Keynote address by the Mining Cabinet Secretary Hon.

Najib Balala, EGH during the MBI East African Conference on 17th October 2013 at Safari Park, Nairobi. Honorable Ministers of Mineral Resources from East African Countries Organizers of this conference Distinguished Guests Ladies and gentlemen

On behalf of the Government of Kenya, and on my own behalf, I warmly welcome you to this great country Kenya and in particular this beautiful city in the sun- Nairobi. It is indeed a priviledge and honour that this is the first conference to be held in Kenya under the patronage of the ministry of Mining . To all our visitors , I say karibu sana. Kenya is a beautiful country with many attractions. May you find it fit to squeeze in your busy schedules, some time to sample some of our mining activities and institutions , not forgetting the various unique that this country has , such as the world famous Nairobi National Park . It is situated adjacent to the City the only one of its kind in the world. I also bring to you all greetings and best wishes from our President who would have wished to be here with us today but due to other equally important National Duties, he could not make it. Please receive his greetings. Ladies and gentlemen, Kenya has a number of minerals which contribute significantly to the socio-economic development . The establishment of the Ministry of Mining by the government of Kenya and some recent discoveries in this sector clearly tells it all , that indeed , the future wealth of this country lies in mining . Ladies and gentlemen The Ministry of Mining was created after the realization that the sector was bound to take a leap forward and contribute significantly to the growth of the economy. This country is endowed with vast mineral resources which have not been exploited and which if properly exploited and which are bound to make significant contribution to our success not only as a country but as a region. As the Cabinet Secretary for Mining, I look at the creation of the ministry of Mining as one that was meant to accelerate the establishment of a strong, highly profitable and sustainable business around the mining sector. This realization was in tandem with others across East Africa , majority of which are represented here today. Since my assumption of office, and in a bid to consolidate the gains made from the mining sub sector in the recent past, a number of initiatives have been proposed and some are already at advanced stages. Key among these initiatives are; Legal and regulatory review Many of the participants here are aware that our existing mining laws are old and no longer serve our contemporary needs as a country. In order to ensure the sector is well coordinated and in a bid to restore confidence, transparency and predictability in the sector, the ministry embarked on review of the mining law soon after its establishment.

Am happy to report here that extensive consultations and benchmarking were conducted during the entire process and that the document has been finalized and forwarded to cabinet for discussion. Indeed, the Kenya Chamber of Mines and other institutions were very cooperative and instrumental during the entire process through submissions and one on one discussions, which culminated in the production of a well-drafted document. It is our sincere hope that the Bill shall be enacted by the end of this year hence signaling the beginning of a new chapter in this industry. We are banking on the support of the industry to make our aspirations come true and to honor our resolve to make the sector a model for success. National Airborne Geophysical Survey It is worth noting the Governments on-going investment in improving our knowledge of the countrys resource potential. Im pleased to inform you that we have commenced plans to undertake a national Geophysical Survey with the principle aim of establishing the mineral endowment of the country. Results of the high quality aeromagnetic survey will be made public information, beneficial to interested parties such as you the investors. This survey represents a significant investment by the Government in the acquisition of data, which will have a wide range of applications for the entire country in ventures such as exploration. Licensing Ladies and gentlemen, Kenyas cadastral system is in place but more needs to be done to enhance its usefulness. In this regard, the government, through my Ministry has embarked on the development of a web based online licensing portal that will be integrated with the cadastral system. This will serve two purposes. One, it will make it possible for virtual application of mineral right and secondly, reduce incidences of double allocation of rights. This will significantly reduce incidences of conflict between parties. Additionally, this move will be transparent and easy hence reducing the long, cumbersome processes of mineral right application. Royalties Recently, the government gazetted new royalty rates applicable to different minerals across the board. This was after realization that no significant adjustment had been effected on the rates prescribed since 1999. The new rates are meant to ensure that all players benefit from the resources. More importantly is the benefit to the communities where these minerals are found. However, let me point out to the fact that these rates were arrived at after extensive consultations and considerations. I therefore ask investors to abide by the new royalties for the benefit of this country and the future generations. It is also worth noting that the proposed bill clearly states a revenue sharing formular between national, County and communities and therefore payment of royalty will ultimately positively affect the life of the common man in our villages from where the mineral wealth is originating. We all should actually feel proud whenever we touch the lives of the communities from where we derive our livelihoods.

Isnt this the essence of life ladies and gentlemen? Africa Our continent is highly endowed with mineral and other God given resources. The time has come for our nations to be united in the sustainable exploitation of these resources through such initiatives as this MBI. Our shared experiences shall strengthen us more and make our resolves to protect our resources more biding. It is indeed through such fora that we should reflect on some of the terms that have been used to describe the continent and commit to completely reverse the trends. Terms such as resource curses should not be applied while referring to Africa after the realization that the recourses are supposed to be a source of pride and contentment rather than a course. I urge all of us to play our active role of ensuring that Africa resources are exploited in a sustainable manner and for the sole benefit of the people. Lets all strive to balance between our proceeds us investors, revenue as governments and benefits accruing to the people. As a way of ensuring that lessons are shared across the east African region, I wish to propose that a roundtable meeting of Ministers responsible for Mining from the East African Countries be organized with Kenya taking the lead. Through such forums, lessons from our brothers in Tanzania can be of critical importance to the new and emerging mining countries such as Kenya and South Sudan. Additionally, I wish to propose that African countries adopt uniform legal, regulatory and indeed, fiscal regimes in relation to mining. This will ultimately ensure that investors are not treated differently across different countries and hence market the continent as a single mining investment destination. While this may sound like a far-fetched idea, it is worth noting that European countries have integrated their economies after the realization of the strength in numbers. These are indeed tough times, which call for tough decisions. Local support Ladies and Gentlemen, I want to extend my warm and special gratitudes to the Kenya chamber of Mines who welcomed me to the sector and provided very useful basic but important information to me and my new officers. They were always ready for guidance and provided the necessary insights into the sector. I want to reiterate that the government commitment to ensuring investors and other players are well facilitated to conduct business in the country. We indeed view investors as partners in this journey towards prosperity and equity. All the plans put together for the sector are meant to ensure that both parties are reading from the same script and complementing one another. Now is not the time to see one another with distrust. Lets all commit to fulfilling part of our deal and to mind the other parties feelings as we arrive at individual and collective decisions. The government has committed to operating an open door policy. This will ensure that private deals between companies are not made to the detriment of other stakeholders. We will conduct every single process in an open, transparent and accountable manner. We will listen to everybody and take their opinion seriously whenever making decisions. We shall engage you, the private sector, in every decision that touches on your area of operation. We shall respect your professionalism and strive to consider your proposals whenever we are

arriving at decisions. On your part, kindly allow governments to take their rightful roles of regulating the sector through enactment of all the necessary legislation, it is for the good of this country and the entire east African region. Closing Remarks In closing, I want to thank you again for according me your ears. As I have said, this gathering has the potential to trigger a quantum leap forward in respect of developing the East African minerals and mining industry. Indeed, in this conference hall, we have the capability and experience to lift production, to satisfy a significant percentage of the global mineral demand, to uplift our communities, to satisfy government through revenues and to make positive contribution towards mankind.

This sector is an important contributor to East African Economies and it has a long-term future. With Governments that are supportive of the mining sector, vibrant organizations such as the Kenya Chamber of Mines and a strong regulatory environment that is supportive of responsible exploration and development, Kenya and the entire East African Region has never been a better place to operate. Thank you and God bless You all