Companies that have landed deals to explore and extract Kenya’s minerals are projected to pump more than Sh100 billion into the economy during the life of their contracts, the Mining ministry has said.
Kenya has issued mining and prospecting licences to 95 large-scale firms nearly a year, after it lifted a December 2019 blanket ban on new applications pending reforms, including mapping and streamlining of the licensing processes.
Analysis of work programmes presented by the successful miners and prospectors has revealed an estimated investment inflow of Sh132 billion, since the licensing process re-opened late last year, according to Principal Secretary for Mining Elijah Mwangi.
“We have awarded licences cumulatively to investments around Sh132 billion. The majority of them want to do industrial and construction minerals. But there are few who are engaged in titanium and other strategic minerals,” Mr Mwangi said.
Investors attach work programmes as part of the licensing process, revealing a “detailed plan for the duration for which the licence or permit is sought and outline the details of the activities and expenditure commitments for each year of the term of the licence or permit”, according to the Mining Act 2016.
The partial lifting of the ban, following approval by the Cabinet in early October 2023, re-opened the door for investors to resume prospecting on all construction and industrial minerals such as limestone, gypsum and diatomite.
Prospecting and exploration of strategic minerals such as uranium and cobalt will, however, be approved on a case-by-case basis guided by Mining (Strategic Minerals) Regulations, 2017.
The State Department for Mining subsequently gave miners and prospectors of minerals seeking new or renewal of licences and permits until November 30, 2023, to submit updated documents on registration, owners, and funding sources.
Mr Mwangi did not disclose the firms which have been awarded licences and the specific investments they are expected to undertake over the years.
He said: “We have not concluded on evaluation and awarding of the applications. We expect that the investments will be higher. We don’t want to name them [successful miners], but if you add, it comes to that [investment value].”
The 95 successful applicants formed a measly 8.18 percent of 1,162 firms whose bids had been evaluated by mid-September, with the majority of prospective firms locked out for lacking supportive documents, including tax and environmental compliance certificates.
The Mining Act 2016 requires that successful bidders for mining rights start work within six months after the award, failure to which they risk forfeiting the funds they had indicated in their proposals to the State.
“Our compliance and inspectorate team will be very much alive because we have facilitated them, and hired 76 more inspectors of mines. We have procured 18 vehicles for inspectors of mines to move around to ensure that anybody with a mining licence is working according to conditions of the licence,” Mr Mwangi said.
“These include a requirement to start work within six months and ensure they adhere to programme of work which they provided during licensing. If we find that you have not been following it, we either penalise you or seize the money that you had indicated you would invest as provided in the Act.”
Though mining activity has been present in the country for more than 50 years, productivity has remained low, with large-scale operations limited to soda ash, mineral sands, and from 2013 Titanium ores in Kwale County.
The country is also believed to hold significant deposits of copper, coltan, niobium, manganese, and rare earth minerals which largely remain under-exploited, dwarfing the mining sector’s contribution to the national economic output.
