheer scale of the resource becomes even clearer when measured against specific government projects and services. 

The deposit is worth more than ten times the Sh720 billion allocated to the entire Ministry of Education, which is already the largest share of the national budget. It is worth nearly 60 times the Sh138 billion budget for the Ministry of Health. 

To visualise this in terms of physical infrastructure, the value locked beneath Mrima Hill is roughly 15 times the Sh549 billion budgeted for the long-awaited extension of the Standard Gauge Railway from Naivasha to the Ugandan border.

Ultimately, the Sh8.1 trillion figure represents a number that is almost incomprehensible within Kenya’s current fiscal reality. 

It would be enough to pay for the entire national budget for more than 18 months. It could cover the combined annual budgets of the Ministries of Education and Health for over a decade, all while still having enough left over to build the SGR extension more than a dozen times.

Without niobium, the special turbines inside jet engines would fall apart at high speeds. Without rare earths, the smartphones in three billion pockets would stop working.

Because these minerals are found in known amounts almost exclusively in a narrow belt stretching from Kenya to the Democratic Republic of Congo, Mrima Hill has become the frontline of a 21st‑century contest for power. And now a new US government has ignited what local diplomats call a “critical minerals race war.” 

At the centre of the dispute is a Kenyan law that requires 60 per cent local ownership for small‑scale mining projects and imposes several local ownership rules for large ones. The US Office of the United States Trade Representative (USTR) now labels these policies as an “unfair” barrier to American business.

The dispute is captured in the recently published US 2026 National Trade Estimate (NTE) Report on Foreign Trade Barriers, reviewed by Financial Standard.

It signals a sharp shift in Washington’s strategy. As the United States tries to reduce its defence and technology dependence on China, which currently controls 80 per cent of global rare earth processing, it increasingly sees the resource nationalism of its African allies as a strategic threat.

In the report, the USTR specifically targets Kenya’s Mining Act. It notes that “US firms face a disadvantage when competing against State‑backed entities that do not adhere to market‑based principles.” 

The US argues that local equity rules “limit the ability of foreign investors to maintain control over their investments and protect proprietary technology.” For Nairobi, however, the mandate is a vital shield against what it calls “extractive colonialism.” 

Mining Cabinet Secretary Hassan Joho, who recently moved to end “opaque” licensing deals, insists that open, competitive bidding is the only way to ensure Kenyans are not denied fair returns.

“We are moving away from the era of secret deals to ensure the wealth buried in our soil benefits the domestic economy,” a ministry official noted.

Washington’s language has become unusually blunt. By classifying Kenya’s domestic equity rules as “illegal” trade barriers, the US is signalling that the era of polite mineral diplomacy is over.

“The United States is not just looking for minerals; they are looking for the regulatory power to extract them on Western terms,” said a mining expert.

“It is a fresh scramble for the treasures of Mrima Hill.”

The NTE report singles out local‑content requirements across several African mining countries, arguing they block US investment and technology transfer. 

In Kenya’s case, the Mining Act imposes multiple layers of local participation that Washington finds particularly troubling.

For large‑scale mining operations, the category into which any commercial development of Mrima Hill would fall, the State automatically receives a 10 per cent free stake in the project without paying anything. 

Beyond that, the law requires an additional 35 per cent local ownership of the mining licence holder. 

The government also demands that at least 20 per cent of the licence holder’s shares be listed on the Nairobi Securities Exchange within three years of starting production.

For smaller operations, the restrictions are even tighter. The Mining Act reserves small‑scale mining permits for Kenyan citizens and for companies with at least 60 per cent Kenyan ownership.

The report warns that such requirements “limit the ability of foreign investors to maintain control over their investments and protect proprietary technology,” a particularly sensitive issue in the rare earth sector, where processing methods are closely guarded trade secrets.

The minerals at stake help explain Washington’s urgency. Niobium strengthens steel for jet engines, oil pipelines, and space equipment, assets the US military considers “non‑negotiable.” 

Rare earths like yttrium, lanthanum, and neodymium are essential for the magnets in electric vehicle batteries and the guidance systems of missiles.

In March 2026, Kenya officially launched a competitive tender for Mrima Hill, inviting global companies to bid for the right to mine the deposit. “In exercise of the powers conferred by sections 14 (1) and 223 (2) (e) of the Mining Act … the Government of Kenya is inviting expressions of interest (EOI) from suitably qualified mining operators to commercialise the Mrima Hill mineral deposits,” the gazette notice stated.

If Washington succeeds in pressing Kenya to relax its local‑equity rules, the impact on Kenya’s mining sector, and on the Mrima Hill tender specifically, could be far‑reaching.

First, foreign mining companies would be able to own a majority or even full stake in Kenyan mining projects without being forced to sell shares to local partners or the public. That would give US firms greater control over operations, pricing, and technology.

Second, it would eliminate the requirement to list shares on the Nairobi Securities Exchange, potentially reducing local capital market activity. Third, it would remove the mandatory 10 per cent free stake for the Kenyan government, cutting state revenues from mining projects.

For Kenya, such changes would mean less local ownership, fewer requirements to hire local workers or buy local supplies, and less technology transfer. The government would also lose its automatic equity share in strategic mines.

Kenyan officials insist that local participation rules are non‑negotiable. 

“The wealth buried in our soil must benefit Kenyans first,” the senior mining ministry official said, speaking on condition of anonymity. But US officials argue that without greater flexibility, American capital will stay away, leaving the “chokehold” on these strategic minerals firmly in the hands of rivals.

The tension comes at a delicate moment. In January, Kenya hosted the US-Kenya Critical Supply Chains Conference, where US Deputy Secretary of State Christopher Landau met President William Ruto to discuss “reliable” supply chains.

“Successful international partnerships are built on transparency, mutual benefit and fairness,” Landau said during the conference.

While the US offers what it calls high‑standard partnerships, China, which has spent years building diplomatic capital in Nairobi, is leveraging its established manufacturing base to attract Kenyan producers. 

The competition is already playing out on the ground. In late 2025, community guards at Mrima Hill reportedly turned away Chinese nationals trying to access the site without permits. 

Meanwhile, a US‑backed consortium, Mrima Earth Ltd, recently submitted a “value‑added” bid promising to process the minerals inside Kenya, led by experts who previously managed the Mountain Pass rare earth project in California.

Beyond the geopolitical chess match, the project faces a profound local obstacle. Mrima Hill is a “double‑gazetted” site. It is both a protected national forest reserve and a sacred Kaya forest for the Mijikenda and Digo coastal communities.

Residents have raised alarms over the potential destruction of sacred shrines and the risk of radioactive waste, a common byproduct of rare earth mining. 

The Mijikenda elders have vowed to protect the spiritual integrity of the hill, even as the Ministry of Mining opens the multi‑billion‑dollar tender to global bidders.

As the race to control the future of flight and artificial intelligence hardware accelerates, the bedrock of the US-Kenya relationship is being tested by the very minerals meant to power the next century.