Mining Act

This Act may be cited as the Mining Act.

The Act applies to minerals listed in the First Schedule; the Cabinet Secretary may amend that Schedule by notice in the Gazette.

The Act does not apply to matters relating to petroleum and hydrocarbon gases, except as otherwise provided in the Act.

Defines the phrase "an application for the grant, renewal, transfer, assignment or surrender of a mineral right".

The Cabinet Secretary, the Principal Secretary and anyone administering the Act must be guided by specified constitutional values and Chapter Six leadership and integrity principles.

The national government must exercise control over minerals vested in it in accordance with this Act; minerals in various locations (land, water, EEZ/territorial sea/continental shelf) are identified and land is divided into geometric sections and blocks.

Any person may take certain customary materials (soil, clay, iron, salt or soda) from land where it has been customary to do so, subject to conditions prescribed by the Cabinet Secretary and excepting land within a mineral right.

The State has a right of pre-emption over all strategic minerals obtained in Kenya before sale; the Cabinet Secretary may make regulations for exploration, mining, processing and export of strategic minerals and deposits.

A person who discovers minerals that appear to have no mineral-right holder must report the discovery to the Cabinet Secretary; the Cabinet Secretary must immediately acknowledge receipt; a reporter is granted the first right of refusal to apply for a mineral right over the discovery (subject to subsection (1)).

A person must not search for, prospect, or mine minerals, mineral deposits or tailings in Kenya unless they have been granted a permit or licence under this Act.

Directors of a company must demonstrate required technical capacity, expertise, experience and financial capacity, subject to subsection (2); artisanal and small-scale Kenyan-owned operations are exempt from the technical/financial requirement and artisanal miners are exempt from subsections (1)(d) and (3).

The Cabinet Secretary must administer this Act and must respect and uphold specified constitutional principles and values.

The Cabinet Secretary must (on recommendation of the Mineral Rights Board and by notice in the Gazette) designate areas of land to be reserved exclusively for small-scale mining operations; designation must respect existing mineral rights and may require written consent; owners or lawful occupiers retain the right to undertake non-mining operations in such areas.

The Cabinet Secretary may declare areas reserved for tendering and shall designate areas of land as reserved for tender-based large scale operations, subject to conditions.

Cabinet Secretary may restrict or exclude areas from operations.

The Cabinet Secretary must advise the Cabinet and seek its approval to declare certain minerals strategic; all radioactive minerals are strategic; the Cabinet Secretary may, with advice from the Mineral Rights Board, set rules for handling strategic minerals.

The Director of Mines must regulate, supervise and enforce AML/CFT/CPF compliance for reporting institutions and has specific powers (vetting, inspections, surveillance, sanctions, issuing guidance, information sharing and other necessary actions).

Mineral rights holders, mineral dealers and their agents must not violate or fail to comply with AML/CFT and counter-proliferation regulations, with specified monetary penalties for legal and natural persons and daily additional penalties for continuing breaches.

Section 17 creates directorates (Mines and Geological Survey), requires each directorate to be headed by a director, requires the Cabinet Secretary to ensure reasonable access to directorate services across the Republic where appropriate, and allows the Cabinet Secretary to establish additional directorates as necessary.

The Public Service Commission must competitively recruit and appoint directors and must consider relevant qualifications and functions; directors must meet listed qualifications and hold office for a three-year term renewable once.

Section 19 lists grounds and procedural requirements for removal of a director, including incapacity, gross misconduct, incompetence or neglect of duty, violation of the Constitution or any other written law, other contractual grounds, and the requirement of notice and an opportunity to respond.

Lists the functions and powers of the Director of Mines, including running the Directorate, promoting development and compliance, supervising mining operations, conducting inspections, issuing written directions or suspensions, and entitlement to compensation for damage caused by exercise of powers.

Section 21 lists the functions, powers and duties of the Director of Geology, including operating the Directorate, providing geoscience expertise and data, undertaking surveys and mapping, conducting analyses and valuations, maintaining repositories and facilities, supporting regulatory functions, exercising entry and sampling powers on land, minimizing damage when exercising powers, and entitlement to compensation for damaged property.

A holder of a mineral right, or their agent or employee, must produce evidence of the mineral right when exercising rights over land belonging to someone else if the lawful owner or occupier requires it.

Affirms a right to graze livestock and cultivate land, conditional on not unduly interfering with prospecting or mining operations.

