Cabinet sets in motion process to new laws for mining sector

A new all-inclusive Bill is set to be published to guide mineral wealth exploitation and address governance and environmental issues after the Cabinet on Friday approved a mining policy to attract fresh investment to the sector.

Mining Cabinet secretary Dan Kazungu said the new Bill will address key gaps in the Mining Act of 1940, and align the sector to the latest global trends such as value-addition and use of technology to spur investor interest.

“The Mining and Minerals Policy paves way for the preparation of a new Bill that will repeal the Mining Act 306, The Diamond Protection Act Cap 310 and The Trading in Unwrought Precious Metal Cap 309 and provide a more progressive and comprehensive Mining Act,” he said.

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He added: “This policy, therefore, provides a framework with a clear guidance for sustainable mineral resource development. It brings predictability and certainty and ushers in a new dawn to attract investment in the mining sector.”

The Senate in July 2015 passed the Mining Bill 2015, which mainly focused on royalties and also granted the government a 10 per cent stake in new projects.

Kenya is banking on a planned aerial survey and new laws to help revamp the fortunes of the mining sector, which has largely remained neglected by successive governments since independence in 1963, with foreign companies being put off by poor infrastructure and an outdated legal framework.

“The policy will promote the use of appropriate technology, including geo-spatial technology and airborne geophysical surveying in order to enhance information on the country’s mineral potential and increase investment in the mining sector,” said Mr Kazungu.

The Mining ministry in September kicked off the search for an airborne survey system to map mineral wealth and spur growth in the sector. It floated a tender for an airborne Lidar system, which uses ultraviolet or infrared light to image objects, including non-metallic substances, chemical compounds and mineral rocks, among others.

At the same time, titanium has cemented its position as Kenya’s highest earning mineral, opening a wide lead over soda ash and gold.
Official data shows that Kenya exported titanium worth Sh9.4 billion last year, up from Sh8.8 billion in 2014, representing a seven per cent growth.

Titanium, which is mined by Australian firm Base Resources in the coastal county of Kwale, is used as an alloy with other metals to produce lightweight metals for jet engines.

The Kenyan Government earns royalties from the mineral whose extraction started in October 2013.

Titanium in 2014 dislodged soda ash from the pole position of Kenya’s highest mineral earner and has now extended the lead.

Revenue from soda ash maintained its slide for the third year in a row, recording less than Sh6.2 billion last year compared to Sh7.8 billion in 2014 and Sh8.8 billion a year earlier, the Kenya National Bureau of Statistics (KNBS) data shows.

Gold has lost its lustre with a sharp fall in sales for the precious metal that was top on the list in 2012.

The KNBS data for top 12 export items did not indicate the earnings from gold last year but its revenues slumped to Sh695.3 million in 2014 from Sh7.4 billion a year earlier and Sh13.9 billion in 2012, hurt by low global prices that discouraged miners.