Kenya’s nascent mining industry has had to battle with illegal artisanal mining, which has slowed growth. As part of efforts to combat this, the government is keen to see a gold refinery established in Kakamega County. The Petroleum and Mining ministry said the refinery would provide services that ensures artisanal and small-scale miners, as well as other local gold producers benefit more from the mineral.
Following a mining act signed into law by President Uhuru Kenyatta in 2016, Kenya had expected a mining boom. Government revenues from mining and mineral operations were just Ks1.65bn ($16.5 million) in June 2017 when the last financial year ended. Dan Kazungu, the former mining minister had set a goal of having revenues from mining account for 10 percent of GDP by 2030. This, he hopes to achieve by attracting foreign investments and registering the tens of thousands of Kenya’s informal miners, developing a mining services industry and expanding the small gemstone industry.
According to mining experts and analysts, in addition to gold deposits Kenya also has base metal deposits such as copper, rare earth minerals and some coal.
“We don’t even know what we’ve got,” said Kazungu, who is optimistic about the prospects of Kenya’s mining industry. “About 95 percent of the rock structures coming up from Tanzania have not even been mapped.”
Kazungu sees beyond unearthing raw materials as he believes the country can build its capacity to process raw materials. “We should bring minerals here and do value addition,” he said, adding; “About $24bn-worth of minerals go to Thailand each year for value addition and half of that comes from Africa. If we organise ourselves and get even 10 per cent of that, we’ll be making progress.”
Lamenting the increase in illegal mineral trade in the country, Kazungu told Business Daily Africa Kenya loses hundreds of millions of revenue every quarter through illicit minerals trading.
“Today, the black market is much bigger than the legitimate channel costing the country much needed revenues, jobs and reputation,” the then minister said.
Hence, the Petroleum and Mining ministry has announced that it was looking for consultants for a feasibility study that would see the birth of a gold refinery in Kakamega County. John Munyes, who became Petroleum and Mining minister in February when President Kenyatta merged the State Department of Petroleum with the Ministry of Mining.
“The aim of the project is to improve the livelihoods of the beneficiary community, regional economy and that of Kenya as a whole and creation of direct and indirect jobs for wealth creation through refining of gold to international standards,” the ministry said.
The Ministry hopes that a new refinery would help eliminate the black market through which miners sell their gold at lower prices to middlemen and see locals get more value.
British mining company Acacia Mining had last year announced the discovery of an estimated 1.31 million ounces of gold resources at Lirhanda in Kakamega County. The county is one of the four being prospected for gold in Kenya, in a project that has been going on for more than four years and has cost over Ksh2.95 billion. Others are Kisumu, Siaya and Vihiga.