The Mining Bill 19th June - 2013-1

The Mining Bill, 2013

MINING BILL, 2013

A Bill for

AN ACT of Parliament to give effect to Articles 60, 62 (1)(f), 66(2) and 69 of theConstitution in so far as they apply to minerals; provide forprospecting, mining, processing and any dealings in minerals and forrelated purposes

ENACTED by the Parliament of Kenya as follows

PART IPRELIMINARY

Short title.

1. This Act may be cited as mining Act, 2013.

Scope of the Act

2. (1) This Act shall apply to minerals specified under the First Schedule.

(2) The Cabinet Secretary may from time to time, by notice of the gazette amend theFirst Schedule.

Act not to apply to petroleum and hydrocarbon gases.

3. Save for the extent provided for in this Act, the Act shall not apply to matters relating topetroleum and hydrocarbon gases.

Interpretation.

4. In this Act, unless the context otherwise requires

accruing benefits means a portion of financial and other benefaction to whichcommunities in mining areas are entitled to and shall receive from the proceeds and mining andrelated activities;

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application includes

(a) an application for the grant, renewal, transfer, assignment or surrender of amineral right under this Act; or

(b) an application for the grant or renewal of a mineral dealers licence, a DiamondDealers Licence;

"banker" includes a manager, cashier or any other officer acting in that capacity, of acompany engaged in the business of banking within Kenya and in compliance with theprovisions of the Banking Act;

benefit sharing means the distribution of a portion of proceeds of and gains derivedfrom mining and related activities to communities affected by mining operations and those inwhose locality mining takes place;

Board means the National Mining Corporation Board established under section.;

"construction minerals" includes all forms of rock, limestone, stones, gravel, sands, soils,clay, volcanic ash, volcanic cinder, or other minerals used for the construction of buildings,roads, dams, aerodromes and landscaping or similar works, and such other minerals as theCabinet Secretary may from time to time declare to be construction minerals, by notice publishedin the Gazette;

Cabinet Secretary means the Cabinet Secretary for the time being responsible forMining;

community means a group of individuals or families who share a common heritage,interest or stake in identifiable land, land based resources or benefits that may be derived fromthe land based resources;

"company has the meaning assigned to it in the Companies Act;

"diamond" includes any rough and uncut diamond;

Director of Mines mean the Director of Mines appointed under section..;

Director of Geology means the Director of Geology appointed under section

geologist means a person registered as geologist in accordance with the GeologistsRegistration Act;

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"environment" has the meaning assigned to it in the Environmental Management andCoordination Act,1999;

"environmental impact assessment licence" means an environmental impact assessmentlicence granted under the Environmental Management and Coordination Act,1999;

"excavation" means a trench, pit, shaft or other working that is related to operations undera mineral right;

"financial difficulty", in respect of a company or other body corporate, means that thecompany or body corporate

(a) is in liquidation;

(b) is the subject of a subsisting court order for its winding up or dissolution;

(c) has made a composition or arrangement with its creditors which remainsin effect; or

(d) is under a stabilization funds under government arrangements or schemes;

geology means the scientific and research aspects of the solid earth and its processes;

geological report means a report authored by geologist;

"groundwater" has the meaning assigned to it in the Water Act;

"holder", in respect of a mineral right or another licence or permit that has been granted andregistered in accordance with this Act

(a) means the person to whom the right is granted; but

(b) where such a right has been lawfully transferred or assigned, means the personto whom the right has been lawfully transferred or assigned;

industrial mineral means any naturally occurring mineral of economic value applied inthe manufacture of products or commodities as integral components thereof, to improve productquality or to protect product characteristics;

"land" has the meaning assigned to it in Article 260 of the Constitution;

"large scale operation" means a prospecting or mining operation that is a large scaleoperation in accordance with this Act;

"licence area" means the area or areas of land covered by a prospecting licence, aretention licence or a mining licence under this Act;

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liquidator means a person appointed to wind up a mining or mineral prospectingcompany, including selling off its assets;

maritime zones means the seabed, subsoil, territorial sea, the exclusive economiczone and the continental shelf as defined under the Maritime Zones Act;

"mine"

(a) when used as a noun, includes an excavation or system of excavations madefor the purpose of, or in connection with, the extraction of minerals or mineralproducts, and includes as an open-cast pit or quarry and any area where amineral is won by dredging or other means; and

(b) when used as a verb, means the carrying out of a mining operation;

member means a member of the Board appointed under section.;

"mine waste and tailings" means the residue of mining operations that includes gravel,sand, slime, or other substances that are discarded in the course of mining operations;

"mineral" means a substance formed by, or subject to, a geological process whether insolid, liquid or gaseous form occurring naturally in or on the earth or in or under water andincludes the minerals listed in Second Schedule but does not include petroleum or groundwater;

"mineral agreement means a mineral agreement entered into in accordance withsection;

mineral dealer means any entity or person licensed to buy and sell minerals in thisAct;

"mineral dealings" means

(a) buying minerals;

(b) selling minerals;

(c) bartering minerals;

(d) depositing or receiving minerals as a pledge or security: or

(e) cutting, polishing and processing minerals;

"mineral deposit" means a mass of naturally occurring minerals of economic value;

"mineral right" means

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(a) a prospecting licence;

(b) a retention licence;

(c) a mining licence;

(d) a prospecting permit; or

(e) a mining permit;

"mining area" means an area or areas of land that are covered by a mining licence;

mining bond means an obligatory payment or cash deposit that may be required ofmineral rights holder as guarantee for their due implementation of a mining programme ormining activities including site restoration;

mineral dealers permit means a mineral dealers licence issued in accordance withSection .;

"mining permit" means a permit relating to small scale operations granted in accordancewith this Act that authorises its holder to carry out mining operations;

"mines inspector" means a public officer who has been appointed as a mines inspectorfor purposes of this Act;

"mining licence" means a licence relating to large scale operations granted in accordancewith this Act that authorises its holder to carry out mining operations;

"mining operations" means an operation carried out in connection with a mine

(a) to win a mineral from where it occurs;

(b) to extract a mineral from its natural state; or

(c) to dispose of a mineral or waste substances resulting from such winning orextraction;

"permit area means the area covered by a prospecting permit or a mining permit;

"petroleum" has the same meaning as in the Petroleum (Exploration and Production) Act;

"precious minerals" means

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(a) precious stones, which include: diamond, emerald, ruby, saphire, and any otherprescribed precious stones; and

(b) precious metals, being gold, silver or other metal of the platinoid group in the un-manufactured state and, any other rare metals that are prescribed;

Principal Secretary means the Principal Secretary in the State Department in charge ofMining;

"programme of mining operations", in respect of a mining licence

(a) means a programme of intended mining operations prepared by the holderof the licence and approved by the Director of Mines on the grant orrenewal of the licence;

(b) where the programme is amended pursuant to this Act, means theprogramme as so amended;

"programme of prospecting operations", in respect of a Prospecting Licence means aprogramme of intended prospecting operations prepared by the holder of the licence andapproved by the Director of Mines on the grant or renewal of the licence, and where theprogramme is amended pursuant to this Act, means the programme as so amended;

"prospecting area" means the area or areas of land covered by a prospecting licence;

"prospecting licence" means a licence relating to large scale operations granted inaccordance with this Act that authorises its holder to carry out prospecting operations;

"prospecting operations" means operations carried out offshore and on land to search forand define the extent of a mineral deposit and to determine its economic value;

"prospecting permit" means a permit relating to small scale operations granted inaccordance with this Act that authorises its holder to carry out prospecting operations;

"public officer" has the meaning assigned to it in Article 260 of the Constitution;

Public Service Commission means the Public Service Commission established underArticle 233(1) of the Constitution;

"radioactive mineral" means a mineral that contains by weight at least one-twentieth ofone per cent (0.05 per cent) of uranium or thorium or any combination thereof, including, but notlimited to, monazite sand and other ores containing thorium, carnotite, and pitchblende;

"register" means the register of mineral rights established under this Act;

"retention area" means the area or areas of land covered by a retention licence;

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"retention licence" means a retention licence granted under this Act;

"semi-precious" means gemstones having less commercial value than precious stonessuch as amethyst, garnet, jade, tourmaline, agate, amber, amethyst, aquamarine, beryl, zoisite,chrysolite, diamond, emerald, garnet, opal, peridot, ruby, sapphire, tourmaline, turquoise;

"small scale operation" means a prospecting or mining operations as described by theFirst Schedule to this Act;

strategic minerals means such minerals as the Cabinet Secretary may, by notice in theGazette, declare to be strategic minerals under this Act;

transfer includes to assign or trade;

Tribunal means an ad hoc mining tribunal established from time to time by the CabinetSecretary under this Act;

"unwrought precious metal" means precious metal in any form whatsoever, which is notmanufactured or made up into an article of industry or of the arts, and includes amalgam, slimes,slags, precious metal concentrates, pots, battery chips, sweepings from reduction works andscrapings and by-products of unrefined precious metal and precious metal which has beensmelted into the form of bullion but does not include ore in situ;

"water resource" shall have the meaning assigned to it in the Water Act, 2002.

