MEDIA BRIEFING ON THE MINING ACT 2016

15TH JUNE 2016

MINISTRY OF MINING
Hon. Dan Kazungu
Cabinet Secretary

MINISTRY MISSION:

To create a World-Class minin

g jurisdiction

ESTABLISHMENT
The Ministry was the only new Ministry to be e
stablished by His Excellency the President, Uh
uru Kenyatta on the 24th of April 2013.
It was formed out of the realisation that the ex
tractive sector can and should be a key driver i
n the economic transformation of the country
by tapping on existing and potential opportuni
ties.

MINISTRY FUNCTIONS
The Ministry is the custodian of the countrys e
xtractives policy that includes mining, geother
mal, oil and gas

STATE OF THE MINING SECTOR

The Mining and Quarrying sector is the 2nd Hig
hest Growth Sector having grown by 14.7%
Overall Value Mineral output grew from Ksh 21
BN in 2014 to Ksh 24BN in 2015
The sectors contribution to GDP remains at be
low 1% (0.9%) however the Ministry has a goal
to grow that to 10% by the year 2030
Kenya Economic Survey 2016

SIX PACK INITIATIVE

In order to achieve a contribution of 10% to th
e GDP, the Ministry embarked on an initiative
aimed at leap frogging the mining sector know
n as the Six Pack Initiative
It is through the Six Pack Initiative that all of th
e sectors priority projects are channeled

SIX PACK INITIATIVE

Sector Six Pack Initiative comprises of
1. Development of a 20 year Mining Strategy
2. Minerals and Mining Policy - Passed by Cabinet 1s
t
April 2016
3. Mining Act
4. Mining Act Regulations
5. Kenya Mining Fiscal Regime
6. Credible Geological Data and Information

Airborne Geophysical Survey

National Geodata Bank
World Class Laboratory
Library

MINING ACT 2016

The Mining Act 2016 was passed by Parliament
on the 22nd of April 2016, assented by H.E the
President on the 6th of May 2016 and effective
ly commenced on the 27th of May 2016

MINING ACT 2016

The new act is arguaably the most progressive
mining law in Africa.
This is because the law is the latest to be enact
ed in the continent building upon three previo
us generations of mining codes in Africa.

CHRONOLOGY OF MINING LEGISLATION

S
IN AFRICA
First Generation (mid 1980s and the 90s)

Featured State withdrawal or privatization that wer

e deemed necessary to attract FDI in the period in
which African states were undergoing Structural A
djustment Programs that were led by the IMF and t
he World Bank.
The 1986 Ghanaian law was among the first of thes
e laws.

CHRONOLOGY OF MINING LEGISLATION

S
IN AFRICA
Second Generation (in the early to mid-19
90s)

These were laws that were modelled after the Gha

naian law and involved an increasing recognition o
f the need for certain forms of regulation, notably
with respect to the environment, with responsibilit
y for this assigned mainly to private actors.
Examples are the now repealed 1995 Mining Act of
Zambia and the 1995 Guinea Mining Code.

CHRONOLOGY OF MINING LEGISLATION

S
IN AFRICA
Third Generation (late 1990s)

These explicitly recognized the role of States in faci

litating as well as regulating FDI and was largely en
couraged by the World Bank.
These laws provided lower royalty rates for exports
and a variety of incentives such as tax exemptions
and a waiver on import duties.
Examples are the 1999 Mali & Madagascar mining l
aws and the 1998 law of the United Republic of Tan
zania.

CHRONOLOGY OF MINING LEGISLATION

S
IN AFRICA
4th Generation (2009 onwards)

These laws were the ones that were enacted after the African
Union ratified the Africa Mining Vision in 2009 that provided
a comprehensive framework for the inclusion of extractive se
ctors in the social economic development of the continent.
The laws feature principles of Transparency and accountabili
ty as well as the tenets of inclusion contained in the Africa Mi
ning Vision. The Mining Act 2016 falls under this category.
The Mining Act 2016 embodies the values and principles as e
nshrined in the Constitution of Kenya 2010 as well as the asp
irations set out in the Kenya Vision 2030.

MINING ACT 2016

HIGHLIGHTS
Transparency and Accountability
Public online register of mineral rights (Section 191
& 192)
Publication of Mineral Agreements (Section 119)
Regulations on reporting on revenues paid and the
sales & production values (Section 119 (3)
Publication and notification on applications for mi
neral rights
Notification to land owner/occupier, Community & Count
y Government Section 34(1)
Notification in the Kenya Gazette - Section 34(2)

MINING ACT 2016

HIGHLIGHTS
Revenue Sharing and Shared prosperity
Revenue Sharing Formula (Royalties) Section 183
(5)
70% to the National Government
20% to the County Government
10% to the community where the mining operations occ
ur

10% Free Carried Interest for the Government Se

ction 48
20% Local Equity Participation through listing in th
e Stock Exchange Section 49

MINING ACT 2016

HIGHLIGHTS
Protection Land Rights
Consents required over Private Lands - Section 37
Consents required over community land - Section
38
Requirement to produce proof of mineral rights w
hen required to do so by any lawful owner or occu
pier Section 151
Right to graze livestock and cultivate land Section
152

MINING ACT 2016

HIGHLIGHTS
Local Content, Capacity Building and Tech
nology Transfer
Requirement for the submission of programmes fo
r training and recruitment of citizens - Section 46
Preference in employment for community and citiz
ens Section 47
Preference for local products in procurement by ex
ploration and mining companies - Section 50

MINING ACT 2016

HIGHLIGHTS
Investment promotion for wealth and job
creation
Protection of investments Mineral Agreements
Section 117
World class Licensing Regime

Reconnaissance Licence
Prospecting Licence and permits
Retention Licence and permits
Mining Licence and permits

Access to data Section 29

MINING ACT 2016

HIGHLIGHTS
Predictability and level playing field
Tendering of Mineral Rights Section 14
First come first served on Applications Section 56
Clear mechanisms for surrender suspension and r
evocation of mineral rights Part VIII
Clear mechanism for handling compensation and
dispute resolution Part IX

MINING ACT 2016

HIGHLIGHTS
Institutions, processes and Procedures
Mineral Rights Board Section 30
National Mining Corporation Section 22
Minerals and Metal Commodity Exchange Section
28

MINING ACT 2016

HIGHLIGHTS
Environment Health, Safety and complianc
e - Part XI
Environmental Laws given precedence
Compliance with Occupational Health and Safety
Institution of environmental protection bonds

MINING ACT 2016

HIGHLIGHTS
Inclusion
Recognition and permitting of Artisanal Miners S
ection 92-100
Small Scale Miners
Exploration
Large Scale Mining Companies
Dealers in precious minerals
Mining Services
Africa Mineral Trading Hub (Minerals and Metals C
ommodity Exchange) Section 28

Asante
Thengiu
Chawucha
Namvera

Nesa
Thank You
Mbuya
Mun
o

Mahadsani
d
Ni muvea
muno

Erokamano

Kongoi

40