NAIROBI, Kenya Aug 6 – The Kenya Chamber of Mines has condemned the decision by Cabinet Secretary Najib Balala to revoke all mining licenses issued between January and May 2013.
Adiel Gitari, the chamber chairman said the decision was uncalled for and they ought to have been consulted beforehand. He further complained that the revocation of licenses sets a bad precedent for the mining industry and discredits the eligibility of the country for potential investors.
“The decision made by Balala goes against the spirit of collaboration between the mining industry and the government. It also sets a perception that mining companies are only interested in exploiting the country’s mineral resources and not promoting the industry and the country as a whole,” said Gitari.
He said that the Cabinet Secretary did not adhere to the Mining Act as he chose to arbitrarily revoke the licenses. Gitari said the Act demands that before any license is revoked the holder ought to be given notice for them to defend their license.
He further wants the Chamber officials included in the taskforce that was set up to investigate the validity of the licenses issued.
The taskforce headed by Mohammed Nyaoga is mandated to issue a report on the revoked licenses and draft recommendations within 60 days. Gitari further added that Balala should have consulted with the chamber officials before increasing the royalty and drilling rates.
He however agreed that the rates have been low and the government needs to generate revenue from its mineral resources.
“The government must take into consideration the impact of increasing the royalty and drilling charges. The proposed rates are out of sync with international ones and the impact of this will be like killing the cow that produces the milk,” explained Gitari.
The royalties were increased from a low of 0.01 percent to a high of between two and 12 percent depending on the mineral.
The drilling charges were increased from a flat rate fee of Sh800 to Sh8,000 for the first 50 meters and an additional Sh1,000 for 50 meters in depth.
He also said that the Chamber is ready to work with the government to improve the mining industry and attract investors that will generate revenue for the country and its people.
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