What Kenya Needs to do to earn high Dividend from Nascent Mining Sector
Events in Kenya’s rapidly evolving mining sector should lead us to ponder how we as a nation can build a sustainable mining industry. As a Kenyan who has lived and worked on mine sites in countries as diverse as Australia, Finland, Zambia, Mauritania, and the Democratic Republic of Congo (DRC), I believe I have an intimate understanding of the promise and pitfalls of this industry. So far, we have done certain things right. First, the government has created a Ministry of Mining to harness the industry’s potential. Second, the Cabinet Secretary has rightly recognised that the 1940 Mining Act is out of sync with the 21st century. Third, Kenya’s largest mining project developed by Base Titanium Ltd in Kwale is set to achieve commercial production. Finally, Kenyans have taken a keen interest in a high potential sector that currently accounts for less than one per cent of the gross domestic product (GDP). However, the controversial side of mining has also been exposed in the form of reports of alleged dodgy exploration licences. We have heard murmurs of discontent from local communities hosting mineral deposits.This reminds us that mining is fraught with challenges, particularly in Africa. Experience has taught me that a successful mining sector is based on four core pillars: Competitiveness, sustainability, equity, and accountability. Of course, these concepts are inseparable but I will focus on competitiveness.
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Outcry, Bribery claims over mining Licences Recall
Mining firms and oil and gas explorers in Kenya are warning that concerns over the sanctity of contracts signed with the government will create uncertainty in the business environment. This follows the cancellation of dozens of mining licences in a row that could drag the government into costly legal battles. Executives of major firms cited government unpredictability as the biggest threat to doing business in the country despite its new profile as a hotspot for minerals, oil and gas exploration. On Monday, Kenya revoked licences of 43 companies that were issued between January 14 and May 15 this year, sending jitters through the mining industry which has seen an increase in the number of firms and individuals seeking to tap into the country’s mineral wealth. On Friday, however, it emerged that Cortec Mining Company — one of the affected firms — had written to the Ethics and Anti-Corruption Commission (EACC) accusing a senior government official of soliciting a bribe over the licence.
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