President William Ruto’s administration lifted a December 2019 blanket moratorium in October last year, re-opening issuance of licences and permits for prospecting and mining.
The Mining ministry has disclosed that less than 10 percent of 1,162 companies, whose bids had been evaluated, have been granted mining rights. Principal Secretary for Mining Elijah Mwangi spoke to Business Daily on reforms they are undertaking to unlock Kenya’s mineral wealth conservatively estimated to be more than $6.6 billion (Sh851.4 billion).
What explains the small number of applicants who passed the test under new licensing regime?
We are very keen on quality of applications we award for prospecting or mining. We don’t want speculators in our cadastre [online portal for applying for mining permits and licences]. These are people who have mining rights, but are not working. Also going forward, for those who have mining or prospecting licences, it is our responsibility — and we have directed our inspectorate of mines— to ensure that the conditions provided in the Act and licences are adhered to. These include requirement to start work within six months and ensure they adhere to programme of work which they provided during licensing. If we find that you have not been following it, we either penalise you or seize the money that you had indicated you will invest as provided in the Act.
There are complaints you are taking far too long to process applications.
The quality of the applications that we receive has affected the timeline that it takes for an application to be awarded. We have people who are not attaching all supportive documents and that means a process which should have taken a shorter time, will take longer. This is because you’ll be notified and given more time to amend and bring those additional documentations. That is pushing the number of days because when it comes back, it has to be evaluated again to confirm whether the information that had not been provided is in order. We had a five-year backlog, and on average, we receive 30 to 50 applications monthly.
Kenya is perceived to be a transit hub for mineral smugglers in the region?
Kenya is a signatory to ICGLR [International Conference on the Great Lakes Region] and one of its key mandate is to contain mineral smuggling, including introduction of certificate of origin for the minerals. We also have a responsibility as a country to ensure that the minerals that are mined in the country benefit the people of Kenya and the communities where the mining happens. We have seconded officers to border points to ensure that minerals designated for exports have been certified. We have officers at KPA [Kenya Ports Authority in Mombasa], JKIA [Jomo Kenyatta International Airport] and all other border points. That has minimised smuggling of minerals which is an economic crime.
Does Kenya largely lose out on royalty from minerals?
We have a significant number of miners who are not paying royalty. We have hired inspectors of mines [to deal with] those doing quarries or mining of limestones, gemstones, manganese and everything else. We have engaged the miners, assessed their records and written demanding the royalty that has not been paid. It has not gone well with majority who feel they are not supposed to pay retrogressively. But to us, any royalty that was not paid is due.
What are you doing to ensure these minerals are not exported raw?
We have a policy on mineral processing value addition. It means, therefore, that going forward, we would wish the minerals are processed within the country to an extent of the technology that we have right here. We have four value addition centres that are ongoing. We have revived fluorspar mining in Elgeyo Marakwet, gold refining in Ikolomani (Kakamega), granite processing plant in Vihiga and gemstone centre in Voi where we have procured the latest equipment such that going forward our gemstones can be value-added before export.
The bulk of mining in Kenya is done by artisanal miners with little or no regard to law and safety measures because they operate in informal settings. What are you doing to restore order? Artisanal miners are defined in law as those using rudimentary tools. Essentially, we have more than one million artisanal miners carrying out mining of different minerals from gemstones to gold, manganese, those in the quarries and even in some of strategic minerals like graphite. After they were decriminalised following the Cabinet resolution last October, we took the initiative of putting them into marketing co-operatives. Our target is that within five years, we would have formalised over 400 co-operatives in different value chains. Today, we have formalised 228 co-operatives; each with varied memberships. Some have 1,000 people, others 200 and so forth.
Yet these artisanal miners continue to be exploited and are poor.
Our intention in forming the co-operatives is to ensure artisanals improve their livelihoods. There have been cases whereby brokers come, fund artisanals who end up working as slaves for them because they have been advanced some money. So whatever they produce they use to pay this debt which take long to clear. Moving forward, we want to see to it that they have markets across the sectors and then bring in buyers who will base prices on known benchmarks on global markets.
What role are the County artisanal committees playing?
The [Mining] Act requires that the permits be issued by artisanal mining committees. The chair is nominated by the governor whereas members are largely drawn from relevant government agencies. We have 32 artisanal mining committees in 32 counties. For the balance of the counties, we are waiting for the governors to second to us a name to be chairman. Some of them feel there’s no mining in their counties, but I can assure you in all the 47 counties, there’s mining including Nairobi.
How do you respond to industry stakeholders who feel that the operating environment is getting tougher?
We are committed to ensure we meet all the stakeholders. Anybody who has a concern about our regulations and the way we are handling the licences, we are very much open and there to explain to them. We are committed to walk this journey together because our responsibility is to support those in mining. But more key to us is to ensure that the minerals that belong to the people of Kenya, in which we are trustees, do not go to waste.
