Balala stops issuance of mining licences


Mining secretary Najib Balala: There should be transparency. FILE

The government Thursday put a moratorium on mining licences, pending the enactment of a new law to deter holding of mining and exploration permits for speculation.

Mining secretary Najib Balala made the announcement day as industry insiders revealed the building up of a storm over recent decisions taken by top officials in the ministry.

“I have stopped issuance of any mining licences to allow for proper review to ensure transparency in handling these issues,” Mr Balala reported on micro-blogging site twitter on Thursday.

On Monday, the Business Daily quoted a restricted International Monetary Fund report questioning transparency in the oil and mineral agreements which are yet to be presented to Parliament or for public scrutiny.

The Fund indicated it had been unable to access the agreements, calling for more transparency in mining deals as huge reserves of minerals and oil are discovered in Kenya.

“Over 500 mining and exploration licences are floating around, only about 20 of these are active, the rest are used for speculation,” the ministry disclosed on Thursday after a meeting with stakeholders in Nairobi.

Kenya is transiting from the archaic Mining Act first crafted in 1940 to the Mining Bill 2013, a revision of another Bill that was yet to be approved by the 10th Parliament.

Confusion has arisen following announcement by Mr Balala that the government was set to repeal the 35 per cent local ownership of mining concerns stipulation that is yet to be degazetted — even as the licensing of Cortec Kenya for mining niobium was announced.

(Read: Foreign investors win battle for control of mining firms)

Cortec officials and other miners have received the news with much jubilation but going forward, there could be a dilemma over whether their licence should be subjected to the 10 per cent government ownership of the proposed law or the regime existing during the licensing.

The firm has been granted conditional approval awaiting fulfilment of conditions including settling with landowners in Kwale County.

Cortec has announced the presence of minerals, including rare earths valued at Sh5.4 trillion, at the site where land issues akin to those dogging the Base Titanium minefield are expected.