- Kenya has undertaken a comprehensive audit of all mineral rights holders, revoking over 1,500 mining licenses.
- The cleanup forms part of ongoing reforms to grow the contribution of Kenya’s mining sector to the GDP.
- Kenya wants to grow the mining sector’s contribution to its GDP to at least 10 per cent by 2030 from the current less than one per cent.
The Kenyan government has revoked 1,546 licenses in the mining sector as it gradually resumes licensing, marking the end of nearly four years of a standing moratorium. Principal Secretary Elijah Mwangi, from the State Department for Mining, confirmed that the ministry has undertaken a thorough audit of all mineral rights holders to identify non-compliant rights.
This is part of the ongoing reforms that Kenya is implementing, as it aims to increase the mining sector’s contribution to the Gross Domestic Product (GDP). Kenya remains determined to elevate the sector’s contribution to a minimum of 10 per cent by 2030, a significant increase from the current contribution of less than one per cent.
The moratorium on mining licenses in Kenya
According to Mining and Blue Economy Cabinet Secretary Salim Mvurya, the revoked licenses were found to be non-compliant with the licensing conditions. Three thousand illegal mining operations also received stop orders to help address the issue.
“The Ministry has profiled illegal miners and mineral dealers, closing all their operations,” CS Mvurya said, adding that “enforcement has been beefed up through the Regional Mining Offices.”
Mr Mvurya’s Ministry is setting up an enforcement team to fight the vice in collaboration with other government agencies.
Lifting the moratorium
Investors eyeing Kenya’s mining sector have reason to be optimistic as the 2019 trade moratorium has been lifted. This move will bring positive outcomes for both local communities living in mining areas and the government, which anticipates increased royalties, tax revenues, and job opportunities for residents.
Formerly implemented under President Uhuru Kenyatta in 2019, the moratorium effectively halted the issuance of prospecting and mining licenses. But as Mvurya highlights, the ministry has lifted the suspension for all construction and industrial minerals, classifying all remaining minerals as strategic minerals.
“Strategic mineral mining rights shall be processed on a case-by-case basis as per the Mining (Strategic Minerals) Regulations, 2017,” Mr Mvurya said in a statement issued on October 4, following a Cabinet meeting.
The government lifted the moratorium following the conclusion of a National Wide Airborne Geophysical Survey (NAGS) and the production of a preliminary report, which identified 970 mineral occurrences across the country.
The ministry is undertaking ground truthing and confirmatory field work to validate the identified mineral deposits’ existence, quality, and quantity across Kenya. This work spans 16 counties out of Kenya’s total 47.
The state department has implemented measures to establish and operate an online mining corporation to enhance transparency in mineral rights issuance. “This enhances accountability and openness in awarding licenses and permits,” Mr Mvurya added.
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Mineral processing and value addition
The ministry has initiated plans to promote in-country mineral processing and value addition. This strategy is informed by recognising the substantial benefits of exporting finished products.
It also highlights that Kenya, like many African countries, is missing out on maximising the gains from mining. Across Kenya and Africa, foreign investors continue to extract and export minerals without adding value. Over the years, African multinationals exported raw materials such as oil, gas, gold, lithium, cobalt, diamonds, copper, and farm produce.
There is a strong emphasis on cobalt, manganese, and lithium as the world transitions to electric vehicles (EVs). Kenya has introduced a Mineral Value Addition and Processing Policy to support this effort. The mining ministry has assessed every region for its potential for value addition based on the abundance of specific minerals.
Some of the value-addition centres include the Kakamega Gold Refinery, the Granite Processing Plant in neighbouring Vihiga County, and the revival of the Fluorspar factory in Elgeyo Marakwet.
Read also: The future of Kenya’s mining industry
Artisanal mining in Kenya
The ministry remains actively committed to supporting artisanal mining in Kenya. It acknowledges artisanal miners’ crucial role in poverty reduction and socio-economic development.
The ministry has prioritised formalising artisanal miners into marketing cooperatives as part of this commitment. An artisanal miner, often working independently by hand, is a subsistence miner who a mining company does not officially employ.
The Ministry of Mining has formalised more than 200 artisanal groups, pending the issuance of mining permits by artisanal mining committees. These committees are based at the county and regional levels.
“The State Department has delineated zones for artisanal mining and is currently sensitising artisanal miners and communities living in mining areas. It is building capacity for artisanal miners to enhance sustainable mining operations and promote effective participation in the value chain,” the ministry said.
The government remains committed to curbing the exploitation of artisanal miners by intermediaries. Thus, the State Department has collaborated with county governments to establish mineral trading centres. These centres provide a platform where both buyers and sellers can engage in commodity trade overseen by government officials.
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Mining royalties
Section 183 of the Mining Act 2016 stipulates that mineral rights holders must pay royalties to the state. This is based on the various mineral classes extracted through these rights.
The national government receives the majority share, at 70 per cent of the royalties allocation. This amount usually goes to the country’s Consolidated Fund. The National Treasury deposits the remaining 30 per cent into a County Mineral Royalties Account for distribution among the eligible beneficiaries. This includes communities residing in areas where mining takes place. They have a 10 per cent share entitlement.
CS Mvurya stated that the State Department has finalised sharing royalties with the counties through the national treasury. “A framework for sharing 10 per cent royalties to the communities has been developed and subjected to public participation. The regulations are expected to be concluded in the current financial year,” he said.
Other reforms include
Meanwhile, all applicants with pending applications must update their records regarding company ownership. Players must share bank statements, tax compliance certificates, and work programs to get permits.
Additionally, all mineral transporters must acquire a mineral road transport permit from the regional mining offices. The respective officers must oversee the loading of minerals.
Furthermore, the regional mining officers will be responsible for sealing mineral containers. A mine inspector must witness the opening of these containers. “The State Department shall have officers at all ports of entry and exit to authenticate mineral consignments,” the ministry said.
At the same time, the State Department of Mining has upgraded the mineral testing laboratory. Moreover, the mining department equipped the laboratory with modern testing equipment to ensure the generation of credible results.
In addition, the government has established a memorandum of understanding (MOU) through a government-to-government arrangement with Indonesia. The deal will enhance the capacity of laboratory officers to implement best practices in mineral testing.
Kenya has also initiated the decentralisation of mineral testing by introducing laboratory services at regional offices. This will alleviate the burden on miners and stakeholders who previously had to transport samples to Nairobi for testing.
Read also: Africa Pushush to end tPainful Eraera Raw Mineral Exportsrts
