The State Department for Mining

www.mining.go.ke

Mandate and Functions of the State Department of Mining

  • Develop policy on Extractive Industry;
  • Conduct mineral exploration;
  • Develop mining policy management;
  • Prepare inventory and mapping of mineral resources;
  • Coordinate mining and minerals development policy;
  • Develop policies on the management of quarrying of rocks and industrial minerals;
  • Ensure management of health conditions and health and safety in mines;
  • Conduct mining capacity development and value addition and;
  • Maintain geological data (research, collection, collation, analysis).

Milestones and Initiatives Achieved

  • Minerals and Mining Policy developed
  • Mining Act No. 12 of 2016
  • 13 Mining Regulations finalised
  • Countrywide Airborne Geophysical Survey at advanced stage of implementation
  • Development of Kenya Mining Strategy 2030
  • Online Transactional Mining Cadastre Portal (OTMCP) operational.
  • Continuous exploration activities ongoing
  • Mineral Certification Laboratory being modernized
  • National Geological Data Centre soon to be commissioned
  • Mineral exploration in coal and iron ore on going in Taru Basin
  • Gemstone Centre in Voi soon to be commissioned
  • Initiated process of setting up a granite cutting facility in Vihiga County
  • Land use/cover maps produced
  • Animal population trends produced including mapping of wildlife corridors

Policy, Legal and Regulatory Framework

The Constitution of Kenya 2010 Provisions on Natural / Mineral Resources

ARTICLE Provision
Article 62 All minerals are held in trust for the people of Kenya by the national government
Article 66 Parliament to enact legislation to ensure investments benefit local communities & their economies
Article 69 State to ensure sustainable development & management of natural / (mineral) resources & environment   and equitable sharing of accruing benefits
Article 71 Requires mineral agreements to be ratified by Parliament
Article 232 Requires participation by people in policy making

The Mining and Minerals Policy

The policy provides a framework for;

  • Ensuring sustainable utilization of mineral resources.
  • Harmonizing mining and environmental legislations
  • Mainstreaming activities of artisanal and small-scale miners.
  • Local participation in the mining investment ventures.
  • A well-structured mining fiscal regime and
  • Equitable sharing of mineral benefits.

The Mining Act, 2016

  • The Mining Bill was signed into law by the President on 6 May 2016.
  • The new mining law came into force on 27 May 2016.
  • Operationalization of the new law commenced following the approval of the regulations in June 2017 by Parliament and the inauguration of the Mineral Rights Board by the CS on 17 July 2017.

Key Features of the Mining Act

  • Formalization & regulation of Artisanal and Small-Scale Miners (ASM)
  • Introduction of new types of mineral rights. (reconnaissance licence, prospecting licence, retention licence, mining licence, reconnaissance permit, prospecting permit, mining permit, artisanal mining permit)
  • Enhanced requirements for an applicant for a large-scale mineral right
  • Counties/communities involvement in the licensing process.
  • Construction minerals put under the law

Key Features of the Mining Act Cont.

  • The State can declare some specific minerals as strategic
  • Creation of a State Mining Corporation (National Mining Corporation)
  • Transparency has been strengthened and enhanced in the following ways:
    • Obligation to publish data on operations, contracts & payments made to national gov’t, counties, communities.
    • Paper-based applications abolished (online mining cadsastre fully operational).
    • Introduced timelines for processing and issuing licences
  • Establishment of a Minerals and Metals Commodity Exchange
  • Royalty revenue sharing formula (national government -70%, county government – 20%, community – 10%)
  • Asset on termination of mining operation to be surrendered to the National Gov’t & Counties
  • Award of mineral rights by tender
  • State shall have a 10% free carried interest in all large scale mining operations
  • Mineral Development Agreements for projects with minimum capital investment of US$500 million
  • Large scale mining companies to list on the Kenyan Securities Exchange within 3 years of commencing production
  • Regulation of mine support services
  • Mineral Rights Board – Advisory role to the CS
  • County Artisanal Committees – role of licensing artisanal mining operations at County Level

Other Laws and Policies Guiding Mining Operations

  1. Explosives Act – Administered by the State Department of Mining
  2. Geologists Registration Act – Administered by the State Department of Mining
  3. Natural Resources Act – Administered by the State Department of Environment
  4. National Environmental Management Act – Administered by NEMA
  5. Geologist Bill – In Draft form
  6. Local Content Bill – in Draft form
  7. Sovereign Wealth Fund Bill – In Draft form

Mining Related Strategies

  1. Artisanal and Small-Scale Mining Strategy – Drafted and awaiting stakeholder consultation and implementation
  2. 20 Year Mining Strategy – Diagnostic Report prepared and awaiting full review and development of the full strategy

Mining Regulations

Adopted and Gazetted 13 sets of regulations as follows:

  1. Mining (Licence and Permit) Regulations, 2017
  2. Mining (Use of Assets) Regulations, 2017
  3. Mining (dealings in Minerals) Regulations, 2017
  4. Mining (Employment and Training) Regulations, 2017
  5. Mining (Work Programme and Exploration Reports) Guidelines
  6. Mining (State Participation) Regulations, 2017
  7. Mining (Use of Local Goods and Services) Regulations, 2017]
  8. Mining (Strategic Minerals) Regulations, 2017
  9. Mining (Award of Mineral Rights by Tender) Regulations, 2017
  10. Mining (Community Development Agreement) Regulations, 2017
  11. Mining (Mine Support Services) Regulations, 2017
  12. Mining (Reporting on Mining and Mineral Related Activities) Regulations, 2017
  13. Mining (National Mining Corporations) Regulations, 2017

Geological Data Acquisition and Management

Ministry mandated to carry out geological data acquisition through;

  • Carrying out systematic geological mapping and mineral exploration at various scales to provide data relating to rock types and prospective zones of mineralization
  • Undertaking research on the country’s geology, mineralization systems etc.

