HomeBusiness and policyKenya government needs to create an enabling environment for mining investment

Kenya government needs to create an enabling environment for mining investment

Dr Cedric Simonet, a mineral exploration and development consultant with Akili Minerals Services and chairman of Kenya Chamber of Mines shares his views on how the Kenyan government should move forward to encourage greater investment in the mining sector.

There are two main challenges to both local and international investment in the mining sector in Kenya.

The first challenge is the Mining Act which despite being presented as investor friendly actually has critical flaws which are currently hindering further growth of the sector.  The Kenya Chamber of Mines (KCM) is engaging with the government on these issues.

The second challenge is political interference. It is all too common to see mining projects becoming targets of individuals for their own personal motives or being caught in the cross fire between politicians with diverging agendas.

Unfortunately, this largely arises from the fact that mining is commonly seen as a “get rich quick scheme” when it is actually a high-risk long-term investment that requires stability to be able to happen and generate benefits. It is a learning curve for many.

And while there are opportunities in the country – I am a geologist, trust me –they will only be developed if the hurdles are lifted.

Discussing the role that the government can/should play in the sector, Simonet continues:

The government is like the referee of the mining game. The growth of the sector, the implementation of projects, this can only be driven by the private sector…. And the private sector knows how to do this…. But to ensure that the enabling environment is in place, the private sector can only rely on the government.

In my opinion the government must take a strong leadership position in putting in place this enabling environment by ensuring that the legislation is conducive to development, that there is clarity and stability in the rules, and that these rules are communicated at all levels.

Education and information are necessary. We badly need to see more presence of the government in resolving issues with third parties at project level.

Another key issue at the moment is the sharing of royalties between the national government, the county government and the communities. KCM has been fighting for this to happen for over 10 years.

It is now entrenched in the law but for lack of regulations it is not yet implemented. This should be a number one priority for the government and will go a long way in reducing tensions with host communities and counties.

KCM is the only private sector body that can give Kenya’s mining industry a voice and engage effectively with the government on the issues the industry is facing. In the long run, we need to transit from a situation where we are pointing out issues and advising how to correct them to a situation where the government proactively engages with us to avert issues before they occur. Prevention is always better than cure

Moving forward

There have not been any new mining projects in Kenya since Base Titanium, and almost all of my consultancy activity is currently outside of Kenya.

I have, however, retained a passion for gemstone mining and I am currently looking at several opportunities in Kenya. I believe there is a strong case for modernising the gemstone mining industry, partnering with local miners, to create sustainable production streams which can really put Kenya on the map as a reliable source of tsavorite, ruby, and other gems.

As with any mining projects, this starts with security of tenure, without which no development can be realised.

My vision for the industry is one where mining becomes part of the industrial and social landscape in Kenya, where mining does not generate suspicion or misplaced excitement, but on the contrary confidence in the same way as other economic activities such as farming of manufacturing would.

It is only on such a stable base that we will be able to build our dream of a mineral-based transformation industry with value addition.

At the upcoming Kenya Mining Forum Simonet is part of a panel discussion titled “Spotlight on the counties” which will focus on “Where are the prominent mineral deposits located that can attract investment.”

 Simonet will highlight that Kenya’s geology is very varied. Not all counties have potential for the same minerals, but all have some potential. My message will be: counties that will be able to attract and benefit from mineral investment are not those who have the most attractive resources in the ground, but those who will be able to put in place, hand in hand with the national government, the most attractive investment environment.