Insecurity, policies dent mining perceptions

Money Markets

Titanium sample. Kenya was ranked 120 out of 122 in mining investment attractiveness managing to beat only Hungary, Malaysia. PHOTO | FILE 

By JOHN GACHIRI

Poor State policies and runaway insecurity have worsened Kenya’s mining sector perceptions, a new report has shown.

Fraser Institute, a Canadian-based think tank, in its latest report said the policies are making investors assign the local mining industry low ratings.

The survey carried out between August 26 and November 15, 2014, took into account government policies, attitudes toward exploration and mining to come up with three indices.

Kenya scored low on all the three categorised as the Investment Attractiveness Index, the Policy Perception Index and the Best Practices Mineral Potential Index.

The country was ranked 120 out of 122 regions on both the Investment Attractiveness and the Best Practices Mineral Potential.

“When measured under the Investment attractiveness index, Kenya was ranked 120/122 managing to beat only Hungary and Malaysia (worst).

Kenya had received a rating of 79/112 in 2013,” said the report.

On the Policy Perception Index, Kenya scored 107 out of 122 countries. Finland, Nevada (US), Manitoba, Quebec (Canada) and Wyoming (US) were the most favourably viewed regions.

“(There is) lack of transparency in mineral title process and terror threats,” said the 2014 report.

Pacific Wildcat Resources, a Canadian mining firm, is amongst firms that have run into problems with the government over licensing.

In August 2013, the Mining cabinet secretary Najib Balala revoked the licences of Cortec, its subsidiary, and other mining firms on grounds that they were issued irregularly just before the General Election.

A commission led by lawyer Mohammed Nyaoga reviewed the 253 licences issued over the period and found 175 to be valid.

Cortec has since gone to court and a ruling is expected to be made this Friday.

“The company’s advocates attended court and the hearing proceeded to completion. The judgment on the matters will be delivered on March 6th, 2015. The company will provide further details when any material matter arises from the future hearings,” Pacific Wildcat chief executive Don O’Sullivan told investors in December.

Insecurity has affected mining operations in counties such as Mandera where 36 quarry workers were killed by terrorists in December 2014.