Audit reveals 78 licences were issued to mining speculators

By Jackson Okoth

A task force appointed to review prospecting, exploration and mining licences issued over the last ten years by the Department of Geology and Mining has revealed that close to 100 mining licences were irregularly issued.

Out of the 253 licences issued, the task force, headed by lawyer Mohammed Nyaoga, found out that only 175 had valid prospecting rights on file, nine had no prospecting rights while 69 licences could not be verified.

“In some instances, licences were issued to companies that were neither in possession of a certificate of incorporation or business name registration, making it impossible to establish their legal status,” said Nyaoga.

He made these remarks yesterday while presenting a report by the task force, whose delivery has been delayed for more than three months due to what it described as logistical issues.

New Mining Bill

The task force found out that there were cases where large tracts of land of over 1,000 acres had been allocated yet the companies concerned had no capability to prospect for the same.

Certain licences were issued in disputed areas with land owners and parties claiming ownership of existing licences.

“We are waiting to see what will be contained in the draft Mining Bill once it is published. We have had licensing gaps and our concern is about the process rather than who owns the licence,” said Monica Gichuhi, chief executive officer at the Kenya Chamber of Mines.

Investors are concerned about security of tenure and are seeking for a stable regulatory environment to inspire confidence.

The task force has made a raft of recommendations including one that applicants must show genuine financial capacity to be able to carry out the activities applied for. It has also suggested that companies and individuals should apply for a licence online.

“In order to manage possible speculation, this process should be closely managed if the sector is to remain open to many and not just a few,” said Nyaoga.

A review of mining licences is happening when the Cabinet has approved a new Mining Bill that will see speculators who have been hoarding prospecting and mining licences, knocked out of business.

The draft law is being fine-tuned at the Attorney General’s office and should be published in the next one week, after which it will be introduced in parliament for debate.

“I will not entertain speculators and no consent will be given to licence transfers by this group of people. What we need is a legal environment that is predictable, transparent and equitable,” said Mining Cabinet Secretary Najib Balala.

archaic files

He made the remarks yesterday while receiving a report from a task force appointed to review all prospecting, exploration and mining license agreements. Its mandate included review of all licences issued since 2003 and make recommendations on the way forward.

The task force was supposed to submit its findings by last October.

“We have been dealing with challenges of execution that are mostly systems related including retrieval of data from mediocre and archaic files found at Madini house,” said Nyaoga.

There were cases where licences were issued in respect of large pieces of land when the programme of work and expenditure proposals did not at all justify such awards.