Artisanal miners upbeat as gold processing bill set for second reading


Artisanal miners help their peers descend into a mine shaft in Ikolomani. [Benard Lusigi, Standard]

In the heart of Bushiangala village in Ikolomani, Kakamega County, the sun sets in hues of gold and the earth whispers tales of buried treasures.

Here lies a community of over 8,000 artisanal miners who, for nearly a century have toiled under the scorching sun, their hands calloused and their spirits unwavering. And despite their dedication and resilience, the road for these miners has been fraught with uncertainty and hardship.

With no regulations in place to govern their operations, they have often found themselves at the mercy of unscrupulous middlemen, their hard-earned spoils undervalued and their labour exploited. 

Some of the labourers have lost their lives after being trapped in the mines while others have suffocated from fumes emitted by the generators.

Environmental degradation has also scarred the land. Nonetheless, there is a ray of hope.

A Bill crafted by Ikolomani MP Benard Shinali is seeking to bring order, safeguard the rights of the artisanal miners, and pave the way for a brighter future for all those who call the mines their source of livelihood.

The Gold Processing Bill, 2023 is set to be tabled in the National Assembly for approval once the lawmakers resume from a month-long recess in June.

Mr Shinali while speaking during a public participation forum at Musingu Friends Church that was organised by the National Assembly's Departmental Committee on Environment,  Forestry and Mining said that the bill is seeking to streamline the 'gold mining sector' which has been largely unregulated.

The proposed law provides that a person or company shall apply for a processing license to the Mining Cabinet Secretary.

Shinali said that the bill, after being assented into law will establish a legal and institutional framework for collecting, purifying, smelting, fabricating, registering, monitoring and transporting gold or products of gold, adding that it will be mandatory for a person or firm planning to venture in gold mining to be licensed.

"The locals and other investors interested in gold mining will be given equal opportunities but after being licensed," said Shinali.

He said that a Gold Processing Corporation would be a full-fledged state agency complete with a board, which shall, among other things be charged with the responsibility of licensing small and large-scale miners, exploration activities and setting up of gold refineries.

"The corporation shall also regulate the registration and licensing of the laboratories that analyse, test and grade gold products before being sold," said Shinali.

He said a gold refinery plant will be set up at Lidambitsa area in Ikolomani on the already identified 10-acre-piece of land.

"Already an investor has been identified and has received the letter of award. President William Ruto will be launching the plant before the start of the next financial year," said Shinali.

He added: "Our aim is to have gold products manufactured at the source, which will in turn enhance revenue collection."

"We will be able to store gold at the Central Bank of Kenya (CBK) and this will ensure we maintain a steady forex exchange rate," said Shinali.

Last month, Ruto announced that the government had released Sh5.8 billion for the construction of the stalled Kakamega Gold Refinery while opening the Kakamega International Investment Conference.

“The government has released Sh5.8 billion for the construction of the gold refinery. This will enable Kakamega to mine and process the precious mineral locally and only take it to the market after value addition," said Ruto,

“We want to get value for every coin we spend, and for us to spur the growth of the county economy, we must make meaningful investments whose impact will be felt by everybody,” he added.

The plant is expected to serve miners from Turkana, Nandi, Kericho, Isebania, Siaya, Kakamega, Migori, Kisii, and Vihiga counties which are rich in gold deposits.

Kenya has at least 250,000 artisanal gold miners and the sector supports about 800,000 livelihoods. The mining sector contributes less than 1 percent to the country's Gross Domestic Product (GDP).

According to Acacia Mining Company which has been carrying out gold exploration in Kakamega, the county had more than 1.31 million ounces of gold deposits valued at Sh171 billion along the Lirhanda corridor.

Ikholomani miners use water from a recent downpour to sift the surrounding soil using makeshift sluices. [File, Standard]

The areas with rich gold deposits along the Lirhanda corridor include Malinya, Rosterman, Shirumba, Kilingili (along River Iguhu), Shipeso, Isulu, Bushiangala and Sigalagala.

Shanta Gold exploration report showed Kakamega alone has gold deposits valued at Sh200 billion while Ramula-Mwibona area lying on the border of Luanda and Gem constituencies in Vihiga and Siaya counties has about 470,000 ounces of gold whose street value is estimated at Sh61.81 billion.

Nakuru Town MP, David Gikaria who is the chairman of the Assembly's Departmental Committee on Environment, Forestry and Mining said the Bill would require foreign investors to have a local partner before being granted a mining license.

"The local partners must be a person who comes from the gold mining area," said Gikaria, adding, the law will ensure royalties from gold mining are ring-fenced to benefit the host community.

"When a mining company declares the value of gold deposits in an area,it will pay 1 percent of the total value which will go to the host community. After mining and selling of the precious metal, 5 per cent of the net profit of the total amount will be given back by the investor as royalties," said Mr Gikaria.

The lawmaker said out of the 5 percent royalties, 70 per cent will be surrendered to the national government, 20 per cent to the county government and the remaining 10 percent will go to the host community.

He said the 10 per cent that goes to the community would be handled by a trustee. "There shall be established Export Processing Zone (EPZ) where we shall process everything locally. We do not want to export gold to Dubai and make rings and buy them back at exorbitant prices. You can order it directly from Ikolomani," said Gikaria.

He said a laboratory to test, analyze and grade gold products will be set up soon in the area. “We will lobby our colleagues to pass the Bill to set the standards, regulate the sector and weed out people who exploit miners in a bid to enrich themselves,” he said.

The locals want royalties from gold sales to be increased from 10 per cent to 20 per cent.