A Kenyan court has ordered a pause on activities on land earmarked for Nigerian billionaire Aliko Dangote's planned $16 billion oil refinery in Lamu, after 133 local residents challenged the project. The dispute comes just days before the planned groundbreaking of what is expected to become one of East Africa's biggest energy projects. The case was brought by Salim Tima Swale and 132 other residents of Chandavai in Lamu County, who are challenging the use of the disputed land for the proposed refinery.
The residents argue that the land earmarked for the refinery is ancestral land on which members of the community have lived and carried out farming and other activities for generations. According to reports on the court case, the residents say the disputed area contains homes, farms, mosques, shrines and family graves. They are challenging the project on several grounds, including alleged failure to properly consult affected residents, compensate people whose property could be affected and provide adequate plans for resettlement.
The residents also raised environmental concerns and argued that the necessary environmental assessment processes had not been properly completed before activities connected to the project began. The legal challenge has created uncertainty around activities at the refinery site, but it has not stopped Dangote from pushing ahead with the planned launch. Dangote Group said on Tuesday that the court ruling would not prevent the planned groundbreaking ceremony, although it acknowledged that the order could affect some activities at the site.
The groundbreaking is scheduled for September 30, with Kenyan President William Ruto expected to attend alongside Dangote. Kenyan officials have also indicated that the ceremony will proceed despite the court dispute. The proposed refinery is planned for Lamu County, on Kenya's coast, and is expected to have a refining capacity of 700,000 barrels of crude oil per day. That would make the planned facility slightly larger in capacity than Dangote's existing refinery in Lagos.
The Kenyan project is expected to supply refined petroleum products to Kenya and other markets in East Africa, potentially reducing the region's reliance on imported refined fuel. Reuters has reported that Dangote sees the project as a major expansion of its refining business beyond Nigeria. The project has been valued at around $16 billion, with Kenyan reports putting the investment at roughly 2 trillion Kenyan shillings.
For Dangote, the project represents a major step outside Nigeria after the construction of his giant refinery in Lagos. However, the Lamu project also faces challenges beyond the current land dispute. Reuters has previously reported questions surrounding issues including crude-oil supply, financing and infrastructure, given the enormous volume of crude the proposed refinery would require.
The court's latest order therefore places a temporary legal constraint on activities concerning the disputed land, while Dangote maintains that the broader project and its planned groundbreaking remain on track. The next major development in the dispute is expected when the matter returns to court on October 14. The court has ordered parties to maintain the existing status quo on the contested property while the legal dispute is considered.
Key points
- A Kenyan court has halted activities on land earmarked for Dangote's $16bn Lamu refinery due to concerns from 133 local residents.
- The residents are challenging the project citing ancestral land and compensation concerns, as well as alleged failure to properly consult affected residents and provide adequate plans for resettlement.
- Despite the court order, Dangote Group says the planned groundbreaking ceremony for the refinery will proceed as scheduled on September 30.