National Land Commission means the National Land Commission established underArticle 67 of the Constitution.

Guiding principles.5. The Cabinet Secretary, Director of Mines, Director of Geology or any person administering or

applying this Act shall be guided by the values and principles of enshrined in the Constitutionand in particular Articles 10, 232, 201 (c), (d), 66 (2) of the Constitution.

PART II - OWNERSHIP OF MINERALS

Ownership of minerals.

6. (1) Every mineral

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(a)in its natural state in, under or upon land in Kenya;

(b) in or under a lake, river, stream, or water courses in Kenya;

(c) the exclusive economic zone and an area covered by the territorial sea or continentalshelf,

is the property of the Republic and is vested in the national government in trust for the people ofKenya.

(2) Subsection (1) applies despite any right or ownership of or by any person in relation toany land in, on or under which any minerals are found.

(3) The national governments control over minerals vested in it shall be exercised inaccordance with the provisions of this Act.

Saving for custom.

7. (1)Nothing in this Act shall be deemed to prevent any person from taking, subject to suchconditions as may be prescribed from time to time by the Cabinet Secretary, soil, clay iron, saltor soda from lands, other than lands within the area of a mining licence or permit or location,from which it has been the custom of the member of the community to which that person belongsto take the same.

(2) The Cabinet Secretary may, by notice in the Gazette, prescribe other minerals ofcustomary usage referred to under subsection (1).

Right of pre-emption.

8. (1) The National Government has a right of pre-emption of all minerals raised, won or obtained

(a) in Kenya;

(b) from any area covered by territorial waters; or

(c) the exclusive economic zone and the continental shelf,

before the mineral is sold.

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(2) The National Government has a right of pre-emption of all products derived from therefining or treating of minerals obtained, raised or won pursuant to subsection (1).

Discovery of mineral.

9. Any person who discovers any minerals without an apparent owner, or on any area of land notheld by that person under a mineral right that confers rights on the holder to conduct prospectingor mining operations for minerals shall forthwith report the discovery to the Cabinet Secretary.

PART IIIGENERAL PRINCIPLES

Restrictions on the acquisition of mineral rights.

10. (1) A person shall not search for, prospect, or mine a mineral or mineral deposit inKenya unless that person is granted a permit or licence in accordance this Act.

(2) A person shall not search for, prospect or mine any mineral or mineral deposit inKenya except in accordance with a mineral right granted under this Act.

Acquisition of rights in minerals.

11. A mineral right shall only be granted to or be held by a person who

(a) is of sound mind;

(b) has attained the age of eighteen years;

(c) is not an undischarged bankrupt; and (d) is not otherwise disqualified under any written law.

(2) A mineral right may be granted to or held by a company

(a) registered and established in Kenya;

(b) that has not commenced voluntary winding up pursuant to the Companies Act;

(c) not subject to winding up by a court pursuant to the Companies Act; or,

(d) not in liquidation.

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. (3) In the section the phase established means the actual existence of the company and inoperation in Kenya.

PART IV- ADMINISTRATIONGeneral powers of the Cabinet Secretary.

12. (1) The Cabinet Secretary may on behalf of the National Government negotiate, grant,revoke, suspend or renew mineral rights in accordance with this Act or any other written law.

(2) In the administration and management of minerals the Cabinet Secretary shall respectand uphold the principles and values enshrined in Article 201 (c) and (d) of the Constitution andensure that future generations benefit from natural resources.

Cabinet Secretary may declare areas reserved for small-scale operations.

13. The Cabinet Secretary, by notice in the Gazette designate any area of land to be an areareserved exclusively for small scale mining operations.

(2) The Cabinet Secretary shall not designate an area to be an area reserved exclusivelyfor small scale mining operations, if

(a) it would be incompatible with the continued enjoyment of a mineral right; or

(b)with respect to an area of land mentioned in any provision of this Act, unlessconsent has not been given by the authority, agency, Cabinet Secretary or otherperson mentioned in that respect in this Act.

(3) This section does not affect the right of any person to undertake non-miningoperations or activities in an area.

Cabinet Secretary may declare areas reserved for tendering.

14. (1) The Cabinet Secretary, by notice in the Gazette designate any area of landto be an area reserved for applications by tender for large scale operations.

(2) The Cabinet Secretary shall not designate any area of land to be an area reserved forapplications by tender for large scale operations , if

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(a) it is incompatible with the continued enjoyment of an existing mineral right; or

(b) a written consent with respect to an area of land specified in section 31, section 32or section 33 of this Act has not been given by the authority, agency, CabinetSecretary or other person referred to in the relevant section.

Cabinet Secretary may restrict or exclude areas from operations.

15. The Cabinet Secretary may, by notice in the Gazette exclude such areas as may bespecified in the notice to be areas excluded from the operations under a licence or in which suchoperations are restricted.

Strategic Minerals.

16. (1) The Cabinet Secretary, in consultation with the Cabinet shall declare certainminerals to be strategic minerals for national socio-economic development and national securitypurpose.

(2) for the avoidance of doubt, all radioactive minerals shall be strategic minerals.

Access to service.

17. (1) The Cabinet Secretary shall ensure reasonable access to the services of theDepartment of mining to all parts of the Republic, so far as it is appropriate to do so havingregard to the nature of the services offered by the Department.

(2)Without prejudice to subsection (1), there is established the directorates of

(a) the Directorate of Mines; and

(b) the Directorate of Geology.

Appointment of Directors.

18. (1) A directorate shall be headed by a director of Mines or a director of Geology, who shallbe competitively recruited and appointed by the Public Service Commission.

(2) In appointing the director referred to under subsection (1), the Public ServiceCommission shall take into consideration the relevant qualification and nature of task suchdirector shall undertake.

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(3) Without prejudice to subsection (2), a person may be appointed as a directorif that person

Removal of a director from office.

19. A Director may be removed from office by the Public Service Commission in accordancewith the terms and conditions of service for

(2) Before a Director is removed under subsection (6), the Director shall be given

Functions of the Director of Mines.

20. The Director of Mines shall

(a) be responsible to the Cabinet Secretary for the day to day operation of the department of Mining;

(b) advise the Cabinet Secretary on policy application in accordance with the Act;(c) provide advice to the Cabinet Secretary on the negotiation and conclusion of mineral

agreements;(d) provide advice to the Cabinet Secretary on the grant, renewal, suspension and

cancellation of mineral rights;(e) responsible to the Cabinet Secretary for the promotion of co-operation amongst state

agencies, county governments, the private sector, research bodies, non-governmental organisations and other organisations engaged in mining related programmes and activities to enhance the administration and operation of this Act;

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(a) is a citizen ofKenya;

(b) holds a degree, in mining or geology, as the case may be from a universityrecognized in Kenya;

(c) has had at least ten years proven experience at management level;and

(d) meets the requirements of Chapter Six of theConstitution.

(a) inability to perform the functions of the office arising out of physical or mentalincapacity;

(b) gross misconduct or misbehavior;

(c) incompetence or neglect of duty;

(d) violation of the Constitution or any other written law; or

(e) any other ground that would justify removal from office under the terms and conditionsof service.

(a) sufficient notice of the allegations made against him or her; and

(b) an opportunity to present his or her defence against the allegations.

