In a bid to keep up with the changing times and also to comply with the provisions of the Constitution 2010, the Government intends to pass the Mining Bill, 2014 (the Bill) into law. The Bill attempts to modernize various aspects of mining in Kenya. For instance, the Bill seeks to provide for the establishment of a computerized mining cadastre and registry system, including a register of mineral rights.

The Bill provides for different categories of minerals including “strategic minerals” which are said to include “all radioactive minerals” which are to be used for socio-economic development and national security purpose.

New State Bodies

Currently, there appears to be about 6 directorates as per the Ministry of Mining website

  1. Directorate of Mineral Management and regulations;
  2. Directorate of Geological Surveys;
  3. Directorate of mineral promotion and value addition;
  4. Directorate of Mine health, safety and environment;
  5. Directorate of resource surveys and remote sensing; and
  6. Directorate of corporate affairs.

The Bill, however, only expressly provides for 2 directorates: the Directorate of Mines and the Directorate of Geological Survey. However the Cabinet Secretary for mining(the Cabinet Secretary) is empowered to establish such additional directorates as are necessary.

The Bill also seeks to establish a new state corporation that will be called the National Mining Corporation (the Corporation) which shall be the investment arm of the national government in respect of minerals. Some of the functions of the Corporation include engaging in mineral prospecting and mining and investing on behalf of the national government.

Licences and Permits

Under the Bill, a mineral right may be granted in respect of a large scale operation or small scale operation. The following licences and permits (which shall be in the prescribed form) maybe granted for a mineral right to authorise a mineral right holder to engage in:

  1. Large-scale operations which shall include:
    1. a prospecting licence;
    2. a retention licence;
    3. a mining licence; or
  2. small scale operations, which shall include:
    1. a prospecting permit; or
    2. a mining Permit.

Certain conditions may be attached to such licences and permits.

The Bill further provides for dealings in minerals and makes provision for the application for a mineral dealer’s licence and a diamond dealer’s licence. Furthermore, a person will require an export permit to be able to export minerals out of Kenya. An assignment, transfer or sale of mineral rights is allowed under certain conditions and restrictions.

Money Matters

An applicant or a holder of a mineral right, a mineral dealer's licence or a diamond dealer's licence shall be required to pay prescribed fees which may include application filing fees, report filing fees, fees for access to geological data and fees for access to public registers.  A holder of a mineral right shall also be required to pay royalty to the State in respect of the various mineral classes won by virtue of a mineral right.

Land Rights

The Bill also seeks to make provision for mineral rights on private land and on community land. Though the consent of the land owner and the National Land Commission is required respectively, it is interesting to note that there are instances where such land may be compulsorily acquired by the Government through the Cabinet Secretary.

In the interest of the State and the locals

In the case of large scale mining operations and to mining operations, relating to strategic minerals, the State shall acquire 10% free carried interest in the share capital of the right, in respect of which financial contribution shall not be paid by the State.

The Cabinet Secretary may enter into an agreement with the holder of a mining or prospecting licence which is required to be ratified by Parliament, be public and be made accessible to the public.

The Bill also provides for the employment of expatriates and the recruitment and training of and transfer of skills to Kenyan citizens.

Surrender, Suspension Revocation of Mining Rights

A holder of a mineral right may apply to the Cabinet Secretary to surrender the mineral right. The Cabinet Secretary may allow such surrender, subject to being furnished with certain information.

The Bill further lists various grounds on which the Cabinet Secretary may suspend or revoke a mineral right including failure to make particular payments on their due dates.

Application of other Laws

The Bill seeks to ensure that mining activities are carried out in line with the relevant environmental laws, the Water Act, 2002 and the Occupational Health and Safety Act, 2007. Furthermore, tendering process in the case of large scale mining operations shall be subject to the laws on public procurement.

Dispute Resolution

A dispute in respect of a mining right may be resolved:

  1. by the Cabinet Secretary in the manner prescribed;
  2. by an ad hoc tribunal established pursuant to this Act;
  3. through a mediation or arbitration process as may be agreed upon by the disputing parties or as may be stated in an agreement; or
  4. through a judicial process.

The Bill also sets out the principles of compensation in case of loss or damage caused as a result of a mining activity including the deposit of a compensation guarantee bond.

Control, Supervision and Offences

Duly qualified public officers shall be designated by the Cabinet Secretary to be inspectors of mines for such jurisdictional units as may be specified in the notice.

In addition, the Bill sets out various offences whose commission attract a liability in various forms including a fine and imprisonment. A police officer of or above the rank of Inspector shall have the power to intercept and detain minerals sent by post or courier in connection with the commission of an offence under the Bill.