How Kenya can unlock economic potential in mining

Mining is a growing economic sector whose full potential is yet to be realised. It is a sector that can add significant value to other economic sectors like industrialisation, while delivering many jobs and associated enterprises. When linked with the wider national economic policies and strategies, mining can multiply its value and GDP contribution.

In fact we do have a mining success story amongst us which is an indication that excellence and critical mass in mining can indeed be achieved. In the past ten years we have witnessed Kwale Base Titanium mining enterprise walk the long pioneering and often frustrating journey to eventually become what appears to be a modern-day mining best practice with visible and quantifiable socio-economic benefits for this country. What we now need is to successfully create similar mining projects across the country.

From past observations it takes three parties, fully playing their roles in sync, to achieve mining sector success – the government, investors, and the stakeholder communities. The three players have to systematically undertake their defined roles while minimising situations which can create opportunity-wasting conflicts.

The principal role of the government is to create and maintain an economic and political environment, with investment and fiscal policies that are sufficiently attractive to investors. With the legal and institutional framework already in place, the mining authorities have continued to build critical capacity to drive a vibrant mining industry. However, for effectiveness, the budgetary funding for the mining department has to be sufficient enough to reflect the socio-economic potential in mining.

It is important that the government urgently undertakes geological mapping of what minerals lie where and as much as possible to quantify the estimated reserves. Such surveys will provide critical information for marketing Kenya’s minerals potential to investors, while reducing risks and time for investment decision-making. What is certain is that many investors are quite ready to put their dollars into mining projects that are sufficiently de-risked with documented data.

The hosts communities on their part have to be proactive and as much as possible avoid situations of conflicts and disruptions. No matter what the laws say, the local communities who have always lived on the acreage above the minerals have rights and their concerns and fears may be genuine. As such, the community issues should be handled with utmost respect and prudence to avoid unnecessary conflicts. It is also well known that communities can be vulnerable to political and activist influences that may not always be balanced or sufficiently informed.

The mining department has to proactively take leadership in investor/community conflict resolutions by having in place effective community relations capacity to align investor and community aspirations with a view to minimising conflicts. Investors on their own may not have the political or official tools to manage evolving community/investor conflicts.

Last week I attended a forum for National Dialogue on Coal organised by an inter-faith partnership (Kenya Conference of Catholic Bishops and National Council of Churches of Kenya) together with Haki Madini Kenya. The forum objective was to find stakeholder common ground to progress development of Mui Basin coal deposits in Kitui County. The forum was attended by very senior officials from the mining department.

At the forum I witnessed a situation of community mistrust that may have contributed to many years of project development inaction. The mistrust is based on misinformation and factual inaccuracies, either deliberate or un-intentional. For instance, ordinarily mined coal does not cause cancer or impotency as was alleged by a section of the communities.

Further, Kitui coal is a very different subject from the planned Lamu coal power plant. The Kitui coal need not necessarily go into power generation as it has other ready industrial uses. For example the coal can be used to kiln the Mutomo limestone (in Kitui) to make cement, while also staging its potential to replace imported coal for the current and future steel industries.

Where relevant, mining and industrialisation should be twined in policies that target national and regional economic development. Successful industrialization anywhere in the world has mostly been associated with successful minerals supply chains.