An oil rig. Kenya has drafted a new law to attract investors to the mining sector while protecting community interests. Photo/FILE
What you need to know:
The Bill creates an 11-member Minerals Advisory Board that would be advising the government on dealing with mining companies. It also empowers the commissioner of mines and geology to decide on disputes arising from mining.
Mr Mwakwere said the government planned to spend Sh15 million in an aero-magnetic survey that would establish the mining potential in the country.
The survey would take three years.
Kenya has drafted a new law to attract investors to the mining sector while protecting community interests.
Mining department officials said the proposed law aims to avoid a repeat of past delays in exploitation of confirmed mineral deposits caused by resistance from local communities.
The Mining and Minerals Bill aims to increase earnings from an industry that is notorious for opaque dealings by assuring local communities in mining areas of five per cent royalties and the county another 15 per cent.
The rest would accrue to the central government.
“The framework will address conflict resolution, compulsory acquisition, compensation and revenue sharing,” said Environment and Mineral Resources minister Chirau Ali Mwakwere during a meeting with the Kenya Chamber of Mines last week.
The draft law would govern exploration, prospecting, mining, licensing, buying and selling of minerals.
It would also repeal the fragmented pieces of legislation governing the sector such as the Mining Act of 1940, Trading in Unwrought and Precious Metals Act of 1933, Diamond Industry Protection Act of 1949 and Gold Mines Development Loans Act of 1952.
The increased impetus to streamline and regulate the mining industry is informed by the recent oil find in Turkana County. The Bill, however, leaves the regulation of oil exploration to the Petroleum Act.
“With devolution on the way, mining should be well regulated since it has brought conflicts in many parts of the world,” said the Kenya Human Rights Commission in a statement calling for the speedy enactment of guidelines for the mining trade.
In December, Chinese firm Fenxi Mining Group was granted a coal mining concession for the Kitui coal fields worth Sh290.5 million ($3.5 million)
“Where more than one county or community is involved in sharing of royalties, the royalties will be shared accordingly. Every community benefiting from royalties must annually submit a proposed programme with budget outline,” reads the Third Schedule of the draft statute.
Among the minerals found in Kenya are significant quantities of soda ash around Lake Magadi, fluorspar in Kerio Valley as well as titanium in Kwale, Malindi and Lamu. There is reasonable potential for gold in Kakamega and Vihiga; coal in Mwingi and Kitui and iron ore in parts of Taita, Meru, Kitui and Kilifi. Niobium has also been found in Kwale and parts of Nyanza.
Data from the Department of Mines and Geology shows that total earnings from mineral production grew 58 per cent to Sh14.8 billion in 2010 from Sh9.4 billion a year earlier, buoyed by high prices in the international market.
The Mining and Minerals Bill is being drafted even as the Community Land Bill waits to be enacted. The Bill seeks to safeguard community interests during exploitation of natural resources because most mining activities are carried out on communal land.
“The necessary legal framework, aligned to the National Land Policy and the new Constitution, should expeditiously be put in place to cushion Turkana County and its residents from possible loss of compensation and benefits,” said Ibrahim Mwathane, the chairman of the Land Development and Governance Institute.
Mr Mwakwere said he hoped to have the Mining and Minerals Bill enacted by Parliament by June after a draft National Minerals and Mining Policy is approved by the Cabinet. The policy largely promotes value-addition and employment creation in the sector unlike now when most minerals are exported raw.
The Bill creates an 11-member Minerals Advisory Board that would be advising the government on dealing with mining companies. It also empowers the commissioner of mines and geology to decide on disputes arising from mining.
Mr Mwakwere said the government planned to spend Sh15 million in an aero-magnetic survey that would establish the mining potential in the country. The survey would take three years but Mr Mwakwere said funding had not been secured.
Kenya is the only country in the region that is yet to undertake a recent assessment of its mineral wealth potential, after Tanzania and Uganda carried out their aero-magnetic surveys between 1975-1978 and 2005-2008 respectively. [email protected]
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