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Mining licensing ban affecting investment

Stakeholders in the Kenyan mining industry believe that the moratorium to renew mineral licences imposed by the Ministry of Petroleum and Mining last December is affecting the sector.

The Kenya Chamber of Mines (KCM) and other stakeholders in the mining industry are calling on the government to lift a ban imposed on the issuance of licences in order to attract new investors and spur growth in the sector.

According to Moses Njeru, the Chief Executive Officer of KCM, the industry wants the moratorium lifted as soon as possible owing to the negative impact it has on the market. “The confidence of foreign investors with Kenya as a prospective mining destination is extremely low because of challenges with licensing and laws that are not conducive for large scale investments,” he said.

Njeru also said investors seeking to venture into Kenya’s mining sector are frustrated as a result of the ban despite the Mining Rights Board processing several licence applications and giving them the green light to venture into the country.

Kenya is blessed with minerals like gold, zinc, copper, coal, gemstones, soda ash, ruby, titanium, mercury and gypsum. But despite the country’s rich mineral deposits, official data reveals that it has only managed to exploit some of its resources.

Mining contributes less than one per cent to Kenya’s GDP when it could contribute up to 10 per cent. Economic survey shows that Kenya’s total earnings from mineral production declined  5.5 per cent last year to Sh29.1 billion from Sh30.8 billion in 2018. Experts blame the dip on government policies hindering investors from operating in the country’s mining sector.

Since 2015, Kenya has not renewed or issued new mining licences after former mining cabinet secretary Najib Balala revoked the licences of 65 companies, forcing firms in the country to operate under a gazette notice. KCM reports that in the last two years, over 150 companies have presented applications for exploration licences while another 100 have applied for the dealer’s licence through the mining cadastre portal.

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