Kenya has rejected more than 90 percent of applications for mining and prospecting licences and permits since process was re-opened about a year ago, the Mining Ministry has said, pointing at increased speculative bids.
The State Department of Mining said that of the 1,161 applications evaluated, only 95 met the requisite financial, technical, and environmental conditions set out in the law.
Some 656 applications or 56.5 percent, of the total 1,161 processed were rejected after documentation on company registration, ownership, and proof of funding, as well as tax and environmental compliance, fell short of the conditions, Principal Secretary Elijah Mwangi said.
Another batch of 364 applications, nearly a third (31.4 percent) of the total, were revoked after failing to submit some of the 14-documentation required.
Some 46 applications are, however, under review after the firms were asked to provide additional information to facilitate the approval process.
“The major reason for the significant rejections is incomplete applications. You will find those making the applications are not providing all the information required. We may say they are just speculators trying their luck through the applications,” Mr Mwangi told the Business Daily in an interview.
“That means if, by any chance they qualify and get the licence, they do not have the technical and financial] capacity to carry out mining or prospecting activity. So, they hold onto the licence and go out there seeking out somebody to buy the licence”.
The issuance of mining rights permits and licences resumed after the William Ruto administration lifted a blanket December 2019 moratorium in October last year.
The partial lifting of the ban, following approval by the Cabinet, 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 Mining department 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 sources of funding.
This was aimed at helping evaluate and subsequently award mining and prospecting licences and permits after a nearly four-year lull which followed the blanket ban imposed by the predecessor regime of Uhuru Kenyatta to “clean up the mess” in the industry, including the transition of the application process to an online portal.
The miners and prospectors, through the Kenya Chamber of Mines, had mid-August complained of lengthy and unpredictable licensing for locking out investments running into billions of shillings.
“The issuance of licences and permits remains a pain point for the industry because there is complete unpredictability. For example, we feel the issuance of dealership licences is a simple process that does not warrant more than 14 days, but sometimes it takes up to three or six months,” Patrick Kanyoro, the Chamber’s chairman, said.
“The current architecture of the licensing regime is skewed to constrict the issuance of licenses, other than to facilitate business.”
The Mining Act 2016 stipulates that approval of mining licences be processed within 90 days from application date, while the issuance of permits should take 60 days.
The period can, however, be extended if the application is incomplete and authorities ask for additional information or supportive documents.
The Mining ministry admitted there have been delays in processing some of the applications, blaming incomplete documents amidst a backlog that had accumulated during the freeze on licensing.
“The quality of the applications that we receive has affected the timeline that it takes for an application to be awarded. So, a process which should have taken a shorter time will take longer because it means you will be notified and given more to amend and bring those additional documentations,” Mr Mwango said.
“Secondly, the Mineral Rights Board is not full-time and meets in line with the requirement of SRC [Salaries and Remuneration Commission] which is a maximum of two meetings a month. Some of them are government employees and some are businesspeople, so they are not always available.”
Although mining activity has been present in the country for over 50 years, productivity has remained low, with a scale of operations limited to soda ash, mineral sands, and from 2013 Titanium ores in Kwale which have now been depleted.
Kenya is, however, believed to hold deposits of other minerals such as copper, niobium, gold, manganese, and rare earth minerals which largely remain under-exploited, dwarfing the mining sector’s contribution to the national economic output.