REPUBLIC OF KENYA MINISTRY OF MIN! PRESS STATEMENT BY HON. DAN KAZUNGU, MINING CABINET SECRETARY ON THE ENACTMENT OF MINING ACT 2016. Ladies and Gentlemen, today the country celebrates a huge leap in its efforts towards the realization of our vision 2030 and double digit growth of our economy. After a thorough consultative process through Parliament, His Excellency President Uhuru Kenyatta assented to the Mining Act of 2016, a move which has now catapulted our nation to the very top as the country with the continent’s most progressive Mining Act. ‘The Mining Act 2016 has fully embraced the spirit of our Constitution through the establishment of the principle of transparency in the sector. It will require for large scale licenses to be ratified by Parliament to ensure full disclosure of the mineral rights being issued in the country. The Act has also introduced a more robust fiscal regime that will enhance revenue collection and hence the contribution of the mining sector to the country’s Gross Domestic Product (GDP). This Act has made some guided exemptions to small scale miners and artisanal miners who depend on various extractives as a source of livelihoods. Therefore under the Mining Act of 2016, Section 7 (1), the government has put in place a formal structure to allow communities accustomed to small scale mining on their lands to continueparticipating and hence benefitting from the mining sector under this Act. This demonstrates the government’s commitment to enabling communities uplift their standards of living. This new Law has also reinvigorated the investment atmosphere by simplifying the license acquisition process under both the exploration and mining license categories. Further this Act provides guidance on effectively dealing with rogue license holders through periodic progress reporting, how they are engaging their host communities and duration of locations. The revenue sharing structure is another key highlight of this Act. Under Section 183 (1), all minerals obtained in the course of prospecting or mining operations shall be liable to royalties. This Act provides a level playing field for investors and ensures some predictability in the sector which in turn offers security to the investors, The cherry on top of the formation of this act is its strict requirements for adherence to environmental protection guidelines. It also enables the administrative arms of the ministry to periodically carry out assessments to ascertain the short and long term environmental effects of mining and ensure the conduct of sustainable mining in line sustainable development goals guidelines. Therefore as government we will be going down to the communities in the form of a community sensitization drive -over the next four weeks ahead of the formal launch- along with the members of the press with the following objectives; To educate mining communities about the Act. * To highlight the current activities on-site, which various investors are engaged-in. Page | 2© To highlight the current activities on-site, which various investors are engaged-in. The culmination of these activities will be the formal launch event which will be held in Nairobi with the aim of bringing together all stakeholders; potential investors current license holders, the civil society organizations and the community representatives. In conclusion mining is a very sensitive sector that depends on good legislation and a lot of goodwill (both political and stakeholder) in order to thrive. We will employ all instruments at our disposal to uphold the principle of this Act, and while it is not lost on us that some communities may be aggrieved in one way or another, a collective effort will see this sector realise its potential which currently stands as the second highest growth sector at 14.7%. Kenya is a regional leader and in many ways expected to set the example for others to follow, and we look forward to the opportunities that this Act provides. HON. DAN KAZUNGU M ING CABINET SECRETARY 15" June 2016 Page | 3