Kenya losing billions in mineral extraction, says CS Najib Balala

NAIROBI: Kenya is losing billions of shillings to players in the unregulated mining sector, the Government has disclosed.

Mining Cabinet Secretary Najib Balala has also revealed the whole country is licensed to miners, with some only existing on paper.

Mr Balala, who appeared before the Senate committee on Lands and Natural Resources, said despite the country having huge mineral deposits, it has not been earning much from the sector that is mainly dominated by unscrupulous miners.

He told the senators that although the miners were not declaring all their earnings to revenue authorities, they were claiming tax refunds, crippling the sector as a result.

The committee had invited Balala to shed more light on the Mining Bill 2014, which is presently before the Senate.

The CS told the committee the proposed legislation will help streamline the sector and earn the country enormous returns.

"The proposed law, once enacted, will assist in restructuring the mining sector. A lot needs to be done to save the country from exploitation and ensure the citizenry benefits from extraction of the resources," said Balala.

FIRMS CENSURED

The minister and senators censured Magadi Soda, which they said was making losses despite the huge investment on a 200,000 hectares plot at Lake Magadi. They added that while Kenya Fluorspar Company makes Sh4 billion yearly, it only declares Sh300,000 to the Government.

The Committee was also stunned that a firm extracting titanium in Kenya is paying the Government Sh100 million and claiming Sh2.5 billion VAT refunds.

"This company is claiming 23 times what it submits to the Government. This is absurd and unacceptable. Magadi Soda too is paying nothing to the Government. It has become a cash cow for a few despite being in existence for years," said Committee Chairman Lenny Kivuti.

The lawmakers said the process of licensing miners in the country was still opaque despite the Government's pledge to make it transparent.

"How can the whole country be licensed to miners. It is disturbing that others even just keep the licences and only renew under different names upon expiry. This means the whole country is taken!" said Kivuti.

The committee has proposed 25 minor amendments to the bill, which includes entrenching the Council of Governors (CoG) in the boards.

"The changes to the original bill are in order to harmonise the devolved system of government in the governance of natural resources. The bill has the CS everywhere in its administration," said Kivuti.

The senators also want decisions on the strategic minerals made by the Cabinet and not the CS.