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Mining Investment Road Map

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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:-
i. Location
ii. Exclusive Prospecting License
iii. 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.

Mining_Investment_Road_Map (2) (1)

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