MINING FIRMS BLAME POOR SHOWING ON INSECURITY, LOW INVESTMENT

Existing and prospective mining companies have to grapple with challenges such as poor road network with communication and difficulties of accessing cheap reliable electricity in remote areas.

Insecurity is the newest headache to Kenya-based companies in their quest to carry out geophysical surveys for prospecting gold and other minerals.

Now the Kenya Chamber of Mines (KCM) wants the Inspector General of Police Joseph Boinett to address security challenges in arid and semi-arid areas, where these firms are prospecting for minerals.

“We plan to engage the Inspector General with a view to developing a road map guaranteeing security of equipment and personnel for exploration firms to carry out geophysical surveys with other work programmes,” said KCM chairman Adiel Gitari.

The lobby group, representing players in exploration, mining, mineral trade and specialised service providers, said that without enhanced security, Kenya will not unlock the minerals ores potential currently existing in the ASALs.

Mr Gitari said the option of the Kenya police setting up a unit to provide security to firms working in West Pokot, Turkana, Marsabit and Samburu will be pursued in order to raise foreign direct investment to $966 million.

“Insecurity is a major concern hindering minerals prospecting. Out of every 100 licences for exploration, only two can go into production as it is a capital-intensive, high-risk business requiring heavy investment,” he said.

Fraser Institute of Canada in March this year ranked Kenya the third least attractive country for global mineral investments. Kenya emerged in position 120 out of 122 in the attractiveness survey report of 2014.

“Kenya and Bulgaria experienced large drops from 79th and 57th (out of 112) in 2013 respectively,” it said. Malaysia was last, followed by Hungary, Kenya, Honduras, Solomon Islands, Egypt, Guatemala and Bulgaria.

The survey examined security, infrastructure, trade barriers, quality of geological database, legal system, uncertainty pertaining to administration of current regulations with protected areas and disputed land claims, also socioeconomic and community development conditions.

The Kenya Mining Investment Handbook 2015 published by the Ministry of Mining shows that the country has gemstones, gold, titanium, gypsum, iron ore, limestone, diatomite, vermiculite and manganese among other minerals.

Though the country has not undertaken a detailed survey of minerals occurrence, it has signed a memorandum of understanding that allows a Chinese firm to carry out an air survey and establish a database to be used by local and foreign investors in the extractives sector.

Kenya’s mining sector in 2014 attracted about $644 million in FDI but the amount is not expected to increase substantially this year due to weak global commodities prices.

Investors are waiting for the Mining Bill, which is in the National Assembly, for a new regulatory framework.

Kenya is using the Mining Act Cap 306 of 1940 to regulate minerals exploration but the Mining Bill, once enacted, is expected to make the country an attractive investment destination.

Mr Gitari said existing and prospective mining companies in the ASALs have to grapple with challenges such as poor road networks and difficulties of accessing cheap reliable electricity in remote areas.

“The government has to fast track using of coal in Kitui county and natural gas discovered in Block 9 for generation of cheap reliable electricity to encourage investment in mineral ores processing zones in Kenya,” he said.

A study done by Centre for Human Rights and Policy Studies in 2014 found some counties are rich in resources but marginalisation, poor infrastructure and insecurity continue to discourage investment.

The East African