Mineral right holders must deposit a compensation guarantee bond; they must not start mining unless landowners or lawful occupiers are compensated. The Cabinet Secretary may make regulations about compensation guarantee bonds and must ensure resettlement where communities prefer it; the cost of resettlement is borne by the mineral right holder. Parties to compensation disputes must try to resolve them by negotiation, and where negotiations fail either party may refer the dispute to the Cabinet Secretary.

Section heading addressing general provisions on dispute resolution and referring to action by the Cabinet Secretary 'in the manner prescribed in this Act'.

Cabinet Secretary has power to determine disputes about the boundaries of areas held under prospecting or mining rights.

Sets procedure for dispute determination by the Cabinet Secretary: lodging memoranda, notification, hearing, right to representation and evidence, written determination, orders (including compensation), enforceability, record-keeping, access to records on payment of prescribed fee, and rules prescribed in the Gazette.

Any person aggrieved by a decree, order or decision made under the Cabinet Secretary's powers may appeal to the High Court within thirty days.

Section 22 establishes the National Mining Corporation as the national government's investment arm for minerals.

The Corporation must have its headquarters in Nairobi.

The Corporation must engage in mineral prospecting and mining and any other related activities.

Section 25 sets out the board composition (chair appointed by the President; Principal Secretaries or representatives; three other non‑employees), requires the Cabinet Secretary to make regulations on appointment criteria, fixes members' term length and renewal, lists circumstances (resignation, absence, conviction, bankruptcy, incapacity) affecting membership, and deems representative members attending meetings to be members of the Board.

The Corporation must competitively recruit the chief executive officer of the Corporation.

The Cabinet Secretary must make regulations to operationalize the Corporation.

The Cabinet Secretary must facilitate establishment of a Mineral and Metals Commodity Exchange and may make Regulations prescribing criteria and functions; the Exchange's purpose is to facilitate efficiency and security in mineral trade transactions.

A database of geoscience and information is kept and maintained.

Establishes a Mineral Rights Board, lists its membership and appointing authorities, and sets appointment terms and experience requirements.

Lists the functions of the Mineral Rights Board, including handling mineral-rights agreements, identifying areas for small-scale/artisanal mining, excluding or restricting mining areas, declaring strategic minerals, managing cessation or suspension of production for licences, setting fees/royalties, considering referred matters, and establishing advisory committees.

The Cabinet Secretary may, on the recommendation of the Mineral Rights Board, grant, deny or revoke mineral rights and may designate other mineral rights by notice in the Gazette.

Sets application, notification, response and appeal procedures and time limits for mineral right applications: applicants must apply to the Cabinet Secretary; the Cabinet Secretary must notify the Mineral Rights Board and the applicant; approved applicants must accept or reject offers within 21 days or approval lapses; aggrieved applicants may appeal to the High Court within 30 days; decision timeframes for prospecting/reconnaissance (90 days) and mining (120 days) are set.

Section 34. Mineral right applications Section 34(1)(a) the land owner or lawful occupier of the land where the mineral is located; Section 34(1)(b) the community; and Section 34(1)(c) the relevant county Government. Section 34(2) The

A mineral right must be evidenced by a licence or permit, and that licence or permit must be in the prescribed form.

The Cabinet Secretary shall determine whether operations on any land are excluded under this section; the section also lists lands specified by the Cabinet Secretary in the Gazette and areas subject to existing permits or licences as excluded or restricted, and identifies various authorities whose approval is required for mineral rights in specific areas.

A registered owner's express consent is required before prospecting and mining rights may be granted on private land, and the registered owner must not unreasonably withhold that consent.

The Cabinet Secretary may make regulations, by notice in the Gazette, for granting prospecting and mining rights over community land.

A responsible person for a State organ, agency or authority, or a person referred under sections 36–38, must give written consent or a notice of refusal to the applicant within twenty days.

The Cabinet Secretary may determine that withholding consent is contrary to the national interest under Section 40(1)(b).

The Cabinet Secretary must invite parties to tender for large-scale mineral operations in land designated under section 14, and must make regulations on tendering guidelines in consultation with the National Treasury and subject to procurement law.

The Cabinet Secretary may enforce conditions attaching to mineral rights as if those conditions were contractual obligations.

The holder of a mineral right must comply with any direction given under this Act.

Holders of mineral rights must exercise those rights reasonably and responsibly and must not do so in a way that adversely affects other mineral-right holders or the owner or occupier of the land.

