Mining Cabinet Secretary Dan Kazungu. Kenya estimates that the mining
sector has potential to contribute about 10 per cent to national
revenues annually but currently only contributes a paltry one per cent.
PHOTO FILE | NATION
A new controversy over licensing has hit Kenya’s mining sector,
threatening efforts to transform the industry into a major economic
contributor.
Mining Cabinet Secretary Dan Kazungu is
yet to inaugurate the board mandated to offer advice regarding issuance
of licences and permits.
President Uhuru Kenyatta had
appointed Abel Chumba chairman of the Mineral Rights Board, but failure
by the CS to inaugurate the board has left the renewal and issuance of
new licences in limbo.
Mining companies operating in
Kenya have not had their licences renewed since 2015 and are operating
under a gazette notice, making it hard for them to source funding for
exploration or even make long-term commitments.
Failure
by the CS to inaugurate the board is attributed to internal wrangling
at the ministry and opposition to Mr Chumba’s appointment. Until his
elevation, Mr Chumba was a senior inspector of mines in the ministry.
Lost opportunity
So far, 129 companies have applied for exploration licences/permits to the Department of Mines while another 77 have applied for a dealers’ licence/permit.
So far, 129 companies have applied for exploration licences/permits to the Department of Mines while another 77 have applied for a dealers’ licence/permit.
But
the Department cannot process or issue any licences because the Mining
Act, 2016, confers most of those the powers on the Cabinet Secretary,
based on the board’s written advice.
On this, Mr
Kazungu could not be reached, while Principal Secretary Dr Ibrahim
Mohamed said only the CS declined to comment on the issue.
The
board, which comprises nine members including the Treasury PS, has the
responsibility to bring sanity in the issuance of licenses to facilitate
development of the industry.
According
to Section 31 of the Mining Act, the board’s core mandate is to advise
the Cabinet Secretary on issues relating to granting, rejection,
retention, renewal, suspension and revocation of licences.
“The
Cabinet Secretary, on the recommendation of the Mineral Rights Board,
may grant, deny or revoke a mineral right,” says the Act, which came
into law last year in May.
Under
the Act, investors in the mining sector can be granted licences and
permits for large scale operations including reconnaissance,
prospecting, retention or mining licences or small-scale operations that
include prospecting or grant of a mining permit.
The
Act stops the trend of licensing speculators and imposes tough
conditions for any investor eyeing opportunities in the sector.
According
to Kenya Chamber of Mines chief executive officer Moses Njeru, it is
ironic that Kenya has a licensing stand-off even as government tries to
grow the sector.
“Failure
to issue investors with licences is making Kenya lose many
opportunities. This is why this sector is not growing,” he told The EastAfrican.
He
added that with the mining sector in Tanzania in upheaval following a
ban on exports of unprocessed minerals, Kenya is losing an opportunity
to place hers on a growth trajectory.
In March,
Tanzania banned raw mineral exports to enforce value addition in
accordance to the Mineral Policy of 2009 and Mining Act of 2010. The ban
has resulted in massive losses, a freeze in jobs by mining companies
and a fall in new investments.
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