ࡱ> [ 4bjbj kΐΐ,+**mmmmm$P|],yy,,,,,,,${.1>(,m(,mm=,PPPmm,P,PP(*_RN)+S,0,d)6[1^[1,*[1m*TP(,(,P,[1* 3: MINING INVESTMENT ROAD MAP Background Kenya is one of the Eastern African countries that is much endowed with occurrence of different types of minerals e.g. gemstones, gold and industrial minerals (titanium ores, gypsum, iron ore, limestone, diatomite, fluorspar, vermiculite, soda ash or trona, carbon dioxide etc). All prospecting and mining activities in Kenya are regulated under the Mining Act Cap. 306 of the Laws of Kenya which is currently being reviewed. In order for one to prospect for or mine minerals, he or she has to fulfill all the requirements stipulated in the said Act. These requirements entail that the investor has first to acquaint himself or herself with the provisions of the Mining Act. He or she will then be issued with a Prospecting Right at a cost of Kshs. 250/=. The Prospecting right will enable the prospector to identify a potential area over which to apply for a prospecting or an exploration license. However, before prospecting for minerals in any area, he or she will be required to deposit Kshs. 2,000/= with the Provincial Commissioner in charge of the Province in which the targeted area is situated. After identifying the mineral potential area, the prospector is required to apply for a license to now undertake detailed geological investigations to qualify and quantify the mineral deposits. The different types of licences that can be issued as indicated in the Mining Act are:- Location Exclusive Prospecting License Special License The smallest type i.e. a location is made up of claims. A claim is allowed over an area of less than 200m by 250m, whose annual fees is kshs. 100/=. A location can have a maximum of ten (10) claims and one is allowed a maximum of eight (8) locations in any one given administrative district. For other licences i.e. an exclusive prospecting license and a special license, the fee is Kshs. 250/= per square kilometer subject to a minimum of Kshs. 10,000 (ten thousand shillings). The other additional cost here include county council single business license and consent fees and landowner compensation expenses which currently are not standardized. In order to mine, the licensee will be required to acquire a mining lease. The prerequisite for obtaining lease include preparation of a mine feasibility report, undertaking an Environmental Impact Assessment (EIA) Study in accordance with the requirement of the Environmental Management and Co-ordination Act No. 8 of 1999 and submission of a cadastral survey of the area applied for. These definitely have cost elements which the investor has to meet. Some of the elements for the requirements could be undertaken concurrently to shorten the period. An investor can also wish to directly trade in minerals by acquiring the relevant mineral dealers licences under the Mining Act Cap. 306, Trading in Unwrought Precious Metals Act Cap. 309 and the Diamond Industry Protection Act Cap. 310. When an investor has started production and wants to export, the Department processes his or her exports through export permits free of charge. This also applies to a licensed mineral dealer. For detailed information, the investors can purchase a copy of the Mining Act from the Government Press for their perusal and if they need any clarification, contact the Commissioner of Mines and Geology. Here below is a table showing the summarized procedures for acquisition of the various licences. A SUMMARY OF THE MINING INVESTEMENT ROAD MAP TYPE OF LICENCERIGHTS CONFERREDPROCEDURESTIME FRAME ( APPROX.)COST (KSHS.)1.Prospecting right (PR) (renewal annually subject to payment of the 250/= renewal fee)For identifying potential mineralized areas.Purchase of Mining Act and acquainting oneself with its provisions & regulations Issuance of an introductory letter to Provincial Commissioners office of area of interest and payment of Kshs. 2,000/= cash deposit at the PCs office. Issuance of the prospecting right on payment of Kshs. 250/= upon filling of the necessary form (Form 1).1-2 days 1-2 days (travel consideration) < hour232/= 2,000/= plus travel costs (500-10,0000 depending on mode of transport 250/= Total 2-4 Days2482 Direct 500-10,000 Indirect2.Mining Locations (Renewal annually subject to satisfactory performance and payment of renewal fees)To carry out detailed geological investigations to quantify the mineral deposits over small areas ( in unclosed zones up to 4sq.km per district) One can be authorized to undertake limited mining on establishing a deposit and after seeking authority from the CMG besides fulfilling conditions for mining. Have a valid prospecting Right as in 1 above Get land owner consents Survey and peg/stake the area Get County Council consents in case of trust land. Apply for the registration of the areas by filling Form 8 and seeking and enclosing sketches, certificates of business registration, etc. Applied areas are then checked on ground before being recommended for approval to the Prospecting and Mining Licensing Committee which sits quarterly. Issuance of the necessary certificates (titles) on payment of fees. 2-4 days 1-7 days 1-4 days depending on size & No. of locations 1-7 days 1 day 2 weeks to 3 months 1-2 weeks2461 Direct 500-10,000 Indirect Indirect cost varying and negotiable 20,000-100,000 Indirect cost varying and negotiable 5,000-30,000 Indirect cost varying and negotiable 5,000-30,000 Nil Nil Direct 100-8,000 depending on No. of claims in a district.  