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INTRODUCTION
The Mining Act 2016 was enacted to replace the Mining Act of 1940 which
was developed from the colonial Mining Ordinance of 1933 and had been
overtaken by time. The law was further developed to implement the
Constitution of Kenya 2010 as it relates to management of natural
resources in the country.
The Constitution of Kenya has a number of provisions that directly affect
the governance of the minerals sector. The Mining Act is therefore
modelled to reflect these provisions. They include the following:
Article 60 - Land Use: Provides that land should be held, used and
managed in a manner that is equitable, efficient, productive and
sustainable, and in accordance with a set of principles including
equitable access to land, security of land rights and sound conservation
and protection of ecologically sensitive areas among others.
Article 62(1) (f) - Definition of Land: Defines land into various categories
including public land (excluding public land held by counties) which is
vested and held by the national government in trust for the people of
Kenya. and specifically determines that public land includes all minerals
and mineral oils as defined by law.
The Mining Act, 2016 applies to a specific range of minerals that have
been specified in the First Schedule of the Act. The Act categorically states
that it does not apply to petroleum and hydrocarbon gases. The minerals
under the Act have been put into seven main categories including:
a) Construction and Industrial Minerals: These are minerals that are used
in the construction industry as well as those that are applied for
various industrial purposes. Examples include gypsum, diatomite,
limestone and marble for construction purposes, as well as quartz and
garnet for industrial purposes. For the whole range of minerals in this
category, see the First Schedule in the Act.
b) Precious Stones: These are valuable minerals mostly used for
ornamental purposes and include diamonds, emeralds, rubies,
sapphires and green garnet (Tsavorite).
c) Precious Metals Group: This category contains a number of precious
metals including gold, osmium, palladium, platinum, iridium, silver,
rhodium and rhuthenium.
d) Semi-Precious Stones Group: This category includes a range of
minerals such as Agatha, Amazonite, Amber, Amethyst, Jade, Opal and
Tourmaline among others. The full range of minerals in this category is
available in the Act.
e) Base and Rare Metals Group: The minerals in this category consist of a
range of base metals and rare metals including Antimony, Arsenic,
Bauxite, Copper, Cobalt, Iron, Lead, Magnesium, Manganese, Mercury,
Niobium, Rhodium, Radium, and Rare Earths among others. A
complete list is available in the Act.
f) Fuel Minerals Group: This category includes non-nuclear minerals such
as coal as well as nuclear minerals including source material
containing uranium and thorium.
g) Gaseous Minerals: This category has various gaseous minerals that are
used for commercial purposes including carbon dioxide, helium, coal
seam gas and also includes water.
INTERPRETATION OF IMPORTANT TERMS
The Act contains a number of key terms that may be useful in the
understanding of the various issues that have been addressed within it.
Key terms include:
Application:
a) an application for the grant, renewal, transfer, assignment or
surrender of a mineral right; or
b) an application for the grant or renewal of a mineral dealers licence
or a diamond dealers licence;
Artisanal Mining: traditional and customary mining operations using
traditional or customary ways and means.
The Mining Act, 2016 grants the general powers of administration to the
Cabinet Secretary. In the exercise of the powers of administration under
the Act, however, the Cabinet Secretary is subject to a set of principles
under the Constitution of Kenya. These include:
Article 69(1) (h) This principle requires the State utilise the
environment and natural resources for the benefit of the people of
Kenya.
The Mining Act, 2016 gives powers to the Cabinet Secretary to perform a
number of key functions including development of regulations, declaration
of areas for small-scale, artisanal and tendering, restriction or exclusion of
areas from operations as well as the power for declaration of strategic
minerals. These are explained below.
I.
V.
VI.
The Mining Act establishes two key directorates to help in enabling access
to services and the general administration of the minerals sector. These
include the Directorate of Mines and the Directorate of Geological Survey.
These are tasked with various roles in the implementation of the law.
I.
