Why dealers are stuck with 42,000 tons of minerals
One of the raw precious stones of tsavorite found in Taita Taveta County on display at Voi Gemstone Marketing Centre in this photo taken on September 6, 2024.
Dealers in precious metals are stuck with a stockpile of more than 42,310 metric tonnes worth millions of shillings after President Wiliam Ruto’s administration classified 14 minerals strategic, transferring the authority to explore, mine and deal to the State.
An industry inventory, submitted to the State Department for Mining, shows copper accounts for the bulk of the stock followed by chromite and beryllium.
The Kenya Chamber of Mines, a lobby for industry players, reckon that the government has ignored pleas to delay implementation of the freeze for six months to December.
Copper accounts for more than 94 percent, or 39,720 tonnes, of the stockpile, according to the list contained in a letter to the Principal Secretary for Mining Elijah Mwangi.
“People have made commercial and business decisions based on an existing licence within an existing legal framework. People have obligations to banks, to landowners where they are mining and to their customers where they had signed supply agreements,” Patrick Kanyoro, the Chamber’s chairman, said.
“But then came a new development that makes it look like it is a matter of switching the light on and off.”
The regulations place the responsibility to explore and deal in strategic minerals or deposits in the hands of National Mining Corporation (Namico) which may do so on its own or through a partnership with a company which has required technical and financial capacity.
The decision to classify some minerals as strategic to the country was part of the conditions Dr Ruto’s Cabinet set for lifting a blanket December 2019 moratorium on issuance of prospecting, mining and dealing in minerals.
The lifting of the ban opened the way for issuance of permits and licences for 56 industrial and construction minerals.
But there are restrictions for prospecting and extraction of strategic minerals with approvals being done on a case-by-case basis guided by Mining (Strategic Minerals) Regulations, 2017.
The inventory shows Beta Metal, which has operations in Migori and Kitui, has the biggest stockpile of 14,000 tonnes of copper, followed by Reliques Africa Ltd (12,000 tonnes of copper from Migori and Kisii), while Highsisal Investments and Madini Logistics, both based in Migori, have 5,000 tonnes of copper each.
Others are Nairobi-based Washoe Mining Corporation (2,000 tonnes of copper), Intermines and Mineral Ltd of Taita Taveta (500 tonnes) and Amuca Company of Nairobi (220 tonnes of copper).
The report also lists Amuca as also having 2,200 tonnes of chromite and 390 tonnes of beryllium, while Dabel A.M. Coop of Moyale has 1,000 tonnes of chromite.
Mombasa-based David Visram is also seeking to unlock value for 32.712 tonnes of tsavorite while Baraka Mining in Voi has 26 kilogrammes specimen of tsavorite and a further three kilogrammes medium tsavorite and 57 pieces of faceted stones.
“They [State Department for Mining] sent their officers three times to verify them [stockpiles] because they could not trust what we were telling them,” Dr Kanyoro said.
We have contacted Principal Secretary for Mining Elijah Mwangi for comment.
Asked about the estimated value of the stockpile, the KCM chairperson said: “For the ore, there is no homogeneity for quality and hence needs sampling, assaying, crushing and blending to arrive at an estimated valuation. And for gemstones, it is even trickier as you need to establish colour, clarity, cut and carats. Simply put, each company keeps this information very close to their chest.”
Minerals which Kenya has declared as strategic are cobalt, graphite, copper, tantalum, lithium, Niobium, coltan, nickel and tin. Others are radio-active minerals like uranium and thorium, tsavorite, rare earth minerals and chromite.
Holders of mineral rights who encounter the strategic minerals they are not permitted to explore or mine are required to “immediately” report the discovery to the Cabinet Secretary for Mining.
Section 31(d) of the Mining Act 2016 requires Mining CS Hassan Joho powers to advise and seek approval from the Cabinet to declare certain minerals or mineral deposits as strategic, while Section 31(d) of the same law allows the Mineral Rights Board to recommend to the CS to declare certain minerals strategic.
“Being strategic, it means the government has interest in exploitation of those minerals. We communicated to stakeholders after the gazette notice on October 23,” Principal Secretary for Mining Elijah Mwangi said in an interview on September 19. “Anybody who has a concern about our regulations and the way we are handling the licences, we are very much open and there to explain to them.”
KCM, however, insists the authorities made the policy without public participation.
