African Barrick Gold (ABG), Tanzania’s largest gold producing company today agreed to buy Kenyan gold assets worth USD20 million from the Aviva Corporation. The move is pending approval from the Competition Authority of Kenya (CAK) which will help the government decide just how much the country can earn from the new transaction.

In a speech to the British Business Association of Kenya, Australian High Commissioner Geoff Tooth, noted that mining would likely replace coffee as Kenya’s 4^th largest sector in terms of export value. He said that partnering with mining and oil drilling companies could earn the government USD275 million in taxes and royalties within the next two years.

Aviva, an Australian development company began mining for gold in Western Kenya in 2010 when the Kenya Commission of Mines and Geology granted them a 51% interest in Special Licenses. The company had previously discovered rich mineral deposits in some parts of the province and decided to partner with AfriOre Ltd, a Canadian-based mining company, to kick off the project. The mining industry generated KES 22 billion in the year 2010 and  has so far created 6000 jobs for Kenyans.

Aviva now intends to sell all of its Kenyan gold and base metal assets to ABG following a binding sale and purchase agreement between the two companies. The company’s CEO, Lindsay Reed, said, “We believe this is a very good deal for shareholders. Aviva has spent approximately USD8 million and looks set to generate a substantial return on its investment in less than two years.” Despite the change in ownership, ABG will still hold the same 51% interest which includes mining blocks located in Ndori and Siaya. The transaction will be completed by September this year.