Mining sector hit by licensing delays, regulatory gaps

Industry players have called on President Ruto to intervene.

In Summary

•The Kenya Chamber of Mines has decried “bureaucracy” in the ministry, which it says is hurting both large scale players and artisanal miners across the country.

•Kenya National Bureau of Statistics data shows the mining and quarrying sector recorded a 6.5% contraction in 2023 compared to a 9.3 per cent growth in 2022.

Women at a gold mining sites in Nyatike/
FEUD: Women at a gold mining sites in Nyatike/
Image: /FILE

Mining sector players have decried discrimination in the issuance of permits and an unfriendly regulatory framework, which is derailing investments in the multi-billion industry.

Despite the lifting of a four-year moratorium on licensing, in October last year, investors in the sector are facing challenges in getting the necessary approvals from the ministry, amid what they term discrimination in the issuance of permits.

The Kenya Chamber of Mines (KCM) has since called on President William Ruto to intervene and address “bureaucracy” in the ministry, which is hurting both large scale players and artisanal miners across the country.

According to the chamber, which represents the interests of artisanal, small, medium and large miners, explorers, prospectors, dealers, processors, service providers and professionals in Kenya, the sector’s performance has been dropping on the back of reduced activities by investors.

This is evidenced by the Kenya National Bureau of Statistics (KNBS) data, which shows the mining and quarrying sector recorded a 6.5 per cent contraction (-6.5) in 2023 with continued poor performance this year, compared to a 9.3 per cent growth in 2022.

“The contraction in mining and quarrying was reflected in decline in production of most minerals such as titanium, soda ash and gemstone,” KNBS notes in its latest economic performance update.

Artisanal miners lack a business friendly regulatory framework to operate, the lobby said.

This reflects an earlier report by Auditor General Nancy Gathungu, which indicated the ministry has not developed sufficient measures to monitor artisanal mining operations in the country, amid exploitation by middlemen and missed revenues by government.

The Performance Audit Report on Monitoring of Artisanal Mining Operations, revealed the critical process of formation and operationalising Artisanal Mining Committees, mapping and delineation of land were yet to be finalised, about six years since the enactment of the Mining Act 2016.

“The desperation has permeated the sector in a manner never witnessed before; business is now at a standstill and the impact is evident across villages in Taita Taveta, Turkana, Migori, Makueni, Kitui, West Pokot, Kakamega, Vihiga, Kwale, Tana River, Baringo, Samburu, Marsabit, Wajir, Mandera and indeed across the nation,” KCM chairman, Patrick Kanyoro, said.

Australian company Base Titanium, the current biggest exporter of minerals in Kenya, is among major players that are seeking approvals to prospect in Lamu and Tana River regions, with eight pending applications.

“Despite announcement that the moratorium on issuance of mining rights for all construction and industrial minerals was lifted, including for heavy mineral sands, no prospecting licences have been issued,” the firm said in its latest quarterly investor briefing, for the quarter ended March 2024.

The anguish cuts across the sector, KCM said, which it says portends a risk to stakeholders, whom are also grappling with a high cost of doing business.

“Those entrusted to steward the sector to new heights seem to be oblivious to their mandate; the haphazard decision making has sunk the sector to levels never witnessed in the history of Kenya's mining sector,” Kanyoro said.

While the Kenya Kwanza administration decriminalised artisanal and small scale mining (ASM) in October 2023, with a plan to empower and bring them onboard the mainstream mining sector, there has been lack of policies to actualize the plan.

“Your Excellency, the issue of movement permits for minerals being applied in a discriminatory manner has elicited hopelessness in a sector that is just emerging from the effects of a moratorium, that was aggravated by Covid-19 and the Ukraine war,” Kanyoro said.

Processing of permits and licenses has also been slow, hence expensive for investors in the sector.

“We are through with the first half of the year and applications for various categories of permits and licenses are still pending. The fact that a miner has to leave his village to visit the Cabinet or Permanent Secretary's office in Nairobi to collect a license in this digital era speaks volumes,” Kanyoro asserted.

He called for a fair, ethical, professional and legal process at the State Department for Mining and the ministry.

Mining, Blue Economy and Maritime Affairs Salim Mvurya has however maintained that reforms being put in place by the government will turn around the sector.

These include an online cadaster and sector safeguards, which came after a successful mapping of the country’s minerals.

A cadaster is normally an official register showing details of ownership, boundaries, and value of real property or minerals in a region.

According to Mvurya, the online cadaster allows applications for licenses to be done online.

“The Ministry is very positive the reforms it is undertaking will catapult Kenya into a desirable mining investment landscape and attract the best in mining,” Mvurya told Senate during a recent appearance, to respond to questions concerning the operations of his ministry.

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