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(f) advise the Cabinet Secretary on the policy framework in order to embody and confirm to international conventions and national policies relating to the sustainable development of the mineral resources and ensure that mining takes into account local and/or community values;

(g) implementation of mining policy;

(h) receive applications and notices as provided for in this Act;

(i) promotion and marketing of minerals;

(j) providing extension services and promoting sectoral activities;

(k) providing technical advice to the government and public on geology, minerals and mining;

(l) grant export permits, import permits, mineral dealers licences and diamond dealer's licences in accordance with this Act;

(m) ensure that the provisions of this Act relating to minerals and mining are compliedwith;

(n) give directions and take steps necessary to ensure that the terms and conditions of mineralrights are complied with;

(o) maintain mining cadaster and the register of mineral rights;

(p) obtain any information in relation to minerals and mining that is required for the administration of this Act;

(q) regulation of commercial explosives in accordance with Explosives Act; and

(r) perform such other functions as are assigned by the Cabinet Secretary, this Act or any other written law.

Functions of the Director of Geology.

21. The Director of Geology shall be responsible to the Cabinet Secretary for

(a) the maintenance of up to date geosciences data;(b) carrying out geological surveys;

(c) carrying out mineral valuation and audit;

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(d) undertaking geological exploration and geological mapping;(e) undertaking estimation of reserve and grade of minerals;(f) preparation of data base of minerals for mineral based industries;(g) conducting geo-technical surveys for mining engineering projects as and when

required;(h) geochemical survey and analysis of samples;(i) examination and issuing of permits for non-commercial quantities of mineral rock

and soil samples for analysis overseas; and(j) any other function as may be assigned by the Cabinet Secretary, this Act or any other

written law.

PART IIIMINING INSTITUTIONS AND BODIES

Establishment of National Mining Corporation.

22. (1) There is established the National Mining Corporation which shall serve as theinvestment arm of the national government in respect of minerals.

(2) The Corporation shall be a body corporate with perpetual succession, and a commonseal and shall, in its corporate name, be capable of

(a) suing and being sued;

(b) taking, purchasing and disposing of movable and immovable property;

(c)borrowing money;

(d) entering into contracts; and

(e) doing such other things as may be necessary for the proper discharge of itsfunctions under this Act, which may be lawfully done or performed by a body corporate.

Headquarters of the Corporation.

23. The headquarters of the Corporation shall be in Nairobi City County.

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Functions of the Corporation.

24. The functions of the Corporation shall be to

(a) to engage in mineral prospecting and mining and any other related activities;(b) invest on behalf of the national government;(c)to acquire by agreement and hold interests in any undertaking, enterprise or project

associated with the exploration, prospecting and mining;(d) to acquire shares or interest in any firm, company or other body of persons, whether

corporate or unincorporated which is engaged in the mining , prospecting, refining,grading, producing, cutting, processing, buying, selling or marketing of minerals; and

(e) to carry on its business, operations and activities whether as a principal agent,contractor or otherwise, and either alone or in conjunction with any other persons, firmsor bodies corporate.

Board of the corporation

25. (1) The Corporation shall be managed by a Board comprising of

(a) a chairman appointed by the President, who shall be non-executive unless the President otherwise directs;

(b) the Principal Secretary or a representative;(c) the Principal Secretary for the National Treasury or a representative;(d) the Principal Secretary responsible for trade;(e) four other persons not being employees of the state corporation, of whom not more than

two shall be public officers. (2) The Cabinet Secretary shall make regulations to prescribe the criteria for theappointment of the members under paragraphs (a) and (e).

(3) An appointment under subsection (1) (a) and (e) shall be by name and by notice in the Gazette. (4) The term of office for member under subsection 1 (a) and (e) shall for a period of three years and may be renewed for one further final term. (5) A person ceases to be a member, if he or she (a) resigns, by giving written notice to the Cabinet Secretary; (b) is absent, from three consecutive meetings of the Board;(c) is convicted of an offence and sentenced to imprisonment for a term exceeding six months ;

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(d) is incapacitated by prolonged physical or mental illness from performing his duties as a member of the Board.

(6) A representative member referred to under subsection (1) (b) (c) and (d) shall, when attending a meeting, be deemed for all purposes to be a member of the Board.

Chief executive officer of the corporation.

26. (1) There shall be a chief executive officer of the Corporation.

(2)The chief executive officer shall be

(a) accounting officer;

(b) secretary to the Board;

(c)responsible for the day to day administration and management of the Corporation.

(2) A person shall be qualified for appointment as the Chief executive officer, if thatperson

(a) holds a degree from a university recognised in Kenya;

(b) has at least seven years management experience;

(c)meets the requirements of Chapter Six of the Constitution; or

(d) has not been convicted of a felony and sentences to imprisonment.

(3) The Board shall competitively recruit the chief executive officer.

(4) The chief executive officer shall be appointed for a term of three years, which may berenewable for one further term.

(5) The chief executive officer may be removed from office in accordance with theterms and conditions set out in the contract for violation of any written law or violation of theterms and conditions of the contract.

National Mining Corporation Regulations.

27. The Cabinet Secretary may make Regulations generally for purposes of theoperationalization of the Kenya Mining Corporation.

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Establishment of minerals commodity exchange

28. (1) The Cabinet Secretary shall ensure the promotion of minerals and may establish amineral commodity exchange.

(2) The Cabinet Secretary may make regulations to prescribe the criteria for establishmentof a mineral commodity exchange.

Access to geosciences information etc.

29. The Cabinet Secretary may establish an institute or any other mechanism to ensureavailability, generation and accessibility of up-to-date geosciences data and information.

Mining Tribunal.

30. (1) The Cabinet Secretary may, from time to time appoint an ad hoc tribunal to arbitrateon any matters relating to mineral rights.

(2) The tribunal shall consist of five members who shall be appointed by the Cabinetsecretary.

(3) The Cabinet Secretary shall, by regulations, develop criteria for the appointment andterms of appointment of the members of the tribunal referred to under subsection (2).

(4) The Cabinet Secretary shall by regulations make regulation to provide for(a) the referral of matters to the tribunal;(b) award of the tribunal;(c)review of the determination of the tribunal;(d) proceedings of the tribunal;(e) disclosure of interest by members of the tribunal; (f) powers and scope of the tribunal;(g) appeals from the tribunal; and(h) any other matter as may be necessary in the functioning of the tribunal.

Establishment of the Sovereign Fund.

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31. (1) There is established a Sovereign Fund which shall vest in, administered and managedby the Sovereign Fund Board.

(2) The object of the Fund is to:

(a) to support government saving from mineral revenues to ensure sustainable and stable futureincome

(b) Provide stabilization support in times of economic stress

(c) to strengthen the Republics longterm financial position: and

(d) to finance expenditure on pensions

(3) The Fund shall be held in an account in the Central Bank of Kenya.

Sovereign Fund Board.

32. (1) There is established an ad hoc Sovereign Fund Board which shall comprise of

(a) Principal Secretary responsible for mining;(b) Principal Secretary responsible for Finance;(c) Principal Secretary responsible for matters of mineral oils; and(d) Principal Secretary responsible for trade.

(2) The Board shall be responsible for the administration and management of the Fund.

(3) The Board may sue and be sued, and may purchase, hold, manage and dispose ofmovable and immovable property and enter into all such contracts as it may deem necessary ordesirable and for the purposes of ensuring long term benefit to the people of Kenya from minerals.

(4) The Board shall at all time be guided by the principles and values enshrined in theConstitution, ensure prudent use of the funds administered and managed by it and ensure thatfuture generations benefit from investments in the Fund.

(4) The Cabinet Secretary shall make regulations to provide for the procedure of meetingand any other matters to ensure operationalization of the Board.

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Funds of the Sovereign Fund.

33. (1) There shall be paid in the fund

(a) At least 25 percent of all mineral rights revenues including, royalties, royalty salesproceeds, mineral revenue-sharing payments and bonuses received by theRepublic.

(b) contributions and other payments required by this Act or any other written law tobe paid into the Fund; and

(c) any other money as may be appropriated to it by Parliament.

(2) The capital of the Sovereign Fund may only be used for transfers to thenational government budget pursuant to a resolution by the Parliament.