FLAGSHIP PROJECTS

Flagship Project 1: Nationwide Airborne Geophysical Survey

  • Implementation of the Nationwide Airborne Geophysical Survey is at advanced stages
  • The Project will enhance the understanding of the Country’s Geology and reduce risks
  • It will also stimulate research in Geology and encourage value addition.
  • Data generated by the survey will attract considerable FDI into the mining sector.

Flagship Project 2: Geological Data-Bank

  • A geological repository centre is being set up with technical assistance from British Geological Survey and is expected to be operational before the end of the current financial year.
  • This will ease access to the geological data

Flagship Project 3: Acquisition of Field Data generation equipment

  • Local geological data acquisition capacity is being modernized through procurement of modern field geological data generation equipment and exposure of technical staff through training on advanced data generation techniques

Flagship Project 4: Establishment of a Mineral Certification Laboratory

  • To enhance analytical capacity and credibility, the geological laboratory is being modernized with the aim of having it internationally accredited to carry out analysis locally.
  • This will save funds used in external geochemical analyses.

Mineral Exploration, Mining and Value Addition

A TYPICAL MINING CYCLE

Phases of a Mining Operation

Exploration Phase

(Exploration Licence)

Mining Phase

(Mining Lease/ License)

Closure Phase

(Mining Lease/License)

•  Programme of Work

•  Proof of Financial Capability

•  Annual Activity reports

•  Mining proposal/Feasibility Study

•  Mine Closure Plan

•  Environmental rehabilitation Plan

•  Mining Lease Surrender
 The Process

 

 

Kenya Geological & Mineral Occurrence  Map                                                       

MAP OF MINERAL OCCURRENCE IN THE REPUBLIC OF KENYA

Chromite

Limestone

Manganese

Diatomite

Gemstones

Gypsum

Natural carbon dioxide

 

Gold

Coal

Iron Ore

Copper

Titanium

Niobium and Rare Earth

Soda ash

Fluorspar

 

 

Mineral Management and Revenue Generation

Mineral Rights and Concessions Managed through;

  1. Directorate of Mines
  2. Mineral Rights Board
  3. Inspectorate Unit
  4. Mineral Audit Unit
  5. County Artisanal Committee – As Per Section 94 of Mining Act

Licensing and Concessional Management

  • Online Transactional mining cadastre: the principle licensing tool
  • Operational Mineral Rights Board –
  • Enhanced capacity of the Minerals Inspectorate Unit
  • Set up and operationalized Minerals Audit Unit
  • In the process of forming County Artisanal Committees

Royalties

  • A royalty is a compensation paid to government by mineral right holders for the right to exploit resources
  • The country charges royalties on the gross sales value of the mineral
  • Royalty rates are set and gazzetted by the Cabinet Secretary.
  • The prevailing rates rates were gazetted in 2013. Key royalty rates:
    • Gold, fluospar, diatomite, CO, – 5%
    • Mettalic ores – 8%
    • Titanium – 10%
    • Gemstones – 5%
    • Industrial minerals – 1%
    • Cement mineral levy 140/= per tonne

Figures for 2017/18 Upto March 2018

Main Royalty Revenue Earners

Product /Company  2014/15

Kshs

2017/18 (As at 30th March 2018)

Kshs.

Mombasa Cement Ltd ( Levy on Cement Minerals 180,606,861.00 167,435,940.0
East African Portland Cement 108,297,860.80
Savanna Cement 39,655,017.00 10,000,000.00
Athi River Mining Ltd 100,888,794.85
Bamburi Cement Ltd 346,288,594.80 137,243,696.00
National Cement 24,950,800.00 40,930,400.00
Royalty on Carbon Dioxide 1,008,093.00 46,411,674.00
Royalty on Exports and Extraction 88,399,244.90 45,211,988.00
Royalty on Gold Exports 4,958,158.20                    35,994,276.00
Export Permit Fees/ Mineral Dealers License fees 3,028,274.00                      3,2260,050.00
Royalty on Base Titanium Ltd Products 243,783,515.00                      319,356,814.00
Royalty on Tata Magadi Soda Products 114,644,267.50                      97,060,668.00
1,258,666,981.05 992,516,226.00

Way Forward

  • Build on the Achievements, while addressing the challenges
  • Complete the ongoing four (4) Rapid Results Initiatives (RRIs) on:
  • Launch of the Countrywide Airborne Geophysical Survey;
  • Formalization of Artisanal and Small Scale Mining countrywide;
  • Resolution of the Local Communities/ Developer conflict in the Kwale Mineral sands project
  • Investment conference to showcase recent achievements in the Country’s mining Sector while marketing investment opportunities in the Sector
  • Create and foster linkages and collaboration with other institutions so as to create and benefit from the synergies resulting from the relationships
  • Create and foster linkages and collaboration with other institutions so as to create and benefit from the synergies resulting from the relationships
  • Continue Implementation of ongoing projects and Programmes
  • Implementation of the various Policy, Laws, Regulations and Strategies already in place and completion of the ongoing/ pending ones
  • Operationalize the institutions provided for in the Policy and the law
  • Find and expeditiously implement ways for addressing the current critical deficits in capacity and funding
  • Implement robust community, Development Partner and other stakeholder engagement initiatives