Players in the mining sector have raised concerns about unfair practices in permit issuance and a regulatory environment that hampers investments in this lucrative industry. Despite the lifting of a four-year licensing moratorium in October last year, investors are encountering difficulties in obtaining necessary approvals from the ministry, citing instances of discrimination in permit allocation.
The Kenya Chamber of Mines (KCM), representing interests across artisanal, small, medium, and large-scale miners, as well as explorers, prospectors, dealers, processors, service providers, and professionals in Kenya, has appealed to President William Ruto to intervene.
They urge action to address bureaucratic hurdles within the ministry, which they argue are adversely affecting both major players and small-scale miners nationwide.
According to KCM, the sector’s performance has been declining due to reduced investor activities. This trend is reflected in Kenya National Bureau of Statistics (KNBS) data, showing a 6.5 percent contraction in the mining and quarrying sector in 2023, continuing into this year, following a 9.3 percent growth recorded in 2022.
“The contraction in mining and quarrying was reflected in decline in production of most minerals such as titanium, soda ash and gemstone,” KNBS notes in its latest economic performance update.
Artisanal miners are hindered by an unfriendly regulatory framework, according to statements from the lobby. This concern echoes a report by Auditor General Nancy Gathungu, highlighting deficiencies in the Ministry’s oversight of artisanal mining operations in Kenya. The report noted inadequate measures for monitoring these operations, leading to exploitation by middlemen and government revenue losses.
The Performance Audit Report on Monitoring of Artisanal Mining Operations disclosed that key processes such as the establishment and operationalization of Artisanal Mining Committees, as well as land mapping and delineation, remain unresolved. This is despite nearly six years passing since the enactment of the Mining Act 2016.
“The desperation has permeated the sector in a manner never witnessed before; business is now at a standstill and the impact is evident across villages in Taita Taveta, Turkana, Migori, Makueni, Kitui, West Pokot, Kakamega, Vihiga, Kwale, Tana River, Baringo, Samburu, Marsabit, Wajir, Mandera and indeed across the nation,” KCM chairman, Patrick Kanyoro, said.
Australian company Base Titanium, the current biggest exporter of minerals in Kenya, is among major players that are seeking approvals to prospect in Lamu and Tana River regions, with eight pending applications.
“Despite announcement that the moratorium on issuance of mining rights for all construction and industrial minerals was lifted, including for heavy mineral sands, no prospecting licences have been issued,” the firm said in its latest quarterly investor briefing, for the quarter ended March 2024.
The anguish cuts across the sector, KCM said, which it says portends a risk to stakeholders, whom are also grappling with a high cost of doing business.
“Those entrusted to steward the sector to new heights seem to be oblivious to their mandate; the haphazard decision making has sunk the sector to levels never witnessed in the history of Kenya’s mining sector,” Kanyoro said.
While the Kenya Kwanza administration decriminalised artisanal and small scale mining (ASM) in October 2023, with a plan to empower and bring them onboard the mainstream mining sector, there has been lack of policies to actualize the plan.
“Your Excellency, the issue of movement permits for minerals being applied in a discriminatory manner has elicited hopelessness in a sector that is just emerging from the effects of a moratorium, that was aggravated by Covid-19 and the Ukraine war,” Kanyoro said.
Processing of permits and licenses has also been slow, hence expensive for investors in the sector.
“We are through with the first half of the year and applications for various categories of permits and licenses are still pending. The fact that a miner has to leave his village to visit the Cabinet or Permanent Secretary’s office in Nairobi to collect a license in this digital era speaks volumes,” Kanyoro asserted.
He called for a fair, ethical, professional and legal process at the State Department for Mining and the ministry.
Mining, Blue Economy and Maritime Affairs Salim Mvurya has however maintained that reforms being put in place by the government will turn around the sector.
These include an online cadaster and sector safeguards, which came after a successful mapping of the country’s minerals.
A cadaster is normally an official register showing details of ownership, boundaries, and value of real property or minerals in a region.
According to Mvurya, the online cadaster allows applications for licenses to be done online.
“The Ministry is very positive the reforms it is undertaking will catapult Kenya into a desirable mining investment landscape and attract the best in mining,” Mvurya told Senate during a recent appearance, to respond to questions concerning the operations of his ministry.