(3) Only the proceeds and profits of the fund shall be utilized forpurposes of investment.

Management of the Sovereign Fund.

34. Except as otherwise provided for under this Act, the Fund shall be administered andmanaged in the manner provided for in the Public Finance Management Act, 2012.

Investment of the Fund.

35. (1) The Board may, with the approval of Parliament invest the funds of the Fund for thebenefit of future generations.

(2) The investment referred to under subsection (1) may be either domestic orinternational investments.

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PART VGENERAL PROVISIONS ON MINERAL RIGHTS

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Categories of mineral rights.

36. (1) The following types of mineral rights may be granted under this Act to authorise aperson to engage in

(a) large scale operations

(i) a prospecting licence;

(ii) a retention licence;

(iii) a mining licence; or

(b) small scale operations-

(i) a prospecting permit; or

(ii) a mining Permit.

(2) The Cabinet Secretary may grant, deny, vary or revoke a mineral right.

(3) The Cabinet Secretary may, by Notice in the gazette, designate any other licenceto be granted under this Act.

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A- LICENSING

Feedback on status of applications except mining lease.

37. (1) A person may make an application for a mineral right in the prescribed manner to theCabinet Secretary.

(2) The Cabinet Secretary shall approve or reject an application under subsection (1),within ninety days, except where

(a) delay occurs because of a request for further information from anapplicant;

(b) delay is caused by an applicant, communicate to the applicant the approvalor rejection;

(c)the application is for mining licences to which section 83 applies.

(3) The applicant shall notify the Cabinet Secretary in writing of his or her acceptance ofthe grant of the mineral right, within fourteen days of receiving the notification of approval.

(4) The Cabinet Secretary shall upon receipt of letter of acceptance of offer referred tounder subsection (3), cause a notice of the grant of the right to be published in the Gazette, at theapplicants cost, indicating the proposed boundaries of the land in relation to which the mineralright is applied for.

(5) Where no objections are raised after the publication of the notice under subsection(4), the mineral right shall be granted fourteen days after publication.

(6) Where the applicant fails to notify the Cabinet Secretary of the acceptance of theoffer, the approval of the application shall lapse immediately after the period specified undersubsection (3) lapses.

(7) Objections to application for a grant of a mineral right shall be determined by theCabinet Secretary and where appropriate the Cabinet Secretary may constitute a tribunal inaccordance with section **** to hear and determine the matter.

Form of mineral right.

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38. (1) Subject to the provisions of this Act, a mineral right issued under this Actor any other written law, shall be evidenced by a licence or permit, and a certificate issued underthis Act.

(2)The licence, permit and certificate referred to under subsection (1), shall be in the prescribedform.

(3)The certificate referred to under paragraph one shall, indicate

(a) the name and registered address of the holder;

(b) the date of the grant of the mineral right;

(c) the term of the mineral right;

(d) a description of the area over which the mineral right is granted;

(e) the mineral or mineral deposit in respect of which the right is granted; and

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(F) a brief description of conditions subject to which the right may be exercised orrevoked.

(4) The Cabinet Secretary shall, by a Notice in the Gazette prescribe the form andcontent of a mineral right licence or permit.

(5) Notwithstanding subsection (3), the mineral right permit or licences referred tounder subsection (3) shall indicate in detail

(a) the name and registered address of the holder;

(b) the date of the grant of the mineral right;

(c) the term of the mineral right;

(d) a description of the area over which the mineral right is granted; the mineral ormineral deposit in respect of which the right is granted; and

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(F) description of conditions subject to which the right may be exercised or revoked.

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Mineral rights in excluded and restricted areas.

39. (1) The Cabinet Secretary shall not grant a mineral right that authorises prospectingor mining operations on, under or over any land specified by the Cabinet Secretary, by notice inthe Gazette, to be land upon which, such operations are excluded or restricted.

(2) The Cabinet Secretary shall, prior to granting a mineral right authorisingprospecting or mining operations, require the applicant of the mineral right to seek

(a) in relation to public land within the mandate of the National LandCommission, the consent of the National Land Commission;

(b) the consent of a State agency where that mineral right is on public land underArticle 62 (2)(b) of the constitution;

Cap.376

(c) the consent of the appropriate Cabinet Secretary or other authority, wherethe area for which the right is sought falls within land dedicated or set apart asa place of burial, religious significance, or public building, or for any otherpublic purpose;

(e) the Governor of the county exercising control where the land is situated within atown, municipality or trading centre;

(f) the Cabinet Secretary responsible for matters relating to wildlife conservationand management, where the land is situated within a marine park, a national parkor a local sanctuary under the Wildlife (Conservation and Management) Act;

No. 8 of 1999

(g) the Cabinet Secretary responsible for matters relating to the environment,where the land is situated within a protected area, a protected natural environment,or a protected coastal zone under the Environmental Management andCoordination Act.

No. 7 of 2005.

Cap. 307.

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(h) the Director of the Kenya Forest Service, where the land is situated within a forestarea or; operations on, under or over an area, that has been declared a forest areaunder the Forests Act.

(i) the Managing Director of the Kenya Railways Corporation established under theKenya Railways Corporation Act, where the land is reserved for the purpose ofany railway or is situated within one hundred metres of any railway.

(j) Any other person who in the opinion of the Cabinet Secretary would otherwise beaffected by the grant of a mineral right, these may include owner of private land orthe community in occupation of the land.

(3) Whenever a question arises as to whether operations on any land are excluded underthis section, such question shall be referred to the Cabinet Secretary.

Mineral rights on private land.

40. (1) No mineral right shall be granted under this Act on, under or over privateland without the express consent of the owner.

(2) For the purpose of subsection (1), consent shall be deemed to be given for thepurposes of this Act where the owner of private land has

(a) entered into a legally binding arrangement with the applicant for the mineralright or with the Government, which allows for the conduct of prospecting ormining operations; or

(b) entered into an agreement with the applicant for the mineral rightconcerning the payment of adequate compensation.

(3) Where consent is granted prior to any change in land ownership, such consent shallcontinue to be valid for as long as the mineral right subsists.

Mineral Rights on community land.

41. (1) No Mineral Right shall be granted under this Act or any other written lawon, under or over community land without the consent of

28 28


(a) the authority obligated by the law relating to administration andmanagement of community land to administer community land;

(b) the National Land Commission in relation to community land that is un-alienated.

(2) For the purpose of subsection (1), consent shall be deemed to be given for thepurposes of this Act where the registered owners of community land has

(a) entered into a legally binding arrangement with the applicant for the mineralright or with the Government, which allows for the conduct of prospecting ormining operations; or

(c)entered into an agreement with the applicant for the mineral right concerningthe payment of adequate compensation.

(3) Subject to the law relating to community land, where consent is granted prior to anychange in land ownership, such consent shall continue to be valid for as long as the mineral rightsubsists.

(4) The Cabinet Secretary in charge of mining may by Notice in Gazette makeregulations on grant of mineral rights on community land.

Consent or otherwise.

42. The State organ, agency, authority, person or institution referred to under sections 34, 35or 36 should communicate the grant or rejection of the consent sought to the applicantwithin 28 days.

43.

44.Compulsory acquisition of land for prospecting and mining

45. Where any consent required under sections 31 and 32 is unreasonably withheld or theCabinet Secretary considers that any withholding of consent is contrary to the national interest,the Cabinet Secretary may take such steps as are necessary under the law relating to thecompulsory acquisition of land or rights or interests in land to vest the land or area in question,or rights or interests in such land or area, in the Government or on behalf of the Government; andthereafter such land or area shall cease to be land excluded from prospecting or mining.

Tendering for mineral rights.

46. (1)The Cabinet Secretary shall seek tenders in respect of large-scale operations over an areaor areas of land designated under section 12.

29 29


(2) The tenders referred to under subsection (1), shall be made and assessed inaccordance with procedures prescribed under the relevant procurement laws.

(3) The Cabinet Secretary may make regulations generally to provide for tenderingguidelines that recognise the uniqueness of procurement and tendering process of minerals.

(4) In the formulation of guidelines under subsection (3), the Cabinet Secretary shallconsult the Cabinet Secretary responsible for matters of procurement.

