The Bill, which was approved by the Cabinet on Tuesday evening, seeks
to facilitate the establishment of a vibrant minerals and mining sector
to avoid the pitfalls of other mineral rich countries where they have
caused environmental degradation, conflict and social decay.
"The Bill seeks attract substantial investments in geological
mapping, capital development, exploration and exploitation of mineral
resources, and make Kenya a hub for minerals processing, value addition
and trade in the Eastern African region," said a statement which was
issued after the meeting.
Delays in enacting the law to regulate the mining sector has made it
difficult for mining companies to undertake relevant mining activities
as the East African nation is yet to benefit from the titanium exports.
Data from the Mining Ministry indicates that Kenya received only 247,000 U.S. dollars in the last financial year.
The government says that the process of reviewing Kenya's mining laws has been going on for the last 20 years.
Kenya has given priority to the review of laws and regulations in the
mining industry in order to make sure that the sector contributes
effectively to the economic growth, a government official said on
The new mining bill, which is waiting debate by parliament, was
developed after consultations with the County governments where the
minerals have been discovered to ensure that the benefits accruing from
such minerals also reach the local population.
The government has also started a National Airborne Geophysical
Survey to improve knowledge of the country's resource potential. The
results of the high quality aeromagnetic survey will be made public
information, beneficial to interested parties such as you the investors.
Mining Cabinet Secretary Najib Balala said late last year that both
Kenyan and Chinese governments have entered into a partnership that will
see the latter do a geo-mapping or airborne survey for minerals in all
counties beginning 2014.
"In order to effectively regulate activities in the minerals and
mining sector, the Bill envisages the enactment of a clear, simple and
transparent legal framework in line with the Constitution of Kenya 2010
and Vision 2030 that seeks to turn Kenya into a middle income country by
the year 2030," the statement said.
The bill seeks to bench mark with the international best practice
especially on issues of regulatory regime, royalties and engagement of
communities and other stakeholders ensuring that benefits accrued from
the mining sector not only benefit the current generation but
fundamentally also the future generations.
Among the policy proposals in the proposed law is the establishment
of the National Mining Corporation which shall serve as the investment
arm of the national government in respect of minerals.
The government intends to have a stake in local mining deals but the
percentage is yet to be agreed. The proposed law also proposes mandatory
local equity participation which is also yet to be set.
The law proposes that royalties be shared among the central
government, which will take 75 percent, County government 20 percent and
the community to benefit from the reminder 5 percent.
Other proposals include requirement by mining companies to execute an
environmental protection bond and come up with a plan for
rehabilitation of the mined land; the establishment of a mineral
commodity exchange; and restricting local minerals dealership to
companies with at least 60 percent local shareholding.