Total1-3 monthsDirect 2561-10,461 Indirect 40,500-132,0003.Exclusive Prospecting Licenses (EPL)To carry out detailed geological investigations to quantify the mineral deposit over large areas in unclosed zones. (issued for 1 year and renewable up to 5 years)Have a valid Prospecting Right. Consents from land owner Consents(s) form County Council (s) in case of trust land. Document preparation i.e sketch plans and area description, proposed work programme and expenditure proposals Apply for the Exclusive prospecting license by filling Form 6 and enclosing documents in (4) above, companys registration certificate, financial statement, etc. Application is checked before being recommended to the Prospecting and Mining Licensing Committee which sits quarterly. Application is published in the Kenya Gazette for any objections within 30 days from the date of publication. If no objection, license document prepared upon payment of necessary fees. 2 4 days 1 7 days 1 7 days 1 -2 days 1 day 1 3 months 1 2 months 1 2 weeksDirect 2461 Indirect 500-10,000 Indirect cost 20,000 100,000 and over for big areas 10,000 30,000 and more if area includes several councils 3,000 or more Nil Nil Direct; 5,000 10,000 Direct; Registration 100 Preparation 2000 Fees 250 per sq. km. Minimum 10,000Stamp duty at lands office.2 days 1 weekDirect 105 Execute a performance bond equivalent to annual exploration expenditure Total2 6 monthsDirect Minimum 19,561 (more depending on acreage) Indirect 30,000 133,000 or more4.Special Licenses (S.L) Issued normally for 2 years subject to renewal (s)To carry out detailed geological investigations to quantify mineral deposits over closed zones (No acreage limitations) One can be allowed limited mining.Same procedures as for EPLSSame as for EPLSSame as for EPLS5.Mining Lease or Special Mining LeaseRight to mine the mining deposits established under proceeding exploration licences i.e. mining locations, EPLs and SLsUndertake mining feasibility study on the established mineral deposit. Undertake cadastral survey of the deposit area by a registered surveyor and have it approved by the Director of Surveys. Undertake an Environmental Impact Assessment Study (EIA) for the Mining Project, Environmental Action Plans, etc approved by NEMA. EIA reports are published in the media for public comments before approval at the applicants cost. Undertake compensation survey estimates, negotiating rates with the land owners in case of private land. Come up with compensation agreements. Apply for the mining lease/special mining lease by filling Form 18 and enclosing mining feasibility study report, approved cadastral survey by the Director of Surveys, EIA and Environmental Action plans (EMPs) approved by NEMA, compensation agreement with land owners, companys registration documents, financial capability, etc. The application is checked before being recommended to the Interministerial Prospecting and Mining Licensing Committee which sits every three months. Application is published once in the Kenya Gazette and three (3) times in a local news paper at intervals of not less than a week to invite any objections within 90 days from the date of last publication, at the cost of the applicant. Carry out compensation exercise to the land owners for private land parcels. Issuance of the mining/special mining lease followed by stamp duty at lands office. 1-6 months 1-2 months depending on acreage 3-6 months or more 1-3 months 1-3 months 1-3 days Not less than 3 months Between 3-6 months Within a monthSeveral hundred thousands or more Several hundred thousands or more Nil Several hundred thousands Several hundred thousands or millions depending on size and development on land parcels. Annual rent is Kshs. 150 per hectare. Payment of the NEMA restoration deposit. Total Within a year or moreSeveral hundred thousand to several millions depending on whether the land is governments or private6.Mineral dealers license Issued for calendar year (renewable)To trade in minerals. (Buy and sell locally or export)Apply for the license indicating type of minerals and trade (e.g. export or local trade for some minerals), enclosing experience, physical address of a premises (office), financial capability, registration documents in case of a company, etc. Stamp duty at lands office1-2 days 1-4 daysAnnual fees, 20,000/= for general minerals, 350,000/= for dealers/ export license for precious metals, 350,000/= for dealers & export license for diamonds 105/=7 Export permit. Given per particular mineral consignmentAuthority to export a particular mineral consignmentFill and submit 5 copies of export permit form attaching invoice and address of consignee. Customs documentation is done by the consignor. The mineral consignment is inspected and ascertained before authorization. Approval within a few minutes 1-2 days Authorization within a few hours to a day Free Purchase of customs seal for precious at Kshs.30/= Free  Total (A few hours to a day)  Free      PAGE \* MERGEFORMAT 8 '(MNi n    ! 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