Conditions attaching to mineral rights.47. (1)A mineral right may be granted under this Act subject to conditions determined by the

Cabinet Secretary including conditions concerning

(a) the protection of the mineral interests of Kenya as set out in the regulations;

(b) the protection of the environment of Kenya;

(c) the safety of prospecting and mining operations, and of persons undertaking thoseoperations; and

(d) the protection of the lawful interests of the holders of any other mineral right.

(2) Unless otherwise provided for by the mineral right, a condition subject to which amineral right was granted shall continue to have effect and enforceable after

(a) the expiration of the term of the right;

(b) the surrender of the whole or part of the area specified in the right; or

(d) the cancellation of the right in respect of the whole or part of the area specifiedin the right,

and may be enforced by the Cabinet Secretary as if the condition were contained in a contractbetween the Cabinet Secretary and the holder of the right and valuable consideration had beengiven to the holder for the holders compliance with the condition.

Directions concerning good mining practice.

48. (1) A holder of a mining right shall not engage in wasteful mining or treatment practices orconduct his operations otherwise than in accordance with this Act, mining best practice and anyother guidelines as shall be prescribed from time to time by the Cabinet Secretary.

(2) The Cabinet Secretary or an officer authorised by the Cabinet Secretary may issuedirections to the holder of a mineral right requiring the holder to undertake measures necessary

30 30


(a) to prevent wasteful mining practices; or

(b) to ensure that prospecting or mining operations are carried out inaccordance with mining best practice, the Act or guidelines underthis Act.

(3) A holder of a mineral right shall comply with a direction given under this Act.

(4) A non-compliance with a direction under this section amounts to an offencepunishable by a court of law.

Mineral rights to be exercised reasonably and responsibly.

49. A holder of a mineral right shall exercise the rights conferred under the mineral rightreasonably, responsibly and in a manner that does not adversely affect the interests of any otherholder of a mineral right, or the owner or occupier of the land over which the mineral rightextends.

Registered address.50. A holder of a mineral right, and any agent appointed by the holder of a mineral right,

shall register with the Director of Mines an address in Kenya to which all communications andnotices made under this Act to the mineral right holder or agent may be sent.

Employment and training of Kenyans.

51. To ensure skills transfer and capacity building among Kenyans, each mineral rightholder shall submit to the Cabinet Secretary a detailed programme for the recruitment andtraining of Kenyans citizens as prescribed by the Cabinet Secretary.

(2) The programme to be submitted under subsection (1) shall be a condition of thegrant of mineral right.

(3) The Cabinet Secretary shall make regulations to provide for the replacement ofexpatriates, the number of years such expatriates shall serve, number of expatriates per capitalinvestment and provide for collaboration and linkage with universities and research institutionsto train Kenyan citizens.

(4) The Cabinet Secretary shall come up with policy guidelines making furtherprovision to give effect to this section.

Preference in employment.

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52. (1) A holder of a mineral right shall give preference in employment to citizens ofKenya.

(2) In the case of large scale operations, the holder of a mineral right shall

(a) conduct training programmes for the benefit of employees; (b) undertake capacity building for the employees;

(c) only engage foreign technical experts in accordance with local standards ofregistration such as Geologists Registration Act of 1983, Engineers Act 2012;

(d) work at replacing technical expatriate employees with Kenyans, within a reasonableperiod as may be prescribed by the Cabinet Secretary;

(e) provide a linkage with the universities for purposes of research and environmentalmanagement; and

(f) where applicable and necessary facilitate and carry out social responsibility to thelocal communities.

Government participation in mining license.53. (1) Where a mineral right is for mining or exploitation, the National Government shall

acquire ten percent free carried interest in the rights and obligations of a mining operations inrespect of which financial contribution shall not be paid by the National Government.

(2) Subsection (1) does not preclude the National Government from any other or furtherparticipation in mineral operations that may be agreed upon with the holder.

Local equity participation54. The Cabinet Secretary may from time to time gazette different minimum levels of local

equity participation for certain minerals.

Preference for local products.55. A holder of a mineral right shall, in the conduct of prospecting and mining operations

permitted by the right, give preference to the maximum extent possible

(a) to materials and products made in Kenya; and

32 32


(b) to service agencies located in Kenya and owned by Kenyan citizens.

Assignments, transfers and trade of mineral rights.

56. (1) A holder of a mineral right shall not assign, transfer or trade the mineral right orits part thereof without consent of the Cabinet Secretary.

(2) The Cabinet Secretary shall not unreasonably withhold or delay consent for the assignment, transfer or trade of a mineral right.

(3) The Cabinet Secretary shall not consent to a proposed assignment, transfer or trade of amineral right to a person or a body corporate which is not eligible for the grant of a mineral rightunder this act.

(4) Prior to assignment, transfer or trade of Mineral Rights, a Mineral Right holder shallpay income tax on any gain accruing from such transaction.

(5) The transferee as well as the transferor shall be liable for the payment of all rents andcompensation which may have accrued due, and the observance of all obligations imposed by thelicence up to the date of the transfer in respect of the licence or part thereof so transferred, butthe transferor shall not be liable for the payment of any future rents and compensation or thecompliance with any obligations so imposed as aforesaid in regard to the licence or part thereofso transferred after the date of the transfer.

Preparation of reports57. The Director of Mines shall submit an application for a mineral right relating to large-

scale operations to the Cabinet Secretary for consideration and approval.

(2) An application submitted to the Cabinet Secretary under subsection (1) shall beaccompanied by the Director of Mines written report on the application.

(3) The written report shall include the text of any proposed mineral agreement negotiatedby the Cabinet Secretary with the applicant.

Annual financial reports.58. A holder of a prospecting licence, a retention licence or a mining licence shall,

within three months following the end of each financial year, furnish the Cabinet Secretary witha copy of audited annual financial report.

(2) The annual financial report furnished under subsection (1) shall be in a form approvedby the Cabinet Secretary and shall contain information on

(a (a) the profit or loss of the holder for the financial year; and

33 33


(b) the state of the financial affairs of the holder at the end of the financial year.

Power to require additional information.59. A holder of a mineral right, or an applicant for the grant or renewal of a mineral right, shall

provide such further information to the Cabinet Secretary as the Cabinet Secretary mayreasonably require for consideration of the application.

(2) Where the Cabinet Secretary requires information under subsection (1), the CabinetSecretary shall request such information by written notice to the holder of the mineral right.

(3) Where the Cabinet Secretary requires further information to be provided undersubsection (1), an application for the grant or renewal of a mineral right shall be deemedincomplete until the mineral right holder furnishes such information to the Cabinet Secretary.

Report by the Cabinet Secretary.60. (1) The Cabinet Secretary shall submit quarterly report, to the President and Parliament,

of all mineral rights granted or rejected under this Act or any other written law.

(2) The Report shall indicate the justification for granting or rejecting to grant a mineralright under this Act or any other written law.

B- LICENCES

Priority of applications.61. Where two or more persons not acting together each make an application for the grant of

the same mineral right over the same area of land, or over overlapping parts of the same area ofland, the Cabinet Secretary shall assign priority

(a) to the application first received and registered by the Cabinet Secretary; and

(b) where two or more applications are received on the same day, in accordancewith the time of receipt of each application.

Treatment of applications.62. The Cabinet Secretary shall extend the term of a mineral right that has expired by effluxion

of time

(a) where the mineral right is a prospecting licence and its holder is awaiting a decisionon an application made in accordance with this Act for

(i) the renewal of the licence; or,

34 34


(ii) a retention licence or a mining licence that applies to the whole, or a part, of thearea covered by the prospecting licence.

(b) where the Mineral Right is a Retention Licence and its holder is awaiting a decisionon an application made in accordance with this Act for

(i) the renewal of the licence; or,

(ii) a mining licence; or

(c) where the mineral right is a mining licence or a mining permit and its holder isawaiting a decision on an application for renewal made in accordance with this Act.

(2) An extension of the term of a mineral right in accordance with subsection (1) shallend immediately if an application for any of the mineral rights mentioned in this section issurrendered or is refused.

Conditions for grant of Mineral Rights for large scale operations.

63. The Cabinet Secretary shall only grant or renew a mineral right for large scale operationswhere such an applicant has complied with the Act.