A holder of a mineral right and any agent appointed by that holder must register with the Principal Secretary an address in Kenya for service of communications and notices under the Act.

Holders of mineral rights must submit a detailed programme for recruiting and training Kenyan citizens to the Cabinet Secretary; submission and approval are conditions for grant; the Cabinet Secretary must make regulations on expatriate replacement and issue policy guidelines.

The holder of a mineral right must give employment preference to local community members and Kenyan citizens and perform a set of measures (training, capacity building, regulated use of non-citizen technical experts, replacement of non-citizen technical staff within a reasonable period prescribed by the Cabinet Secretary, university linkages, social investment, and implementing a community development agreement).

For large-scale mining, the State must acquire a ten percent free carried interest in the share capital of the mineral right; the State may also have additional participation agreed at arm's length; the Cabinet Secretary must make regulations for state participation.

If planned capital expenditure exceeds the prescribed amount, a holder of a mining licence must list at least 20% of its equity on a local stock exchange within three years of starting production; the Cabinet Secretary prescribes the capital expenditure limits and may, after consulting National Treasury, extend the period.

Preference for local products: Section to materials and products made in Kenya;

Holders may not assign, transfer, mortgage or trade mineral rights without Cabinet Secretary consent; the Cabinet Secretary must not unreasonably withhold consent and must inform applicants within thirty days; notifications to KRA, tax compliance, approval for ownership changes over 25%, and shared liability rules on transfer are required.

The Mineral Rights Board must prepare and submit a report on each application for a mineral right to the Cabinet Secretary.

Holders of mineral rights must give the Cabinet Secretary and the Kenya Revenue Authority audited annual financial statements within three months after each financial year, prepared in accordance with International Accounting Standards; the Cabinet Secretary must prescribe their form and contents.

The holder of a mineral right or an applicant must provide any additional information reasonably required to the Cabinet Secretary for consideration of an application.

The Cabinet Secretary must submit an annual report to Cabinet listing all mineral rights granted or rejected under this Act or any other written law, and must indicate the justification for each grant or rejection.

Applications for a mineral right are considered, processed and determined on a first-come first-served basis.

An extension of the term of a mineral right ends immediately if an application for any of the mineral rights mentioned in this section is surrendered or is refused.

The Cabinet Secretary must only grant or renew a mineral right for a large scale operation if the applicant has complied with the provisions of this Act.

An applicant may withdraw an application for the grant or renewal of a mineral right before they receive information of approval or rejection.

The Cabinet Secretary, in consultation with the National Treasury, may enter into a mineral agreement with the holder of a mining licence when the proposed investment exceeds five hundred million United States dollars; the agreement may cover specified matters (operations, expenditure, manner of operations, environmental obligations, dispute settlement, processing in Kenya, valuation basis, insurance, arbitration, community development, fiscal payments and financial arrangements) and must be submitted to Parliament for ratification and prepared in a prescribed standard format.

The Cabinet Secretary may, on behalf of the State and on the advice of the Mineral Rights Board, negotiate mineral agreements with applicants for or holders of prospecting, retention or mining licences for large-scale mining or exploitation of minerals in marine and terrestrial areas, in accordance with this Act and any other written law.

Certain mineral agreement information must be made accessible to the public; the Cabinet Secretary must ensure access through the ministry website and must publish records and related information annually.

The Cabinet Secretary must have regard to Article 71 of the Constitution before executing any mineral agreements or other agreements relating to exploitation of natural resources.

Terms or conditions in a mineral agreement that conflict with this Act or the Constitution are void to the extent of the inconsistency; and no term in a mineral agreement can exempt a party from complying with this Act or any other written law.

The Cabinet Secretary must apply the criteria in the Second Schedule to distinguish between small scale and large scale operations.

The holder of a mineral right may apply to surrender that mineral right by written notice to the Cabinet Secretary.

The Cabinet Secretary may allow surrender of a mineral right on recommendation; the holder must apply and provide notice and supporting documents.

A surrender only takes effect after the Cabinet Secretary, acting on the Mineral Rights Board's recommendation, gives the holder written notice of approval; the Cabinet Secretary may grant approval subject to conditions.

A mineral right stops having any effect when an application for its surrender is approved (subject to section 42(2)).

The Cabinet Secretary may suspend or revoke a prospecting or mining permit if the holder does not commence operations in accordance with the approved work programme.

