Mining in Kenya: A Sleeping Giant Due to Lack of Policies

The mineral potential in Kenya is being undermined by poor government policies but could be a sector that opens up the economy for the East African nation, stakeholders have said.

Speaking at the opening of their USD 5m facility in Nairobi, Greg Jackson the General Manager, East Africa region at Panafrican Equipment Group, said that countries that have succeeded in mining have good policies in place and Kenya could learn from such countries.

Apart from construction and farming, the company provides mining firms with equipment in the regions they are in.

Issues such as land compensation, environmental policies around the environment and revenue split are some of the issues that have cropped up in many mining expeditions in Kenya.

Base Titanium, the Australian company has had to contend with land issues in Kilifi where they have been mining titanium. In Turkana, the oil exploration and extraction has brought friction on revenue share with the county of Turkana, the locals and the national government.

“Kenya is very rich in mineral wealth and also petroleum. Kenya has coal as well. There are also rare earths which are an increasingly important type of minerals. So the country has an upside economically in mining alone,” Jackson told WeeTracker.

“The mining that has been done has been relatively low scale compared to countries that have large mines,” he added.

According to the Kenya Chambers of Mines Kenya has deposits of limestone, coloured gems such as Tsavorite, Iron ore and gold.

However, the Fraser Institute released a report in 2018, ranking the country as the second-worst country for mining investments in the world.

“When considering both policy and mineral potential in the Investment Attractiveness Index, Guatemala ranks as the least attractive jurisdiction in the world for investment. This year, Guatemala replaced the Argentinian province of Jujuy as the least attractive jurisdiction in the world. Also in the bottom 10 (beginning with the worst) are Kenya, Mendoza, Chubut, Mozambique, Bolivia, Venezuela, Romania, China, and Nicaragua.”

Jackson said that the country is in competition with other mineral-rich countries such as Ghana, South Africa and Tanzania in attracting investments from other countries into mining. This means that Kenya has to put itself in a favourable position to attract investments in its mining sector.

“A country with successful mining strikes the balance that national growth is taken care of and that there is a benefit to the local economy so that the rising tide raises all the ships,” he added. “Countries have to assess the opportunity versus the return in those sectors.”

Feature Image Courtesy: Africa is a Country