Withdrawal of an application.

64. An application for the grant or renewal of a mineral right may be withdrawn by the applicantat any time before the applicant receives information of the approval or rejection of theapplication.

Prospecting Licence

Application for prospecting licence.

65. A person may apply for a prospecting licence to the Cabinet Secretary in theprescribed form accompanied by the prescribed fee.

(2) An applicant for a prospecting licence shall provide information on the followingmatters to the Cabinet Secretary when making an application in accordance with subsection (1)

(a) the mineral or minerals in respect of which the licence is sought;

(b) the area in respect of which the licence is sought;

(c) particulars of the proposed programme of prospecting operations to be carried outunder the licence;

35 35


(d) details of the experience and financial resources available to the applicant toconduct the prospecting operations;

(e) a plan giving particulars of the applicants proposals with respect to theemployment and training of Kenyan citizens; and

(f) a plan giving particulars of the applicants proposals with respect to theprocurement of local goods and services.

(3) The Cabinet Secretary shall not grant a prospecting licence unless satisfied that-

(a) the area of land over which the prospecting licence is sought is reasonable havingregard to the applicants proposed programme of prospecting operations;

(b) the applicant has adequate financial resources, technical competence and miningindustry experience to carry on the proposed programme of prospecting operations;

(c) the applicant has obtained an environmental impact assessment report that relates tothe operations to be carried out under the prospecting licence where required underthe Environmental Management and Coordination Act;

(d) the applicants proposals with respect to the procurement of locally available goodsand services are acceptable; and,

(e) the applicants proposals with respect to employment and training of Kenyancitizens are acceptable.

(4) The Cabinet Secretary shall prescribe the items required to be submitted by theapplicant where an application for the prospecting licence is approved under this Act.

Maximum area of prospecting licence.66. The area covered by a prospecting licence shall not exceed five hundred square kilometres

(500km) for both marine and terrestrial areas.

Term of prospecting licence.

67. The term of a prospecting licence shall be specified in the licence, and in any case shall notexceed three years.

Rights conferred by prospecting licence.

68. (1) A holder of a prospecting licence shall enjoy exclusive rights to carry out prospectingoperations in the area covered by the licence in accordance with the provisions of this Act.

36 36


(2) The holder of a prospecting licence may, in the exercise of the rights conferredunder subsection (1)

(a) demarcate areas that fall within the licence area; and,

(b) enter the area of land specified in the licence and take all reasonable measures on orunder the surface of the land to carry out prospecting operations, and

(c) erect equipment, plant and buildings necessary to carry out the prospectingoperations.

(3) A person appointed by the holder of a prospecting licence to act as an agent of theholder may exercise the rights of the holder of the licence under the licence, subject to anylimitations on the powers of the agent contained in the instrument of appointment.

(4) In the event of change of land rights, a prospecting licence holder shall maintainmineral rights over the licence area unless fully compensated by the new land rights holder.

(5) The compensation payable to a mineral rights holder shall include a refund of allexpenses on mineral prospecting, loss or redundancy of equipment, loss of business income andsuch other reparation to be determined by a qualified assessor.

Minerals obtained under prospecting licence

69. (1) Any minerals acquired in the course of prospecting operations under aprospecting licence -

(a) shall remain the property of the National Government; and

(b) shall not be disposed of or removed from Kenya without the written consent of theCabinet Secretary.

(2) Subsection (1)(b) shall not apply to any prescribed quantity required for sampling, assaying,analysis or other similar examination.

Obligations under prospecting licence.

70. (1) The holder of a prospecting licence shall

(a) commence prospecting operations within three months of the grant of theprospecting licence or such other period as may be specified in the licence;

(b) undertake prospecting operations in accordance with the programme of prospectingoperations;

37 37


(c) ensure that the amount specified in the programme of prospecting operations isexpended in the course of undertaking prospecting operations;

(d) comply with the terms and conditions of any environmental impact assessmentlicence which relates to the operations to be carried out under the prospectinglicence;

(e) without any unreasonable delay, notify the Cabinet Secretary of the discovery ofany mineral deposit of potential commercial value (including mineral deposits forwhich the holder of the licence was not authorised to prospect),

(f) notify the Cabinet Secretary of any archaeological discovery;

(g) comply with the conditions of the licence or any existing and applicable mineralsagreement, and any directions issued by the Cabinet Secretary or an authorizedofficer in accordance with this Act; and

(h) submit to the Cabinet Secretary geological and financial reports and suchother information relating to prospecting operations as may be prescribed eitherquarterly or at such other intervals as may be determined by the Cabinet Secretary.

(2) Where the amount specified in the programme of prospecting operations in (c) is notexpended in the course of prospecting operations, such amount as shall not have been expended,shall be recoverable by the national government as a civil debt.

Form of prospecting licence.

71. A Prospecting Licence issued in accordance with this Act shall include the followinginformation in addition to the information referred to in section 63

(a)the approved programme of prospecting operations;

(b) the approved plan for the procurement of local goods and services; and

(c) the approved plan to employ and train citizens of Kenya.

Record-keeping and reporting requirements.

72. A holder of a prospecting licence shall keep at the holders registered address completeand accurate records of prospecting operations relating to the licence in the manner prescribed.

(2) The records to be kept by the holder of a prospecting licence for the purposes ofsubsection (1) shall include

(a) details of all minerals discovered;

38 38


(b) the results of geochemical or geophysical analysis obtained and compiled by thelicence holder;

(c) financial statements and such other books of account as the Cabinet Secretary mayrequire; and

(d) such other reports or information as may be prescribed or otherwise determined by the Cabinet Secretary.

Amendment of programme of prospecting operations.

73. A holder of a prospecting licence may seek amendments to the approved programme ofprospecting operations by written application to the Cabinet Secretary in the prescribed form.

Renewal of prospecting licence.

74. (1) A holder of a prospecting licence may apply to the Cabinet Secretary for therenewal of the licence in respect of an area of land that forms part of the prospecting area byapplication in the prescribed form accompanied by the prescribed fee.

(2) An application for the renewal of a prospecting licence shall be made three monthsbefore the expiry of the term of the licence.

(3) The Cabinet Secretary shall respond within two months of receipt of the application fora renewal submitted under subsection (2).

(4) Where an application has been submitted as per subsection (2) and the CabinetSecretary fails to respond before the expiry of the prospecting licence, the applicant maycontinue prospecting.

Term of renewal.

75. The term of renewal of a prospecting licence shall be specified in the licence and in any caseshall not exceed two years.

(2) A prospecting licence shall not be renewed more than two times after the initialgranting of the licence.

Application for renewal of prospecting licence.

76. An application for the renewal of a prospecting licence shall be accompanied by

(a) a report on the progress of prospecting operations;

39 39


(b) a statement of costs incurred in the course of undertaking prospectingoperations;

(c) particulars of the programme of prospecting operations that the applicantproposes to carry out during the renewal period; and,

(b) a plan identifying the area of land in respect of which renewal is sought; and

(c)proof of submission of environmental audit reports to the NationalEnvironmental Management Authority.

(2) Where a plan is not provided in accordance with subsection (1)(d), the CabinetSecretary shall determine the area in respect of which renewal shall be granted.

(3) A renewal of a prospecting licence under this Act shall be subject to compliance withthe provision of this Act.

Relinquishment, consolidation etc.

77. Unless the Cabinet Secretary agrees that a smaller area may be relinquished, thesize of the prospecting area specified in a prospecting licence shall be reduced upon renewal

(a) by 50% of the prospecting area upon first renewal; and,

(b) by 25% of the remaining prospecting area upon the second renewal.

(2) Upon the renewal of a Prospecting Licence, any area of land that is covered by aRetention Licence or Mining Licence shall be omitted from the prospecting area under theProspecting Licence.

(3) Where a person holds two or more contiguous prospecting licences of the sameterm and in respect of the same mineral or minerals, the Cabinet Secretary may, for the purposesof relinquishment under subsection (1) of part or any of the areas thereof, declare the areascovered to be one area subject to a single Prospecting Licence and provide written notification tothe holder of the Prospecting Licence.

(4) Compensation shall not be payable under this Act in respect of the relinquishmentof land provided for under this Act or where the land had formed part of the prospecting areaunder a prospecting licence.

