- In Kenya, mining yields high-grade quantities of gold, copper, ilmenite and tantalum.
- Kenya is an important source of non-metallic minerals including soda ash, limestone, salt, niobium, fluorspar and fossil fuels.
- Titanium ores have for the last decade remained top mineral forex earner for Kenya.
A plan to give Kenya’s mining sector a makeover is underway, with policymakers banking on reforms that can attract investors as the country seeks to grow the revenue base.
The move comes four years since the 2019 government moratorium on the issuance of new prospecting and mining licenses. At the time, the government had not renewed licenses since 2015 when about 65 companies saw their permits revoked.
Those in operation run under a gazette notice. For companies whose permits expire, they are forced to seek special clearance from the ministry. The freeze on issuance of new licenses was to allow for geospatial surveys to map out the country’s mineral potential.
This allowed the establishing of the types of minerals and their geographical location which according to the government, it will help in making informed mining decisions including availing information to potential investors.
The Mining, Blue Economy and Maritime Affairs Ministry is putting in place an online cadaster before it begins issuing licenses, according to the Cabinet Secretary Salim Mvurya.
This is normally an official register showing details of ownership, boundaries, and value of real property or minerals in a region.
Kenya’s mining sector reforms
With the survey having been completed, the government is now banking on the information among other reforms in the sector to attract investors. CS Mvurya noted that reforms being undertaken by the Ministry will catapult Kenya into a desirable mining investment landscape and attract the best mining interests.
Among the reforms include the conclusion of the National Airborne Geophysical and generation of a preliminary report identifying over 970 mineral occurrences across the country.
This has initiated the process of ground trothing in prioritised 16 counties with critical and strategic minerals and the development of an in house, in-country mineral licensing system.
Under the system, there will be an online mining cadastral integrated with national institutions such as Kenya Revenue Authority (KRA), e-Citizen, Business Registration Services among others.
The CS made the revelation when he appeared before the Senate to respond to questions raised by senators concerning the operations of his Ministry.
Isiolo senator Fatuma Dullo wanted to know the rationale behind the decision by the government to impose the moratorium on the issuance of mineral mining rights in the country.
Senator Dullo further asked the CS to explain the benefits that have accrued from the imposition of the moratorium and the plans by the government to have the moratorium lifted in view of the negative impact it has had on the economy.
Nominated senator Veronica Maina on the other hand wanted the CS to provide information on the state of infrastructure the government has put in place to facilitate the exploration of ocean renewable energy. There were also questions on initiatives the ministry has taken to enhance the exploration of offshore gas and oil.
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Mining reforms to drive investor magnetism
CS Mvurya told the House that placing the moratorium in 2019 was on the advice of the National Security Council (NSC). “The rationale was to safeguard Kenya’s interests by developing the right data. The measure was also informed by the goal of eliminating speculation on the availability of substantial deposits,” the minister said.
He added that the moratorium was also meant to allow government to complete the mapping of mineral resource without an influx of speculative mining license applications, that would have posed a threat to the industry.
The CS told the House that development of an in-house and in-country licensing system will allow the government broader control of all mineral rights and ensure timely issuance of mineral rights as stipulated in the Mining Act.
“We have instituted a comprehensive audit of all mineral rights and weeded out all illegal licenses, inactive, expired, idle and speculative hoarding to free up areas for serious investment and concessions,” the CS told Senators.
The Ministry, CS Mvurya said, is positive the reforms it is currently undertaking will leapfrog Kenya into a desirable mining investment landscape.
Artisanal mining in Kenya
According to the Cabinet Secretary, there are over 800, 000 artisanal and small scale miners and dependents in the country. These miners still play a big role in poverty eradication and socio-economic development. As a result, the government has identified formalization and capacity building of the players as a key priority under the Bottom-Up Economic Transformation Approach, which was President William Ruto election promise.
The Ministry has formed Artisanal Miners’ Cooperatives from over 420 Community Based Organisation and other groups in readiness for issuance of mining permits. About 140,000 people are directly engaged in artisanal and small-scale mining activities. About 800,000 people depend on artisanal mining for a living.
