MINISTRY OF MINING

Right of Reply
The Ministrys attention has been drawn to an article appearing in todays Daily Nation page 16National News. The article has erroneously said that Mining is not benefitting Kenyans.
The Ministry of Mining welcomes the concern of leaders, communities and all Kenyans with
regard to benefits accruing from Mining and the larger extractive industry. These concerns are
valid and of utmost priority to the Ministry. Indeed, the Cabinet Secretary for Mining, Hon Najib
Balala has put safeguarding of Kenyas mineral wealth as his priority, and has variously been
quoted in public as saying that he is rising to the challenge of the responsibility of securing the
mineral wealth of Kenyans.
Hon. Balala was further quoted raising concerns that Africa will continue to grapple with
poverty if we're not careful in managing the extractive industry. He has said that Mining must
be people-centered to avoid community conflict, adding that Kenyans must benefit from the
minerals that we have and that to avoid mineral wealth being a curse people need to see the
changes its bringing.
These are clear statements to the fact that the Ministry of Mining is committed to addressing the
concerns of Kenyans. This is explicitly evident in the following measures which the Ministry has
put in place to address these concerns.
Immediately upon its establishment, the Ministry embarked on putting in institutional, policy,
and a legal framework to enable the growth and realization of the countrys mining potential.
Currently, mining contributes about one per cent (1%) to the country's Gross Domestic Product
(GDP) and about four per cent (4%) of the countrys total Exports. This GDP contribution is
expected to rise significantly to three (3) per cent by 2017 and contribution to Export earnings to
rise to ten per cent (10%) by 2030 overtaking agriculture as the predominant Foreign Exchange
earner. In addition, the sector will contribute 100,000 jobs directly and indirectly over the next 5
years and spur economic growth through infrastructural development, industrial development
and foreign exchange earnings.
The Ministry has put in place the following measures to address the concerns raised by leaders in
the article;

Implementation of Kenya Constitution 2010 with regard to Minerals;

Developed a formula to share benefits accruing from mineral resources between National
and County level governments, and the local communities living in mining areas on a
70:20:10 ratio respectively. The formula ensures equitably sharing of mineral benefits
shared to spur economic development of the rural areas where the minerals occur.

The ministry aims to contribute to the National Sovereign Wealth Fund once the fund is
set up by the National Treasury. This will provide financial resources for infrastructural
development thus spuring economic development.

During the process of drafting the Mining Bill 2014, the ministry consulted widely with
key stakeholders on matters related to mining to ensure public participation

The Ministry of Mining is in the process of upgrading an Online Transactional Cadastre

Portal to promote transparency, accountability and integrity in all online applications for
mining licenses.

Mining Bill 2014

The Mining Bill 2014 combines all the currently existing pieces of legislation and will regulate
all matters on mining and create new institutions to enhance efficiency in the mineral sector. It
seeks to repeal the existing legislation relating to mining, which was enacted in 1940. The Bill is
transformational to the mining sector in Kenya. Once enacted into law, the new Mining Act will
enable the Ministry to establish a simple, clear, transparent, and predictable legal framework for
the management of mineral resources in Kenya, a development that will streamline mining in the
country and increase the contribution of mining to gross domestic product, increase employment
opportunities and spur economic growth and development in the mining areas.
The Ministry is cognisant of the fact that the minerals of this country belong to the people of the
country. With this in mind, the Ministry has captured this aspiration in the Mining Bill 2014,
spelling out clearly how benefits between the national, county and local communities are to be
shared to reduce conflict arising from the benefit sharing. The To effect this, the Ministry has
proposed putting in place a Mineral Audit Unit to help in verifying and auditing of mineral
productions, sales and royalties paid to ensure the country gets its share and the government and
the communities get their share.
Mineral Audit Unit
The establishment of this Unit will protect the country from revenue arising from evasion and
non-payment of royalties and fees and ensure the Government through Ministry of Mining get
the true value of its minerals. It will also ensure Government gets its true share of mineral
proceeds in form of royalties, fees and other charges. It will conduct research on mineral

valuation, interrogate feasibility studies and carry out research on mineral pricing at the
international markets for correct royalty calculations. It shall also advice government while
negotiating with mining companies on fiscal regimes and revisions of royalties, taxes and other
fees due to their complex nature.

Public Communications Division

MINISTRY OF MINING