Mining boom in Kenya on hold
"The development of Kenyan infant mining industry has been stalled by recent political uncertainties."
Mining in Kenya is not something you hear about very often. The chief reason for this is not that the country has no resources but because the legislation and geological data were, until recently, too obsolete to attract any investment.
The situation started turning for the better in the beginning of 2016, when the new mining act was passed to replace the existing (nearly 80 years old) legislation and a geological survey was commissioned by the government. Both the mining ministry and the companies active in East Africa appeared very keen to explore potential deposits of gold, copper, titanium, coal and rare earth minerals and to make Kenya a regional hub for mining.
Unfortunately, the nullification of the August presidential election by the supreme court and the political chaos that has been present in the country since then has left a dent in the country’s mining prospects.
The three year nationwide survey that was supposed to start in December - a result of a framework agreement between China and Kenya signed in July this year - has been put on hold. Moreover, Kenya lost out on some of the marketing opportunities aimed at attracting investors, such as holding the International Colored Gemstone Association congress which was moved to Thailand as a result of the botched election.
The timing of the current events is unfortunate for a country which is in the middle of a pitch to attract investors into a new sector and we will have to see how big an impact it will have on the appetite of mining companies, including the already present ones like Acacia Mining (who are developing a gold mine in the eastern part of Kenya) and Base Resources (who operate the biggest mine in the country in the south), to invest in the country.
However, mining is a long run where the route from discovery to production often exceeds a decade so the hopes still are that Kenyan mining boom will happen, albeit not as quickly as some hoped.
The Inside Africa team would like to thank Juraj Neuwirth, an associate, for his contribution to this blog post.