Exploitation by middlemen
The ministry is yet to fully address challenges in artisanal mining. For instance, the formation of Artisanal Mining Committees that was set for April is yet to happen. Also pending is the mapping and delineation of land in line with the Mining Act 2016.
This is according to the “Performance Audit Report on Monitoring of Artisanal Mining Operations,” by the Auditor-General Nancy Gathungu.
The Ministry had not developed sufficient measures to monitor artisanal mining operations in the country. As a result, middlemen were exploiting the sector leading to the loss of revenues by the government.
Whereas artisanal mining generates income for low-income groups, poor health, safety and environmental concerns keep shrouding the segment. Every so often, fatal accidents in gold and gemstone sites, and the use of mercury in gold mining come up.
The Mining Act 2016, and its applicable regulations provide for the formalization and regulation of artisanal mining. This measure aims at mainstreaming and monitoring the sub-sector better.
“The Ministry is carrying out mapping of illegal mining areas, profiling activities and is liaising with other governmental agencies to curb illegal mining operations and restore order,” CS Mvurya said.
The mining sector is regarded as one of the key pillars of economic growth. Its contribution to GDP is expected to hit 10 per cent by 2030 from the current under five per cent.
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Mining in Kenya
Kenya is not in the levels of the Democratic Republic of Congo and Tanzania in terms of mineral deposits. However, it is equally endowed with minerals capable of supplementing its GDP.
Only DRC appears in the top 10 list of richest mineral-producing countries in Africa. South Africa, Nigeria, Algeria, Angola, and Libya produce over two-thirds of Africa’s mineral wealth.
In Kenya, mining yields high-grade quantities of gold, copper, ilmenite and tantalum. The country is also an important source of non-metallic minerals including soda ash, limestone, salt, niobium, fluorspar and fossil fuels.
However, Titanium has for the last decade remained top earner for Kenya, accounting for 65 per cent of mineral exports.
The western and Nyanza regions of the country have substantial gold deposits. Unfortunately, little investment has been made to drive large scale production. With this, artisanal miners continue to be major players in Kenya’s gold trade, with little impact on the economy.
The Economic Survey 2023 indicates Kenya’s mining sector recorded a strong performance last year. Mining posted growth amid the country’s economic slowdown to 4.8 per cent, compared to 7.6 per cent in 2021.
Read also: The future of Kenya’s mining industry
Earnings from minerals
Total earnings from mineral production increased by 16.6 per cent to $249.5 million (Ksh35.2 billion) in 2022. While key sectors such as agriculture performed dismally, pegged on poor rainfall, mining was among the strongest industries.
“Production of most of the minerals increased except that of carbon dioxide, which decreased from 21,100 tonnes in 2021 to 18,2000 tonnes in 2022,” Kenya National Bureau of Statistics (KNBS) said in May update.
The value of titanium ore minerals (Ilmenite, Rutile and Zircon) increased to $200.5 million in 2022 from $181.4 million in 2021. Earnings from gold more than doubled to $24.1 million up from $9.9 million in 2022. The value of Soda Ash produced increased from $12.8 million to $14.1 million.
Other key minerals were crushed refined soda ($4.7 million), rough gemstones ($2.9 million) and cut gemstone ($1.3 million). The country realized about $977.3 million (Ksh137.9 billion) from mining activities in the last four years.
Titanium ores powering Kenya’s mining sector
Australian company Base Titanium has been instrumental in driving mineral earnings for the country. The company commenced mining titanium ores in Kenya in 2013, with the first shipment in February 2014. However, the current mine-life ends in 2024.
Its main operations are in Coastal region of Kwale and a port facility in Likoni, Mombasa, for export.
China has been Base Titanium’s main export market, with the government earnings royalties based on contracts entered with the firm.
Base Titanium is keen to expand its operations in Kenya, having applied for three prospecting licenses. Initially, the company had indicated it would stop mining in Kenya by December this year.
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