A mineral right ceases to have effect on cancellation, subject to section 42(2); revocation does not affect liabilities or obligations incurred before revocation.

When a mineral right ends or is cancelled, the former holder must provide a prescribed statement; immovable assets vest in the Republic; certain movable assets vest in the County Government or are subject to first refusal; the Cabinet Secretary may permit limited removal of assets and must prescribe regulations on asset use.

On termination, the holder must deliver all the records which, prior to termination, the holder was obliged to maintain under this Act.

Persons may dispose of minerals only in specified cases: with the written consent of the Cabinet Secretary; if the person holds a mineral right and complies with its conditions; if the person holds a mineral dealer's or diamond dealer's licence and complies with the licence conditions; or as otherwise permitted by the Act. If minerals are disposed of otherwise than in accordance with subsection (1), no title to the minerals shall pass.

Persons must not engage in mineral dealings unless they hold and act in accordance with a mineral dealer's licence or permit; holders of mineral rights and specified licensed or banking persons are allowed to deal.

An applicant must apply to the Cabinet Secretary in the prescribed form, pay the prescribed fee, and provide evidence of sufficient knowledge, experience, or working capital.

A mineral dealer's licence expires on 31 December of the year it is issued; a mineral dealer may apply to renew the licence to the Cabinet Secretary in the prescribed form and after paying the prescribed fee.

deal in minerals otherwise than in accordance with the conditions set out in the licence

Holders of a mineral dealer's licence must keep a prescribed register of mineral dealings and must submit, quarterly (Jan, Apr, Jul, Oct), a duplicate true copy of the preceding three months' register with a statutory declaration to the Cabinet Secretary.

The Cabinet Secretary must issue mineral dealer's permits upon application and payment; permits are for citizens or corporates with 60% citizen shareholding; permits expire on 31 December of the year issued; permit holders may not export minerals and have the right to buy and sell locally.

Persons must not deal in diamonds unless licensed; holders of mineral rights and bankers are excepted.

A person must apply to the Cabinet Secretary for a diamond dealer's licence in the prescribed form and pay the prescribed fee; the application must include evidence of sufficient working capital; and the Cabinet Secretary must, before issuing a licence, require security by bond or cash deposit for payment of prescribed fees or royalties.

Licences expire on the 31st day of December of the year they are granted; a diamond dealer may apply to the Cabinet Secretary to renew the dealer's licence in the prescribed form and upon payment of the prescribed fee.

Holders of a diamond dealer's licence must comply with licence conditions, keep a prescribed register of diamond dealings with specified details, submit true copies quarterly (January, April, July, October) with a statutory declaration, and produce the register to senior police on written request.

A holder of a diamond dealer's licence may appoint an agent to engage in diamond dealings, but the appointment does not exempt the licence holder from complying with the Act and licence conditions; an appointed agent may exercise the holder's rights subject to any limitations in the appointment agreement.

Persons or companies must hold a licence issued by the Cabinet Secretary (on recommendation of the Mineral Rights Board) in order to provide mine support services; the Cabinet Secretary must prescribe Regulations to implement this section.

Holders of mineral rights or licences must still comply with environmental protection laws; a mining licence cannot be granted unless the person has an environmental impact assessment licence, a social heritage assessment and an approved environmental management plan.

A provision of this Act or any right granted under a mineral right must not exempt a person from complying with the Water Act regarding rights to use water from any water resource.

A provision of this Act or a mineral-right entitlement cannot be used to exempt anyone from complying with the Occupational Health and Safety Act; the Cabinet Secretary must make regulations for safety and health of mine workers and mining operations.

Promotes sustainable use of land by restoring abandoned mines and quarries.

The Cabinet Secretary must not grant prospecting, retention or mining licences unless the applicant has submitted site mitigation and rehabilitation or mine-closure plans for approval; the Cabinet Secretary may prescribe Regulations for site rehabilitation and mine-closure obligations.

Applicants for prospecting, retention or mining licences must provide an environmental protection bond (financial security) to cover environmental and rehabilitation obligations; the Cabinet Secretary sets its form and amount and may partially or fully release it upon satisfactory rehabilitation.

Fees and charges may be prescribed for mineral rights, mineral dealer's licences and diamond dealer's licences and for application/report filings and access to geological data and public registers; prescribed charges may include annual charges payable on grant and shall be payable annually for the duration of the relevant right or licence; all fees and charges shall be demanded and recovered as a civil debt.