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Retention Licence

Eligibility for Retention Licence.

78. This section applies where

(a) the holder of a prospecting licence has identified a mineral deposit that is ofpotential commercial significance within the prospecting area; and

(b) the deposit cannot be developed immediately due to temporary adverse marketconditions, economic factors, technical constraints, or other factors beyond thereasonable control of the holder of the licence.

(2) Where the circumstances described in subsection (1) exist, the holder of aprospecting licence may apply for a Retention Licence.

Application for retention licence.

79. The holder of a prospecting licence may apply for a retention licence by applicationto the Cabinet Secretary in the prescribed form accompanied by payment of the prescribed fee.

(2) An applicant for a retention licence shall provide information on the following mattersto the Cabinet Secretary in the prescribed form in accordance with subsection (1):

(a) the mineral or mineral deposit in respect of which the licence is sought;

(b) a full study and assessment by independent experts on the prospects for recoveryand the commercial significance of the mineral deposit and on the relevant adversemarket conditions, economic factors, technical constraints or other factors that makeit impossible to develop the mineral deposit immediately;

(c) the area in respect of which the licence is sought;

(d) particulars of any proposed prospecting operations to be carried out under thelicence;

(e) details of the experience and financial resources available to the applicant todevelop the mineral or minerals once the relevant adverse market conditions,economic factors, technical constraints or other factors that make it impossible todevelop the mineral or minerals cease;

(f) a plan giving particulars of the applicants proposals with respect to theemployment and training of Kenyan citizens; and

(g) a plan giving particulars of the applicants proposals with respect to the procurementof local goods and services.

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(3) The Cabinet Secretary shall not grant a retention licence unless satisfied that

(a) the application is reasonable having regard to the study and assessment referred toin subsection (2)(b);

(b) the applicant has adequate financial resources, technical competence and miningindustry experience to develop the mineral deposit once the relevant adverse marketconditions, economic factors, technical constraints or other factors that make itimpossible to develop the mineral deposit cease;

(c) the applicant has obtained an environmental impact assessment licence that relatesto the operations to be carried out under the retention licence where required underthe Environment Management and Coordination Act;

(d) the applicants proposals with respect to the procurement of local goods andservices are acceptable; and,

(e) the applicants proposals with respect to employment and training of Kenyancitizens are acceptable.

(4) At any time before determining the application, the Cabinet Secretary may require theapplicant to provide any additional information that the Cabinet Secretary may reasonablyrequire regarding the applicants proposals for the retention and development of the mineraldeposits covered by the application.

(5) Where a request for additional information is made in accordance with subsection(3), the Cabinet Secretary shall reject the application.Term of retention licence.

80. The term of a retention licence shall be specified in the licence, and in any caseshall not exceed two years.

Rights conferred by retention licence.

81. (1) The holder of a retention licence shall enjoy the exclusive right to engage inprospecting operations in the retention area and to apply for a mining licence in respect of all ora part of the retention area.

(2)The holder of a retention licence may, in the exercise of the rights conferred undersubsection (1):-

(a) demarcate areas that fall within the licence area; and

(b) enter the area of land specified in the licence and take all reasonable measures on orunder the surface of the land to carry out prospecting operations;

42 42


(c) erect equipment, plant and buildings necessary to carry out the prospectingoperations;

(3) A person appointed by the holder of a retention licence to act as an agent of theholder may exercise the rights of the holder of the licence under the licence, subject to anylimitations on the powers of the agent contained in the instrument of appointment.

Obligations under retention licence.

82. The holder of a retention licence shall

(a) demarcate the licence area in the prescribed manner;

(b) back fill or otherwise make safe in the prescribed manner or as otherwise directed bythe Cabinet Secretary any excavations made during the course of prospectingoperations;

(c) permanently preserve, or otherwise make safe in the prescribed manner or asotherwise directed by the Cabinet Secretary, any boreholes made during the course ofprospecting operations;

(d) comply with the terms and conditions of any environmental impact assessmentlicence relating to the operations to be carried out under the retention licence;

(e) remove any equipment, plant or building erected for prospecting operations in thearea specified in the licence;

(f) carry out studies and assessments of the prospects of the commercial exploitation ofthe mineral deposits concerned as may reasonably be required by the CabinetSecretary ; and,

(g) comply with the conditions of the licence or any existing and applicable minerals agreement,and any directions issued by the Cabinet Secretary or an authorized officer in accordance withthis Act.


83. (1) The holder of a retention licence shall keep at his registered office complete andaccurate records of prospecting operations relating to the licence in the manner prescribed.

(2) The records to be kept by the holder of a retention licence for the purposes ofsubsection (1) shall include:

(a) details of all minerals discovered;

(b) results of geo-chemical or geo-physical analysis obtained and compiled by thelicence holder;

43 43


(c) results of studies, surveys, tests and other work undertaken in the area covered bythe Retention Licence, including any interpretation and assessment of those testsand surveys;

(d) financial statements and such other books of account as the Cabinet Secretary mayrequire; and

(e) such other reports and information as may be prescribed or otherwise determined bythe Cabinet Secretary.

Compulsion to apply for mining licence by retention licence holder.

84. Where the Cabinet Secretary is satisfied that it has become technically possible andcommercially viable for a mineral deposit that is the subject of a retention licence to be minedduring the term of the licence, the Cabinet Secretary may serve a written notice on the holder ofthe retention licence requiring him to apply for a mining licence in respect of the mineralsspecified in the notice before the end of the period specified in the licence.

(2) Where the holder of a retention licence fails to comply with a notice served inaccordance with subsection (1), the Cabinet Secretary may thereafter at any time cancel thelicence.

(3) The Cabinet Secretary shall give a holder of a retention licence referred to undersubsection (2) thirty days notice to show cause as to why the retention licence should not becancelled.

(4) Where no response is received within the period specified in subsection (3), theCabinet Secretary shall revoke the retention licence.

(3) No compensation shall be payable under this Act if a retention licence is cancelled inaccordance with this section.

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Mining Licence

Application for mining licence.

85. A person may apply for a mining licence by application to the Cabinet Secretary in theprescribed form accompanied by the prescribed fee.

(2) An applicant for a mining licence shall provide information on the following mattersto the Cabinet Secretary in the prescribed form when making an application in accordance withsubsection (1)

(a) the mineral or minerals in respect of which the licence is sought;

(b) the area in respect of which the licence is sought;

(c) a proposed programme of mining operations that outlines mine forecasts andoperation plans, including the options for minerals beneficiation in the prescribedform;

(d) a statement regarding the mineral or minerals in the area of land over which thelicence is sought, including details of all known minerals as well as probable mineralreserves;

(e) a statement of the financial and technical resources available to the applicant to carryout the proposed mining operations and to comply with the conditions of the licence;

(f) a plan giving particulars of the applicants proposals with respect to the employmentand training of Kenyan citizens; and,

(g) a plan giving particulars of the applicants proposals with respect to the procurementof local goods and services.

Restrictions in respect of mining licences.

86. The Cabinet Secretary shall not grant a mining licence in respect of land that is the subject of aprospecting licence, a retention licence or a mining licence unless

(a) the applicant is the holder of that licence; or

(b) the applicant, with the consent of the licence holder, is applying for a licence that wouldpermit its holder to work a mine dump or mine waste and tailings on the land but not toundertake any other mining operation on the land.

Consideration of applications

45 45


87. The Cabinet Secretary may grant a Mining Licence if he or she is satisfied that

(a) the area of land over which the mining licence is sought is reasonable having regard tothe applicants proposed programme of mining operations;

(b) the applicant has adequate financial resources, technical competence and miningindustry experience to carry out the proposed programme of mining operations;

(c) the applicant has obtained an environmental impact assessment licence in respect of theapplicants proposed mining operations;

(d) the applicants proposals with respect to the procurement of local goods and servicesare acceptable; and,

(e) the applicants proposals with respect to employment and training of Kenyan citizensare acceptable.

Application by holder of prospecting licence.

