KENYA risks missing out on billions in
investment, thousands of jobs and export earnings unless the
government urgently reforms the country’s mineral licensing system, mining
engineers have warned.
This comes as the sector continues to struggle after Australian
company-Base Titanium wound up its titanium ore mining operations in Kwale in
December 2024, ending what was Kenya’s leading mineral export earner for over a
decade.
Last year, the mining sector recorded a decline in
production, with the value of mineral production declining from Sh25.5 billion
in 2024 to Sh20.3 billion in 2025, the Economic Survey 2026 indicates.
Royalties and license fee earnings nevertheless
grew from Sh3.3 billion in 2023-24 to Sh3.8 billion in 2024-25, but sector
players have cited challenges in the 2025-26 financial year.
While successive governments have positioned mining as
one of the country’s next economic frontiers, capable of driving
industrialisation and reducing dependence on traditional sectors such as
agriculture and tourism, industry experts say administrative failures are hurting
the sector.
The Mining Engineers Society of Kenya (MESK) says
delays, inconsistencies and uncertainty surrounding the administration of
mineral rights are Kenya’s biggest obstacle to unlocking the country’s vast
mineral wealth, despite Kenya having one of the region’s most progressive
mining laws.
According to the society, investors continue to face
lengthy delays in obtaining prospecting and mining licences through the
government’s online cadastre system, with some applications remaining
unresolved for years despite meeting all legal requirements.
At the same time, other applications are reportedly
processed within months, raising concerns over transparency, consistency and
predictability in the licensing process.
“Kenya has significant mineral potential, a
modern legal framework and growing investor interest. Yet one fundamental
obstacle continues to undermine this ambition, the administration of mineral
rights through the online cadastre and licensing system,” said Mining
Engineers Society of Kenya chairman Joseph Komu.
Industry players argue that certainty is one of the
most important considerations for mining investors, because exploration
projects require substantial upfront capital and often take years before
generating any returns.
“Without predictable licensing timelines, financial
institutions become reluctant to finance projects while international investors
increasingly shift their capital to competing jurisdictions with more efficient
regulatory systems,” Komu said yesterday.
The engineers note that the Mining Act, 2016
established a comprehensive legal framework with clearly defined procedures,
timelines and technical standards governing the issuance of mineral rights.
However, they argue that implementation has failed to
match the intentions of the legislation.
Also affected are artisanal and small-scale miners who
are said to have been left out of the formal licensing framework.
Artisanal mining remains a major source of livelihoods
across mineral-rich counties including Migori, Kakamega, Taita Taveta, Kwale,
Turkana and West Pokot.
Failure to integrate these operators into the formal
economy limits access to financing, technology, training and occupational
safety while denying government significant tax revenues.
The engineers have also questioned the increasing
number of government applications occupying large sections of prospective
mineral ground within the online cadastre.
They argue that under the Mining Act, the government’s
primary responsibility is to regulate the industry rather than compete directly
for mineral rights.
Some of the government-held applications are
reportedly larger than the maximum acreage permitted under the law, effectively
locking out private investors from commercially promising exploration areas.
“This creates an uncomfortable paradox. The same
government seeking to attract mining investment is simultaneously restricting
access to mineral opportunities,” Komu said.
Another growing concern involves speculative acquisition
of mining licences.
Under international mining practice, a mining licence
is normally issued only after extensive geological exploration, drilling,
laboratory analysis and feasibility studies have confirmed the commercial
viability of a mineral deposit.
However, the engineers say some licence holders are
obtaining mining licences before undertaking adequate exploration, only to
return later to basic prospecting work.
They warn that such practices blur the legal
distinction between prospecting and mining rights, weaken investor confidence
and undermine the integrity of Kenya’s licensing regime.
The government has
been implementing reforms in the sector to push up mining contribution to the
GPD from a paltry one per cent to at least 10 per cent by 2030, with a value of
at least Sh1.6 trillion.
This includes the
enactment of the Mining Act 2016, described as a progressive, transparent and
investor-friendly legal framework that replaced colonial-era 1940 legislation.
