The Kenyan mining law and its accompanying regulations manage to be both thorough and vague at the same time. Whilst almost all aspects of exploration and mining operations are addressed and regulated, the sheer abundance of discretion afforded to the Cabinet Secretary under the legal framework leaves the reader in little doubt that the State shall play a major role in the success or failure of any investment. Only those with a strong appetite for risk would look towards Kenya as a possible mining destination.
In Kenya, agriculture, tourism and manufacturing have traditionally been key industries and the country is recognised as a hub for transportation, finance and communication within East Africa. The mining industry is, at present, an insignificant part of the country’s economy, responsible for around just 1% of GDP, though the government believes it has greater potential. Kenya is the world’s third largest producer of soda ash, and it also has material fluorite and titanium deposits. Other mineral resources include diatomite, coal, gold, limestone, niobium, manganese, iron ore, gypsum and gemstones- with rubies the most common and widely exported. Considerable oil deposits have also been discovered in the north of the country.
Since 2015, the Kenyan Government has embarked on a plan to develop the mining sector and attract greater investment in the hope that the industry will grow to contribute between 4% – 10% of the country’s GDP. In pursuit of this goal, a new legal framework was established between 2016 – 2017. The government will also need to work hard to overcome investor perceptions, which still have in mind Kenya’s mass licence revocation programme, which commenced in 2012 and led to 65 Prospecting and Mining Licences being revoked in 2015, as well as various disputes over royalties that have plagued the industry. These factors can and do cause lasting damage to jurisdictions which increasingly depend upon certainty of title to attract new investment. Whether or not Kenya can overcome these challenges remains to be seen.