Kenyan miners say law not conducive to investment

Monday October 22 2018

Base Titanium

Base Titanium has a strong footing in Kenya, but new mining companies will have a hard time getting licences. FILE PHOTO | NMG 

NJIRAINI MUCHIRA
By NJIRAINI MUCHIRA
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Kenyan miners have warned that potential investors in the country’s mining sector may shelve their investment plans due to provisions of the Mining Act 2016 that they say are not conducive to doing business in the country.

The miners cited the requirement for an investor to obtain consent from the communities occupying the targeted land before being licensed to explore for minerals and extract them.

Kenya Chamber of Mines chief executive Moses Njeru said that the law was seen as an inhibitor for the sector, whose contribution to GDP has remained at less than one per cent.

“The mining sector in Kenya is not attracting investors because of inherent risks and uncertainties brought about by ambiguous clauses in the Mining Act,” he said, adding that the failure of the sector to attract exploration activities means that Kenya should not expect any form of mineral discoveries and mining.

Section 38 (1) of the Act prohibits the government from issuing prospecting and mining rights on community land without the direct consent of the community, despite the Act stipulating that every mineral is the property of Kenya and is vested in the national government in trust for the people of Kenya. Miners say it has become nearly impossible for investors to get consent from communities.

Some 129 companies have presented applications for the exploration licence/permit, while another 77 have applied for the dealer’s licence/permit.

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Mr Njeru said there is a lack of critical seismic data, forcing investors to undertake their own surveys.

He further cited the requirement to compensate landowners, lack of clarity on royalty payments and fiscal regimes.

Currently, only Base Titanium has a strong footing in Kenya, having operated in the country for years mining titanium in Kwale.

East African governments have undertaken wide-ranging reforms of mining laws to ensure they become the primary beneficiaries of mineral resources even as they seek to attract foreign investors.

The sector contributes four per cent to Tanzania’s GDP, 1.2 per cent to Rwanda’s, one per cent in Kenya and 0.5 per cent in Uganda.

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