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Kenya is poised for unprecedented mining boom within the next ten years, as companies begin prospecting for large-scale development.
The newly modified Mining Act, assented to by President Kenyatta in May, 2016 and a 20-year strategy written by Mining CS Dan Kazungu are some of the key ingredients hoped to increase investor appetite for oil companies like UK’s Tullow Oil, which have been prospecting in Kenya for years.
Speaking ahead of Kenya Mining Forum set to be hosted in Nairobi next month; Mining CS Dan Kazungu said that the government would use the two crucial improvements to prepare the country for the next big wave of mining activity to attract foreign investors.
“With just a handful of companies operating in the country, the two implementations will offer mining companies and investors with vast opportunities to discover and tap into new Greenfield projects and make Kenya a mining frontier,” said Kazungu.
Kenya is set to host a two-day mining conference in September where industry players are expected to discuss the recently updated mining act and how it will boost investments and development of the sector.
The country has a high mining potential and already ranks the third largest producer of soda ash and the seventh producer of fluorspar globally, and it is also known for gemstone mining, currently dominated by small scale miners – who account for 60 per cent of annual gemstone production.
With further exploration from firms such as Base Titanium, Base Resources wholly-owned subsidiary that operates Kwale as well as the implementation of the updated Mining Act, it is estimated that the industry could generate up to five-folds the Sh1.65billion revenues government earned from mining and mineral operations in the last financial year.
It is understood that Base Resources has already applied to undertake further exploration around its mines and foreign companies are equally considering digging for niobium along the coastal region.
Acacia which is owned by Canadian conglomerate Barrick Gold is also prospecting for gold mining on the shores of Lake Victoria.
The new legislation is also expected to address thorny issues that have existed in the industry for decades. It includes plans on principles of land policy, local content and environmental considerations and rights to natural resources among other concerns.
In its old stature the Mining Act did not make provision for local content for instance.
The Mining Bill states that where a company whose planned capital expenditure is over the prescribed limit it shall, within 4 years after obtaining a mining licence, offload at least 20 per cent of its equity at a local stock exchange – and the Cabinet Secretary may extend the required period if he deems it fit after consulting with the National Treasury.