Hope for mining sector as state mulls lifting licence freeze
CS Mvurya says ministry putting in place online cadaster before permits issuance.
•The latest development gives hope to companies such as Base Titanium which is keen to explore and possible expand its operations in Kenya.
•The freeze on issuance of licenses was put in place in November 2019 to pave way for the mapping of the country's minerals.
by MARTIN MWITA Business Writer
Mining, Blue Economy and Maritime Affairs CS Salim Mvurya addresses journalists during the unveiling of the Mineral Royalty Committee in Nairobi on January 17. The Committee is tasked with advising on how communities will benefit from the 10 per cent royalties allocation/WINNIE WANJIKU
Kenya could lift the ban on issuance of prospecting and mining licenses by June, Cabinet Secretary Salim Mvurya has hinted.
This is however subject to the completion of the geophysical data compilation from the countrywide mineral deposits mapping (survey) done in 2021, the Mining, Blue Economy and Maritime Affairs CS said.
The freeze was instituted in November 2019 to pave way for the survey aimed at establishing the types of minerals and geographical location aimed at helping the government make informed mining decisions.
Kenya has also not renewed existing licenses since 2015 when at least 65 companies had their permits revoked.
Those operational have been running under a gazette notice, with licensees whose permits expire forced to seek special clearance from the ministry.
Yesterday, CS Mvurya said the data compilation process is at an advanced stage, with an initial report on geophysical data and survey ready.
The ministry, he said is also putting in place an online cadaster before it begins issuing licenses.
This is normally an official register showing details of ownership, boundaries, and value of real property or minerals in a region.
"We are working on our online cadaster so that all applications for licenses can be done online, and in the next 60 days, we should be able to launch it," Mvurya said.
The ministry is also upgrading its a laboratory at Madini House, Industrial Area.
"As you realise, we have quite a number of issues to deal with before we lift the moratorium but the first thing is we have to organise our data…once we have all these basic pillars completed, then we should be able to lift the moratorium," said Mvurya.
This means the earliest investors could be allowed to apply for licenses is mid-March or later in April, which will then set room for the lifting of the ban.
Mvurya spoke in Nairobi when he unveiled a 15-member multi-agency team tasked with establishing how communities will benefit from minerals within their regions.
The Mineral Royalty Committee is expected to address grey areas in the sharing of the 10 per cent mining proceeds to local communities.
The Mining Act 2016 provides for a royalty-sharing framework for national government (70%), county government (20%) and local communities 10 per cent.
While there is clarity on what goes to the national government, the Act has not had a clear framework for counties and the community shares.
The multi-agency team, which was formed last year, has noted the 20 per cent to host county government does not require any framework or change of legislation.
The Attorney General has also advised that the 20 per cent to counties is within the Public Finance Management Act.
"What the committee will do now is to make sure they give us regulations on the 10 per cent to local communities," Mvurya said.
The team has representation from National Treasury, Council of Governors, AG's office, Industrialisation ministry, Commission on Revenue Allocation among other agencies.
It has up to March to complete its task to pave way for implementation.
The latest development gives hope to companies such as Base Titanium which is keen to explore and possible expand its operations in Kenya.
Base which commenced mining titanium ores in the country in 2013, with the first shipment in February 2014, is keen to further expand its operations having applied for three prospecting licenses.
These are for Ramisi area in Msambweni, Kuranzi area near the Kwale-Taita Taveta Counties border and Lamu.
It's last prospecting licence was on an area covering 136 square kilometres in Vanga area, towards the Kenya-Tanzania border of Lunga Lunga, which was approved by the Mineral Rights Board and issued in December 2018.
It current mine-life ends in 2024, which is pegged on a 'deed of variation' from the former Ministry of Petroleum and Mining, which cleared the company to extend its Special Mining Lease boundary at the current site.
Base accounts for 65 per cent of Kenya's mineral exports.
Last year, the country's total value of minerals produced increased by 33 per cent from Sh22.7 billion in 2020, to Sh30.2 billion.
"This is attributed to a 31.5 per cent increase in the value of the titanium ore minerals from Sh19.5 billion to Sh25.6 billion in 2021, " Kenya National Bureau of Statistics says in its Economic Survey 2022.
The minerals played a role as the country's total value of export earnings improved from Sh643.7 billion in 2020 to Sh743.7 billion in 2021, translating to a 15.5 per cent increase.
Base Titanium pegs hope on new government in expansion bid
It is seeking prospecting licenses for Kwale and Lamu region.
Mining ministry failed to collect prospecting fees, says auditor
Gathungu accuses the institution of not remitting revenues to the exchequer.
Base Titanium secures permit to extend mine life to 2024
Operations were expected to cease in 2023, which was also an extension from October this year.
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