Patrick Kanyoro is the newly-elected chairman of the Kenya Chamber of Mines (KCM). ILLUSTRATION | JOSEPH BARASA | NMG
The contribution of the mining sector to the gross domestic product (GDP) has for years stagnated at 0.7- 0.8 percent despite proven deposits of titanium in Kwale, oil in Turkana, gold in western Kenya and coal at Mui Basin in Kitui.
With the country also believed to hold significant deposits of copper, niobium, manganese and rare earth minerals, stakeholders project the sector’s contribution to the economic output could bump more than 10 times if the resources are exploited.
Patrick Kanyoro, the newly-elected chairman of the Kenya Chamber of Mines (KCM), the sector’s lobby, spoke to the Business Daily about what the government and the private sector should do to help the country realise its mining potential.
What makes you the right person for this job?
I have had chances to interact with activities in Uganda, Rwanda, Burundi, DRC and Tanzania. I have seen one critical thing that I hope to have here.
That there is a consistent and open dialogue between the private sector and the government where they realise that when one of them is winning, the other one is also winning.
That is one thing that I hope to bring here.
How do you plan to do that?
By consistently engaging the government to look for a solution together. When we have a solution as private sector, we ask the government that we may sit so that we present our proposal.
That way we can transform this sector and deliver the goods we promise by 2030.
Perhaps the immediate concern is the November 2019 moratorium on new exploration and prospecting activities. How has that impacted the sector?
The immediate impact of this is that there’s no activity going on that will lead us to have new discoveries. That is the biggest handicap now because new discoveries come from continuous exploration and prospecting.
If we are not continuously exploring and prospecting, I would say there is nothing we have found in the last three years because licences have not been issued.
What is the estimated loss to the economy?
It is difficult to say how much we have lost because we do not know who would have come through if we had the licensing going on.
However, the general trend in mining is that when you do not have exploration, then you don’t expect new projects to come in, which is a loss to the economy.
What engagements are you planning to have with the new administration to remove the moratorium?
The new administration comes in with a lot of promises. If the retreat that the President had in Nanyuki is anything to go by, we are excited. Why?
Because the President is asking people to be accountable and take that position of servant leadership, which means being answerable to those investing.
We plan to start engaging the government. We intend to do things differently. Much as we are an advocacy body, we are not just advocating our interests. There’s something greater than us members of the Chamber.
People want to contribute to the development of this country, but we must see things as a joint effort between the government and the private sector.
None would succeed without the other. Our engagements will look at a working relationship where all of us are winners because when we win, Kenya wins.
Why do you think for long there was little focus on the sector from a policy perspective?
This is a sector that is shrouded in lack of information. We have not been having a deliberate approach in sensitising the people on what this sector will do for this economy.
Minerals belong to the people of Kenya. Even if they are found on my land, they don’t belong to me unless I have mineral rights or a licence for prospecting there.
In fact, until 2013, mining was nothing in terms of government policy. But at least the last two governments have done something good because we now have a full-fledged State Department for Mining.
How has the department of mining helped transform the sector for the last 10 years?
The existence of that department has made sure that we moved from the 1940 Act to the 2016 Act.
We also have a mining policy in place. We also have a mining strategy coming up subject to public participation.
We, however, still have a lot to do in terms of creating that awareness to the citizens because the potential is huge.
What do you think is the biggest handicap in the industry?
Most of the challenges we have in this country are not because of lack of resources in terms of mineral deposits or money. It is mostly an innovation issue. How can we do things differently?
How can we work with what we have? Look at Rwanda, for example. It is a small country in size, but they have coordinated their activities in such a way that mining is taken very seriously, and is run by co-operatives and associations.
When they do this as associations and co-operatives, they may not just be doing high-value minerals, they will even do industrial minerals, meaning you can aggregate and supply big companies like Bamburi.
What can Kenya borrow from there?
We need to start looking at how to help our ASMs [artisanal miners] get into associations and co-operatives because when they do that, they will aggregate.
Financial institutions will also want to have a conversation with you because you are organised and help you access capital.
We hope we do this not only with the national government but also with the Council of Governors. It is in our interest to seek partnerships that will help them get into co-operatives.
As a lobby, how do you strike a balance between the interest of your members and the public represented by the government?
The government and the private sector, first of all, need to get to the table and declare what their interests are. Most of us from the private sector are looking for profit, but we are also aware we must look at the issues facing the people and the environment.
We also want the government to come to the table and declare, besides the regulatory role, what other interest it has.
When we come to the table and have an honest conversation, we will clearly understand the obligations and responsibilities of each party.
The bottom line is that it is not about the private sector or government, but the people.
Where do you see the sector in terms of contribution to the GDP in two to three years?
First of all, I don’t think we are doing anything below three percent [contribution to the GDP]. In another two to three years, we should be doing five percent. I have no doubt in my mind that with good investment climate that is predictable, it is possible to do 10 percent by 2030.
Our proposal is that all these marketing agencies like Keproba [Kenya Export Promotion and Branding Agency] and Kenya Investment Authority should start giving mining a mention in those delegations when they go abroad.
Why do you appear to be disputing the KNBS data on sector’s contribution to the GDP which has stagnated at 0.7 to 0.8 percent in last five years, at least?
We have questioned how they are computing our contribution to the GDP. This is because in any building, for example, everything is a mineral except wood.
So when you tell me the construction sector is growing and mining is not growing [in terms of contribution to the GDP], I have an issue with how you are computing the GDP.
The materials for building like sand, building stones, ballast and even the window panes which are silica sand are not accountable for mining and quarrying.
They are either taken into construction or manufacturing. That is important because when KNBS numbers consistently show below one percent contribution to the GDP, it means the budget will also be constrained. We are going to engage every stakeholder on this.
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