CS Najib Balala: New mining law to be in place by September
By Standard Reporter and Reuters | July 10th 2015
NAIROBI: A new mining law, which will give the Government a 10 per cent stake in new projects and aims to spur growth of the sector, should be in place by September.
Mining Cabinet Secretary Najib Balala said the Government was eager to put in place the "right framework" to ensure this is done.
Kenya exports titanium, fluorspar and manganese and has reserves of coal, niobium and rare earths, but mining currently accounts for less than 1 per cent of economic output.
"We believe we have the resources and every day we are discovering new resources," Balala told Reuters in his Nairobi office. The mining law was approved by the national assembly last year and is now awaiting approval by the Senate.
It sets the average rate of royalties to the Government for various minerals at 6 per cent, with miners paying a lower rate when they process the minerals locally.
It also gives the Government a 10 per cent share, known as free carry interest, for projects that meet yet-to-be determined minimum investment thresholds. Firms will also be required to sell 20 per cent of their shares on the Nairobi bourse to raise capital and spread ownership among Kenyans.
The CS said the Government was close to sealing a deal with China's Exim Bank for the funding of a $67 million airborne survey to map Kenya's mineral wealth.
The 30-month survey will be carried out by Chinese firms with Kenya appointing an independent panel to oversee the quality of the results from the primary data.
Britain, which along with Australia has agreed to contribute experts to that panel, is funding another project to craft Kenya's 20 year mining strategy, Balala said. Consultancy firm McKinsey will lead the project.
Early this year the ministry cancelled 65 licences for prospecting and mining; some of the revoked permits were held by individuals and others by firms. The move raised concern that investors would lose confidence in the viability of the local industry.
However, Balala said the licences were cancelled either due to their having reached dates of expiration or breaches of licensing conditions and of the Mining Act.
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