Mining budget jumps to Sh4b as counties get Sh6.9b in royalties
Business
By
Joackim Bwana
| Apr 04, 2024
The government has increased the mining budget from Sh136 million to Sh4 billion as the industry seeks to distribute Sh6.9 billion in mining royalties to 32 counties.
It is the first time the government would be releasing such royalties to counties and communities in areas where mining is practiced since independence.
Mining, Blue Economy and Maritime Affairs Cabinet Secretary Salim Mvurya said yesterday for years the ministry has been neglected.
He lamented that the docket operated with few staff, inadequate data and resources and was grappling with illegal mining.
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"This sector did not get much attention and those in the mining sector did not have licenses and also not all were paying taxes," said Mvurya.
Henceforth, the CS announced that counties will get 20 per cent of the mining royalties while the communities will get 10 per cent.
"Since 2016 there has not been any sharing of mineral royalties. We intend to share Sh6.9 billion among 32 counties an accumulation from 2016. From now we shall share the royalties with counties and communities as outlined under the new Mining Act," he said.
Mvurya noted that Kilifi, Kwale and Kajiado counties will benefit from the royalties.
The highest royalties will go to Kwale county which will get more than Sh1.1 billion, Kilifi (Sh950 million) and Kajiado (Sh660 million).
The CS was speaking when he appeared before the Parliamentary Committee on Mining in Mombasa to shed light on how the ministry has spent the Sh4 billion budget.
The committee chairman David Gikaria took Mvurya to task over cancellation of mining licenses for some companies in Marsabit and Migori among other regions.
The CS said they were reorganising the sector as most of the miners were previously operating illegally and as cartels due to lack of proper regulations.
He noted that 1,200 companies have applied for mining licenses with over 14 prospective minerals having been discovered across the country.
The CS was optimistic that mining will increase the country's Gross Domestic Product (GDP) from one percent to 10 per cent following the recent reforms.
He said that they have already employed 167 staff and next month they will employ 201 employees to help in data collection and geo surveys.
"Previous budget was Sh136 million with a lean staff and no resources. It increased to Sh4 billion and we are now employing 368 people among them geologists, data miners and surveyors. Already we have employed 167 and the rest will be employed next month," said Mvurya.
The CS revealed that they have also bought 18 vehicles and are in the process of upgrading the Madini Lab in Nairobi and setting up new ones across nine counties.
He said geologists will deal with most of the issues including data mining, environmental degradation and ensuring rehabilitation of mines.
"Inadequate mining data is due to lack of staff, an officer sitting in Mombasa is forced to manage more than one county. Technology is limited we need even choppers," he said.
The CS regretted that despite the issuance of licenses, mining is prohibited in schools and around hospitals.
"I was forced to stop illegal mining in Baringo where an investor had put a processing plant at a school in Chelemungoti. Even with a license, you are not allowed to operate in schools or hospitals," said Mvurya.
He said testing and sampling is also a challenge as the country relies on Madini Lab in Nairobi which is not up to date.