The Mining Act has established the Directorate of Mines which is headed
by a Director appointed through the Public Service Commission. The Act
charges the Cabinet Secretary with the responsibility to ensure reasonable
access to the services of the directorates established in all parts of the
country, so far as it is appropriate to do so having regard to the nature of
the services offered.
Powers of the Director of Mines: The Mining Act authorizes the director
or a duly authorised official, to enter upon any land, license area,
permit area or mine at any reasonable time for the purposes of:
a) Inspecting such area, premises or workings and examining
prospecting or mining operations or the processing, refining and
treatment of minerals being carried out at the site;
b) Ascertaining whether the provisions of the Mining Act are being
complied with;
c) Taking soil samples or specimen of rocks, ore, concentrates,
tailings or minerals situated upon such area, premises or workings
for the purpose of examination or analysis;
d) Examining books, accounts, vouchers, logs, journals, documents
or records of any kind required to be kept under the Mining Act,
the terms and conditions of any mineral right, permit, licence or
mineral agreement and taking copies of such books, accounts,
vouchers, documents or records; or
e) Obtaining such other information as deemed necessary.
The Mining Act has also established the Directorate of Geological Survey,
which, through the Principal Secretary is responsible for key tasks. It is
also headed by a Director. The functions of the Directorate, as exercised
through the Director include:
a) The day to day operation of the Directorate of Geological Survey;
b) Providing geoscience expertise and data to the government on all
matters related to geology and the development of minerals;
c) Undertaking scientific surveys (these include geological, geophysical,
geochemical,
seismological
and
hydro-geological
surveys),
investigations and mapping aimed at defining the character and
distribution of rocks and superficial deposits and determining the
mineral potential of Kenya;
d) Conducting geo-environmental studies;
e) Monitoring of seismic activities and mapping of areas of potential geohazards;
f) Conducting geological analysis and valuations;
g) Developing a national repository of geo-science information through
the compilation, publication and dissemination of information and data
concerning the geology and mineral resources of Kenya and facilitate
access to this information by the general public;
h) Promoting private sector interest and investment in mineral
exploration by providing geological information and services to
prospective investors;
i) Maintaining a laboratory, library and record facilities as may be
necessary for the discharge of the functions
j) Providing geoscience expertise in evaluations of prospecting and
mining applications;
k) Providing support to the Director of Mines in relation to exercising
regulatory administration and supervision over all prospecting and
mining operations;
l) Undertaking audits of mineral right holders geological sampling and
assaying processes; and
m) Performing any other function as may be assigned by the Cabinet
Secretary, this Act or any other written law.
e) Dig up any land and fix any post, stone, mark or object to be used in
the survey of such land.
In the exercise of powers under this law, the Director or an authorised
person are expected to ensure little damage or inconvenience to the
legitimate owner or lawful occupier of the land. A person whose land or
property is damaged as a result of the exercise of the powers of the
Director of Geology is be entitled to fair, prompt and full compensation for
such damage in accordance with the Mining Act.
MINING INSTITUTIONS AND BODIES
The Mining Act has established a number of key institutions that are
charged with implementing the key functions as has been intended for
governance of mineral resources. These institutions include the National
Mining Corporation, the Minerals and Metal Commodity Exchange, and the
Mineral Rights Board.
THE NATIONAL MINING CORPORATION
The Mining Act establishes the National Mining Corporation (NMC) which is
to be the investment arm of the national government in respect of
minerals. Its main functions include:
a) Engage in mineral prospecting and mining; and any other related
activities;
b) Invest on behalf of the national government;
c) Acquire by agreement or hold interests in any undertaking,
enterprise or project associated with the exploration, prospecting
and mining;
d) Acquire shares or interest in any firm, company or other body of
persons, whether corporate or unincorporated which is engaged in
the mining, prospecting, refining, grading, producing, cutting,
processing, buying, selling or marketing of minerals; and
e) Carry on its business, operations and activities whether as a
principal agent, contractor or otherwise, and either alone or in
conjunction with any other persons, firms or bodies corporate.
