What classification of some minerals as strategic means

Workers operate machines at a mining site. [File, Standard]

The government has declared Cobalt, Tantalum, Lithium, Coltan, Niobium, Copper and other rare earths as strategic minerals amidst an economic boom in the local and global mining sectors.

In a Gazette notice last week, Cabinet Secretary for Mining, Blue Economy and Maritime Affairs Salim Mvurya also declared Nickel, Graphite, Tin, Tsavorite, Chromite, Uranium and Thorium as strategic minerals.

Section 16 of the Mining Act 2016 states that the Cabinet Secretary shall advise and seek the approval of the Cabinet to declare certain minerals or mineral deposits within the country as strategic.

This means the Government of Kenya has the right of pre-emption and first option to buy these minerals before they are offered for sale to other buyers in the open market.

The Mining Amendment Bill 2023 currently in parliament proposes to shift this authority from the Cabinet Secretary to a Mining Rights Board that will be established.

The government is also entitled to ten per cent in the share capital of mining operations relating to strategic minerals and large-scale mining projects.

Data from the Economic Survey indicates that the gross domestic product of Kenya’s Mining and Quarrying sector has almost doubled in the past few years from Sh68.9 billion in 2018 to Sh120 billion in 2022.

The sector has also registered significant growth in investments over the past five years. Commercial banks credit facilities to the mining sector have seen an increase of 55 per cent, from Sh14.7 billion in 2018 to Sh22.8 billion last year.

A survey released earlier this year found that there are 970 minerals country-wide with trillions of shillings in potential earnings for the Kenyan economy and local communities.

According to the survey, 15 counties including Kitui, Embu, Kwale, Tana River, Kilifi, Makueni, Isiolo and Taita Taveta have rich deposits of precious minerals.

Other counties include Homa Bay, Migori, West Pokot, Turkana, Samburu, Elgeyo Marakwet, Kericho and Nandi.

Together, these counties are home to deposits of copper, graphits, manganese iron ore, coltan, nickel, lead, zinc, thorium and uranium among other rare earth elements and gemstones.

With the ongoing efforts around the world to adapt to environmentally-sustainable production, these precious metals used largely as components in renewable energy systems and technologies are bound to increase in value.

Kenya is believed to have some of the world’s largest deposits of Niobium and Tantalum, both of which have been listed as strategic elements in the recent gazette notice.

Niobium is used either in its pure form or in alloys with nickel, cobalt and iron in the production of jet engine components, gas turbines, and heat-resisting and fire proof equipment.

Tantalum can store and transmit electrical energy and is used to make components for telecommunications and data storage hardware and medical implants.

In August this year the government invited bids for consultants to develop a long-term Kenya Mining Vision in a bid to stimulate and promote investment in the sector.

The 20-year Kenya Mining Vision will make a case for Kenya’s mineral resources to contribute to economic growth, the energy transition agenda and inclusive development.

An audit report by former Auditor General Edward Ouko in 2019 however found that the government through the State Department of Mining is poorly resourced to effectively manage the sector.

According to the report, the licensing division of the Directorate of Mines only had 11 out of 77 inspectors of mines required.

The Mines Inspectorate Division and Minerals Audit units were also dismally staffed, with none of the 93 and 62 positions respectively filled out as at 2019.

“The department had not developed a monitoring framework with timelines and reporting framework for monitoring mining activities,” stated Auditor General Edward Ouko.