The Constitution of Kenya, 2010, Article 62(f), states that minerals as defined by law are public land and that minerals belong to the people of Kenya. The management of minerals is vested in the National government
Minerals are managed through the Mining and Minerals Policy, 2016 and the Mining Act, 2016. The Mining Act, 2016 has listed in the First Schedule the minerals it regulates.
The Law has provided various licences for large scale operations and permits for small scale operations
To carry out activities regarding minerals such as exploration, mining and trading, one must be authorized through grant of a requisite licence or permit. These include;
- Reconnaissance Permit
- Reconnaissance Licence
- Prospecting Permit
- Prospecting Licence
- Mining Permit
- Mining Licence
The above permits and licences are issued by the Cabinet Secretary.
The Mining Act, 2016 introduced an Artisanal Mining Permit eligible for Kenyans undertaking artisanal mining activities. This Permit is issued at the respective county office
To maintain a licence or permit the holder must meet minimum performance criteria as a condition for renewal.
In order to facilitate processing of applications and monitor compliance of licences and permits, the Mining Act 2016, section 17(1)(a} has established the Directorate of Mines. The Public Service Commission has further approved the organisation structure with five divisions: - Licensing, Mineral Audit, Mines Inspectorate, Mineral Value Addition and Explosives.
The Divisions are assigned roles as follows;
Deals with management of mineral and dealing rights using the online mining cadastre system. The function entails receiving and processing applications of prospecting and mining licences and permits on behalf of the Mineral Rights Board. The Board reviews these reports and makes recommendations for approval or rejection of the applications to the Cabinet Secretary.
The Division also provides secretariat service to the Mineral Rights Board.
This Division is responsible for monitoring compliance with and enforcement of the Mining Act, 2016, and mining regulations in regard to performance of prospecting, mining and dealings operations.
Mineral Audit Division
The Division has the responsibility of verifying mineral exports, assessing values of mineral sales, monitoring and enforcing remittance of mineral royalties and levies, assessing payable royalties and advising on mineral royalty sharing.
Mineral Value Addition Division
The Division is responsible for promoting value addition of minerals in order to enhance the market value through promotion of adoption ofappropriate technologies, piloting of value addition centres for specific minerals that the country has advantage of and initiating policy on mineral value addition.
The Division is mandated with implementation of the Explosives Act, Cap115, and is responsible for regulating security and use of commercial explosives (blasting explosives and fireworks) including manufacture, sale, storage, transport and use of commercial explosives.
The Directorate has representation in all regional offices where Inspectors of Mines and Inspectors of Explosives are responsible to the Director of Mines in implementation of the Mining and Explosives Acts.
The functions of the Director of Mines are defined in the Mining Act, 2016 and in the Executive Order No. 1 of 2018, which include;
- Formulation and administration of policies on management of minerals, mining and quarrying.
- Administration of mining and minerals development through administration of relevant laws
- Licensing of exploration and mining concessions
- Compilation and management of mining and concessions data
- Management of mining cadastre system
- Arbitration of mining disputes
- Licensing and control of commercial explosives
- Management and monitoring of safety, health and environment in mines
Promotion of safe and sustainable exploitation of mineral resources
Licensing of mineral rights is managed through the online mining cadastre system and to date the status is as follows;
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Currently there is a moratorium in force that has suspended issuance of new mineral rights, however, renewals are still being processed. Dealings rights were not affected by the moratorium.
Mineral royalty collections have been as shown below;
Base Titanium Limited has the largest proportion of royalties paid by the top five single customer followed by by Tata Chemicals Magadi Limited, National Cement Limited, Mombasa Cement Limited and Bamburi Cement.
The Mines Inspectorate function monitors performance of licence and permit holders in meeting their obligations as prescribed in the law and licence conditions which includes preparing and submitting periodical reports. The Inspectorate in turn carries out inspections to verify the reports and impromptu visits to monitor state of performance.
Mineral Value Addition
Mineral value addition has four projects whose status are as follows;
- Voi Gem Centre
The Centre’s objective is to promote value addition of gemstones through, sorting, cutting and other value addition inputs. The building is complete and equipment to kick start the Centre has been installed. Capacity building for staff is ongoing.
- Vihiga Granite Processing Centre
The project has been conceived to exploit the abundant granite resource available in Vihiga County and parts of Kisumu county to make granite tiles and slabs. When the project comes to stream it will substitute imports of granite products.
The project is ongoing with feasibility study having been completed and land for proposed factory acquired and fenced.
- Kakamega Gold Refinery
The project’s objective is to offer a market for gold mined in the western Kenya region and from neighbouring countries. Kakamega county has set aside land for the proposed refinery, though recent developments are considering a public private venture to develop the refinery.
Consumption of explosives is driven by demand from the construction industry who require blasting explosives to break rocks in excavation works and in production of aggregates. There are four licensed dealers of explosives in the country.
Fireworks (pyrotechnics) for displays during functions such as New Year and Diwali festival, and emergency flares are regulated through grant of requisite licences and permits. Currently we have two dealers of fireworks;
- Online Mining Cadastre System
The Mining Act, 2016 provides for a digital mining cadastre system for management of mineral rights from applications, grant, compliance, renewals, surrenders and revocations.
The online mining cadastre system provides transparency and accountability as mineral rights status can be tracked online and the status viewed.
The system is undergoing upgrades in order to provide enhanced and efficient service delivery.
- Royalty Management System
The project will deliver a system for management of mineral royalties. The objective is to provide efficiency in tracking of royalty dues, payments, arrears and royalty sharing.
The project was at Tender stage but could not be awarded due to cuts in the supplementary budget.
Several institutions have been created by the Mining Act, 2016, namely;
- Mineral Rights Board
An advisory Board with the responsibility of advising the Cabinet Secretary on management of mineral rights and mineral resources. Its membership is drawn from government and the private sector
- National Mining Corporation
This is a semi-autonomous corporation which will act as an investment arm of the government in mining including the custodianship of the 10% free carry interest on behalf of the government and management of strategic minerals, it is yet to be operationalized.
- Minerals and Commodity Exchange – this function was moved to the ministry of trade under the Kenya Commodity Exchange.