88. The Cabinet Secretary shall grant a mining licence to an applicant where

(a) the applicant is the holder of a prospecting licence who has given notice to theCabinet Secretary of the discovery of minerals in or on terrestrial or marine areasthat is the subject of the prospecting licence, or in respect of minerals to which theprospecting licence relates; and

(b) the applicant satisfies all of the requirements prescribed by this Act for the grant ofa mining licence.

Notice of refusal.

89. An application for a mining licence made in the prescribed form by a applicant shall not berefused on any of the grounds prescribed by this Act unless

(a) the Cabinet Secretary has given the applicant notice of the intended refusal and theground for the refusal;

(b) the Cabinet Secretary has specified in the notice a period within which the applicantmay make appropriate proposals to correct or remedy the ground for the intendedrefusal; and

(c) the applicant has not, within that period, made appropriate proposals.

Feedback on status of applications and notification.

46 46


90. The Cabinet Secretary shall, within sixty days of the receipt of an application forthe grant of a mining licence, notify the applicant of the grant or refusal of the applicationthereof.

Form of mining licence.91. A mining licence issued in accordance with this Act shall include the following information

in addition to any other information required to in this Act:

(a) the mineral in respect of which the licence is issued;(b) name and address of the holder;(c) date of grant of the licence; (d) the area in respect of which the licence is sued;(e) the approved programme of mining operations;(f) the approved plan for the procurement of local goods and services; (g) conditions subject to which the licence is issued; and(h) the approved plan to employ and train citizens of Kenya.

Term of mining licence.

92. The term of a mining licence shall not exceed

(a) twenty five years; or

(b) the forecast life of the mine,

whichever is shorter, and shall be specified in the licence.

Rights conferred by mining licence.

93. (1) A holder of a mining licence shall enjoy the exclusive right to mine the mineral deposit ordeposits specified in the licence within the area specified subject to the provisions of this Act andthe terms and conditions contained in the licence.

(2) In the exercise of the rights referred to in subsection (1), the holder of a mininglicence may

(a) enter the area of land specified in the licence and take all reasonable measures onor under the surface of the land to carry out mining operations;

(b) erect equipment, plant and buildings necessary to mine the specified mineral and totransport, dress or treat the minerals so recovered;

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(c) dispose of any mineral recovered subject to the payment of the required fees androyalties.

(3) A person appointed by the holder of a mining licence to act as an agent of theholder may exercise the rights of the holder of the licence under the licence, subject to anylimitations on the powers of the agent contained in the instrument of appointment

Obligations under mining licence.

94. A holder of a mining licence shall(a) commence operations under the licence within six months of the grant of the

licence, or such other period of time as may be specified in the licence or in anyrelevant minerals agreement;

(b) conduct mining operations in compliance with the approved programme of miningoperations;

(c) comply with the terms and conditions of the environmental impact assessmentlicence relating to the operations to be carried out under the mining licence;

(d) demarcate and keep demarcated the mining area in the prescribed manner;

(e) comply with the conditions of the licence and any applicable mineral agreement,and any directions issued by the Cabinet Secretary or an authorized officer inaccordance with this Act;

(f) submit to the Cabinet Secretary upto date quarterly returns of mine development andmineral production;

(g) stack or dump any mineral or waste products in the manner provided for in thelicence or as otherwise prescribed, having regard to good mining industry practice.


95. (1) The holder of a mining licence shall keep at his registered address complete andaccurate records of mining operations in the prescribed form.

(2) The records to be kept by the holder of a mining licence for the purposes ofsubsection (1) shall include:

(a) copies of all maps, geological reports, sample analyses, aerial photographs, cores,logs and tests and other data obtained and compiled by the licence holder;

(b) financial statements and such other books of account as the Cabinet Secretary mayprescribe; and

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(c) such other reports and information as may be prescribed or otherwise determinedby the Cabinet Secretary.

Amendment of programme of mining operations.

96. (1) Subject to the terms and conditions of the licence, the holder of a mining licenceshall notify the Cabinet Secretary of any proposed amendment to the approved programme ofmining operations.

(2) Unless rejected by the Cabinet Secretary, any such amendment shall, subject tosubsection (3), take effect three months after the date of notification under subsection (1).

(3) Any proposed amendment likely to substantially alter the approved programme ofmining operations shall not take effect unless expressly approved by the Cabinet Secretary.

Newly discovered minerals.

97. (1) A holder of a mining licence shall notify the Cabinet Secretary of the discovery of anymineral to which the licence does not relate within thirty days of the discovery and shall includesuch particulars of the site and the circumstances of the discovery as may be prescribed orotherwise required by the Cabinet Secretary.

(2) Subject to subsections (1), the holder of the mining licence may apply to theCabinet Secretary to include a newly discovered mineral or minerals in the mining licence.

(3) An application to include a newly discovered mineral or minerals made undersubsection (2) shall be in the prescribed form and shall include a proposed programme of miningoperations relating to such mineral or minerals.

(4) The Cabinet Secretary may approve an application made in accordance withsubsections (2) and (3) subject to such additional conditions as the Cabinet Secretary may beprescribed.

Cessation, suspension, or curtailment of production in respect of mining licences.

98. A holder of a mining licence shall give the Cabinet Secretary notice of any intention to cease,suspend, or curtail production from mining operations carried out pursuant to the licence.

(2) For the purposes of subsection (1), the holder shall give notice of at least

(a) twelve (12) months if cessation of production is intended;

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(b) six (6) months if suspension of production is intended; or

(c) three (3) months if curtailment in production is intended.

(3) A notice given under subsections (1) and (2) shall include a statement that sets outthe technical and economic basis for the proposed cessation, suspension or curtailment ofproduction.

(4) Upon receipt of a notice given in accordance with this section, the CabinetSecretary shall investigate the circumstances leading to the proposedcessation, suspension or curtailment of production and CabinetSecretary shall if satisfied that the cessation, suspension or curtailmentof production should be granted.

(5) The Cabinet Secretary may approve the cessation, suspension or curtailment ofproduction proposed by the licence holder subject to the holder complying with such conditionsas the Cabinet Secretary may determine.

(6) The Cabinet Secretary shall prescribe the period within which a suspension allowedunder this Section may be acceptable.

(7) The Cabinet Secretary shall make regulations to provide for the conditions tomanage the mines and the licenced area where a cessation notification has been approved.

Renewal of mining licence.

99. (1) The holder of a mining licence may apply to the Cabinet Secretary for the renewal of thelicence.

(2) An application under subsection (1) shall be done in the prescribed formaccompanied by the prescribed fee in respect of all or part of the licence area.

(3) An application for the renewal of a mining licence shall be made at least one yearbefore the expiry of the licence.

Application for renewal of mining licence.

100. The following documents and information shall be required to accompany anapplication for the renewal of a mining licence

(a) a proposed programme of mining operations to be carried out during the term ofrenewal;

(b) a plan of the area in respect of which renewal of the Mining Licence is sought;

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(c) an environmental impact assessment licence in respect of the applicants proposals,where required under the Environmental Management and Coordination Act; and

(d) such additional information as the Cabinet Secretary may prescribe.

Term of Renewal.

101. The term of renewal of a mining licence shall not exceed

(a) fifteen years; or,

(b) the remaining life of the mine,

whichever is the shorter, and shall be specified in the licence.

PART VIIMINERAL AGREEMENTS

Mineral agreement.102. (1) The Cabinet Secretary may enter into an agreement, consistent with the provisions of

this Act, with any person with respect to any matter relating to or connected with operations oractivities under an mining licence

(2) A mineral agreement shall include the terms and conditions relating to -

(a) minimum exploration or mining operations to be carried out and the time tabledetermined for purposes of such operations;

(b) the minimum expenditure in respect of mining operations;

(a) the manner in which exploration or mining operations shall be carried out;

(b) the payment of royalties, taxes, fees and other fiscal impositions;

(c)the circumstances or the manner in which a discretion conferred under this Actis to be exercised;

(d) subject to the requirement of the Environment Act, environmentalobligations and liabilities; and

(e) procedures on the settlement of disputes.

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(f) the processing, whether wholly or partly in Kenya, of any mineral or group ofminerals found, obtained or mined by the holder of a mineral right in the courseof exploration or mining operations;

(g) the basis on which the market value of any m

Documents

The Mining Bill 19th June - 2013-1