The NMC is managed by a board which comprises of a number of persons
including a chairman, appointed by the President; the Principal Secretary
responsible for mining or a representative; the Principal Secretary
responsible for the National Treasury or a representative; the Principal
Secretary responsible for trade or a representative; and three other
persons who are not employees of the corporation. The NMC is headed by
a competitively recruited Chief Executive Officer who is the accounting
officer, secretary to the board as well as being responsible for the day to
day administration and management of the affairs of the NMC. The law
finally places an obligation on the Cabinet Secretary to make Regulations
generally for purpose of the operationalization of the Corporation.
MINERALS AND METAL COMMODITY EXCHANGE
The Mineral Rights Board is established under the Act and has a number
of key functions including advising and giving recommendations to the
Cabinet Secretary on:
a) Granting, rejection, retention, renewal, suspension, revocation,
variation, assignment, trading, tendering, or transfer of Mineral
Rights Agreements;
b) The areas that are suitable for small scale and artisanal mining;
c) The areas where mining operations may be excluded or restricted;
d) The declaration of certain minerals as being strategic minerals;
e) Cessation, suspension, or curtailment of production in respect of
mining licenses;
f) Fees, charges and royalties payable for a mineral right or mineral;
and
g) Matters that are required to be referred to the Mineral Rights Board
under the Mining Act, 2016.
The administration of the Mineral Rights Board is comprised of a
number of key persons including the following:
a) A chairperson with demonstrable knowledge and experience of the
minerals and mining sector, who is appointed by the President;
b) The Principal Secretary responsible for matters relating to mining;
c) The Principal Secretary responsible for the National Treasury;
d) One person who has relevant qualifications or experience in mining,
geology, geophysics or engineering, nominated by the Council of
Governors;
e) The Chairperson of the National Land Commission;
f) The Director of Mines who also serves as the secretary to the
Mineral Rights Board;
g) The Director of Geological Surveys; and
h) Two persons with professional qualifications and experience in the
mining industry.
MINERAL RIGHTS AND THEIR REGULATION IN THE MINING ACT, 2016
The nature of rights in the Mining Act, 2016 are in the form of various
licenses and permits that are given depending on whether the operation is
of a large-scale, small-scale or artisanal nature. These are summarised in
the following part.
a) Large-Scale Operations: In the case of large operations, the mineral
rights given require four key licenses including a reconnaissance
The Mining Act, 2016 has placed a number of key conditions for the grant
of mineral rights. For any mineral right to be given, conditions concerning
the following must be fulfilled:
a)
b)
c)
d)
e)
f)
g)
The Mining Act regulates large scale mining and requires four main
licenses for the acquisition of large scale mineral rights. The next part
shall be looking at the various steps taken in acquiring mineral rights
under this category.
Reconnaissance Licenses
This is the first license acquired under large scale operations and covers
an area of up to 5000 contiguous blocks. An application for this license
requires the provision of key information including the area in respect in
which the reconnaissance licence is sought; the proposed programme for
the reconnaissance operations to be carried out; details of the technical
expertise and financial resources to be used in the conduct of operations;
a plan outlining the proposals for procurement of local goods and services
by the applicant; and any other information required by the Cabinet
Secretary as may be prescribed by regulations.
A reconnaissance license is granted by the Cabinet Secretary upon the
recommendation of the Mineral Rights Board. The criteria for such grants
include granting the license if the size area of land on which the
reconnaissance licence is sought is reasonable and in line with the
programme of operations proposed by the applicant; the applicant has
adequate financial resources, technical competence and mining industry
experience to carry on the proposed programme of reconnaissance
operations; the local product plan by the applicant with respect to the
procurement of locally available goods and services is acceptable; and the
local employment plan by the applicant with respect to employment and
training of Kenyan citizens is acceptable.