Mining and Regulatory Reform in Kenya - 2019


Issue Timeline

2012: KCM amplifies it advocacy efforts after consilidating the industry position.

2013: The draft Mining bill is developed.

2014: The draft policy is published in the Mining Ministry's website and KCM has meetings with the CS of Mining, the Parliamentary Committee on Environment & Natural Resources (ENR). 84 amendements are adopted from KCM. The bill is sent to Senate

2015: Senate invites and collects views from stakeholders on the Mining Bill

2016: The Mining and Minerals Act is passed by parliament and the Policy is also approved by Cabinet.

2017: 13 regulations to operationalise the Mining Act are published.

2018: KCM hosts the Kenya Mining Forum, an exclusive annual international platform for mining professionals in Kenya and the East African region.

2019: KCM requests the CS of Mining to facilitate the process of not only drafting the health and safety regulations but as well as be involved in the entire review process.

Issue Development

Kenya has a variety of minerals including soda ash, fluorspar, titanium minerals, rare earth elements, gold, coal, gemstones, manganese, iron ore, gypsum, carbon dioxide, diatomite, chromite, silica sand and limestone. Various international mining giants had abandoned Kenya due to its ineffective land acquisition and compensation policies. In 2004, the government removed all excise taxes on capital mining equipment to attract investors. However, this did not result in any significant subsequent capital investment. The legal provisions and regulations for the mining sector were mainly based on the Mining Act (Cap 306) which had been enacted way back in 1940. This meant that the industry was operating within an archaic legal framework which was out of touch with the constitution and current industry needs and international best practices. Cap 306 did not cover several minerals that were mined and quarried on a commercial basis. Its guidelines on procedures and timelines for licensing and supervision were unclear, leading to cases of speculators selling or hoarding mineral rights.

Consequently, the Kenya mining sector faced many obstacles and disadvantages caused by the poor regulatory framework.

KCM started lobbying the government to persuade it to agree to conform to standard international mining legal principles. This led to the national mineral resources and mining policy in 2007 that sought to establish a thriving minerals industry by attracting more investment. The policy stated that their objectives were to diversify exports, to widen the tax base to generate skilled employment, to create demand for local goods and services, to contribute to infrastructure development and to act as a catalyst for wider investment in the economy. KCM needed to get a Mining Act that responded to industry needs and provided clear and predictable processes to any service required by the industry.

In 2012, KCM sought to include its policy position in the draft national mineral resources and mining policy and bill. Their position targeted amendments including detailed recommendations to amend a substantial number of clauses and to draft papers, each setting out a policy position to address a specific issue in detail: These were the need for landowner consent for prospecting, exploration and mining; governance and regulation of the sector by the government.

Case Review


Case Review of the Mining Legislation and Policy, 2019

KPMG Analysis of the Mining Act, 2016

Legislation


Mining and Minerals Policy, Sessional Paper No. 7 of 2016

Mining Act, 2016

Regulations

See 9 Mining Regulations

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