Balala cancels mining licences issued from Jan-May

August 5, 2013
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Balala also says royalties for all minerals have been increased from August 1/XINHUA-File
Balala also says royalties for all minerals have been increased from August 1/XINHUA-File
NAIROBI, Kenya, Aug 5 – The government on Monday revoked all mining licenses issued from January to May this year.

Cabinet Secretary for Mining Najib Balala said most of the licences were issued under questionable circumstances to unqualified people and companies.

The licences were allegedly awarded after the dissolution of the 10th Parliament with Balala saying that there was no proper legal framework for the process.

“We are revoking all licenses from miners and mining companies for us to understand the process used to issue them and confirm that the people they were awarded to are qualified to hold them,” said Balala.

Further, the Acting Commissioner of Mines and Geology Moses Masibo has been asked to step aside pending further investigations.

Balala added that a taskforce had been set up to investigate the matter.

“I have appointed a taskforce that will be chaired by Mohammed Nyaoga to comprehensively review licenses issued from January 2003 to date and draft recommendations within 60 days,” Balala explained

Also revoked were all licenses of mining companies that are registered under the Export Processing Zone Authority (EPZA).

The companies were allegedly operating under EPZA to evade taxes.

Balala also revealed that royalties on minerals have been increased from August 1, 2013.

“The royalties were at a low of 0.01 percent and the government was barely making any revenue from the minerals,” added Balala.

The government also increased drilling charges depending on the depth.

Drilling charges were initially calculated at a flat fee of Sh800 regardless of the depth.

The first 50 meters of depth will now be charged at Sh8,000 and the fee will increase by a Sh1,000 for every 50 meters.

“The fee beyond 400 meters of depth will be negotiated,” Balala said.

Balala further announced that they have finalised the Mining Bill which will now be forwarded to the Cabinet for consideration.

The bill seeks to establish a National Mining Corporation where all mining companies have to register.

Also included in the law is the creation of a National Mineral Certification Laboratory where all testing and sampling will be done.

Previously all tests were done abroad which was too costly for the government.

“Our target this year is to generate Sh10 billion by simply streamlining the industry,” added Balala.

He further issued a stern warning to all mining companies in regard to announcements.

“Prior to making any public analysis, projections or estimates the mining company should seek approval from the ministry 21 days before the date of announcements,” Balala explained that this will ensure no unnecessary expectations are created.

The new regulations will ensure that there is a level playing field in the mining industry.

The Ministry of Mining recently gained its independence from the Ministry of Environment after the Jubilee government took office.

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