Kenya halts flow of mining licences pending wide review

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The Kenya government will also review laws regulating the sector, the minister in charge of the sector said on Thursday.

East Africa’s largest economy has more than 300 local and foreign firms prospecting for minerals or producing on a small scale, up from less than 30 two years ago, Kenya’s Chamber of Mines says.

The country has proven deposits of titanium, gold and coal and is also estimated to hold large deposits of copper, niobium, manganese and rare earth minerals.

“I have stopped issuance of any mining license to allow for (a) proper review to ensure transparency in handling these issues,” the mining ministry quoted Cabinet Secretary Najib Balala as saying at a meeting in Nairobi.

He said a total of 500 mining and exploration licenses were currently live, of which only about 20 were active and the rest held speculatively in the hope of being exploitable in the future.

Among the companies operating in the East African state are Australia’s Base Resources, with a titanium mine in the coastal county of Kwale that will be Kenya’s biggest mine when it starts production before the end of this year.

Others include BOC Gases, Carbacid, Tata Chemicals and Kilimapesa Gold, the latter of which is wholly-owned by Britain’s Goldplat Plc and suspended its Kenyan operations due to low gold prices and uncertainty over the country’s ownership law.

Balala said the freeze on issuance of licenses would provide room for the country to complete reviewing its laws to ensure competitiveness in the mining sector.

“You need to let the government complete the process of making laws for the sector, the sector must not stall,” Balala said.

He said earlier this year his priority was to push through a new law for mining to replace an ineffective one that has been around for decades.

Among other changes, the law will stipulate clear timelines for licensing, a previously opaque process that was open-ended, leading to delays as officials took time to process applications.

Kenya last month said it will repeal a law passed last year requiring mining firms to have a 35 percent local shareholding, after foreign investors warned it could choke off the industry.