Holders of mineral rights must pay royalties to the State; the Cabinet Secretary sets rates and can require returns; royalty distributions are 70% National Government, 20% County Government, 10% local community.

A transaction for transfer of a mineral or mineral product is deemed to occur at the point of sale and is equal to the arm's length value of the mineral or mineral product.

Mineral right holders must keep up-to-date records including quantity and commercially relevant characteristics; the Cabinet Secretary may appoint a qualified person to inspect records and samples to verify royalties.

Holders must pay all fees, charges and royalties to the State into the designated account; mineral right holders must report monthly royalty liability by the fifth business day; the State department issues receipts on payment; statements are delivered to the Mining Cadastre Office.

If a mineral right holder defaults on prescribed royalties the Mining Cadastre Office must issue a thirty day notice; the Mining Cadastre Office must record the outstanding royalties; the Cabinet Secretary must suspend the licence or permit; if unpaid within sixty days the Cabinet Secretary must revoke the licence or permit; the Cabinet Secretary may prohibit disposal of minerals where royalties are not paid within the prescribed period.

Mineral right holders may apply to the Cabinet Secretary for a reduction or temporary suspension of a royalty rate; the Cabinet Secretary must make Regulations setting conditions and criteria for such applications.

Unpaid fees, royalties or other charges payable under the Act are deemed debts due to the national government and may be recovered summarily.

The Income Tax (Transfer Pricing) Rules (sub. leg) or successor legislation shall apply to transactions under this Act.

Establish and maintain an up-to-date computerized mining cadastre and registry system including a register of mineral rights; the register is a public document and may be inspected as prescribed in Regulations.

Section 192 requires the register to record details of applications and changes to mineral rights, allows the Cabinet Secretary to prescribe additional records, requires an online facility for applications, makes the cadastre public (inspectable for a prescribed fee), and requires the National Land Commission to keep a copy.

Power to correct the register when an error is made in the register.

Prepare, endorse, certify and issue to the holder a copy of the original.

An evidentiary certificate concerns the grant, transfer, assignment, suspension, revocation or termination of a mineral right in accordance with the provisions of this Act.

The Cabinet Secretary may designate qualified public officers as mines inspectors by Gazette notice; mines inspectors must monitor compliance, take enforcement action, and perform other required functions; the Cabinet Secretary shall issue inspectors with identification.

The inspector (and in one clause the Cabinet Secretary or mining inspector) has broad powers to enter, inspect, sample, seize, install monitoring equipment (with notice), order safety changes or temporary cessation, and arrest with a warrant in relation to prospecting, mining or mineral processing operations.

Police officers (Inspector or above) may stop and inspect postal or courier articles containing diamonds or strategic minerals when they reasonably suspect an offence; they must serve written notices to identified dispatchers to attend for opening, and must open and examine detained articles at specified times, releasing them or detaining them pending a court order.

Senior police officers (above Inspector) may arrest without warrant persons they reasonably believe committed an offence under the Act, and must take the arrested person before a court within the period specified in the Constitution and the Criminal Procedure Code.

The Cabinet Secretary or a public officer may apply to the Environment and Land Court to order a person to immediately stop activities related to searching for, prospecting, or mining a mineral when they reasonably believe the operations contravene the Act.

Subject to Article 157 of the Constitution, an authorised officer may institute proceedings in respect of any contravention of any provision of this Act or for any offence committed under this Act.

Section 202 creates offences relating to unauthorised operations and prescribes penalties: imprisonment not exceeding two years, a fine not exceeding ten million shillings, or both; and empowers the Court to order forfeiture of minerals on conviction or if satisfied an offence was committed even without a conviction.

Creates an offence of unauthorised possession of minerals punishable by imprisonment for a term not exceeding six months.

Offences relating to mineral rights holders are punishable by imprisonment for a term not exceeding three years.

Lists offences relating to hindering, refusing entry or access, impersonation, and failing to comply with lawful orders directed at the Cabinet Secretary or an authorised public officer, and prescribes penalties including imprisonment up to three years, a fine of not less than one million shillings, or both.

Makes it an offence to fail to keep required records, fraudulently alter required records, or make false or misleading statements in applications, reports, notices, records or disclosures required under the Act, with penalties including imprisonment up to twenty-four months, a fine of not less than one million shillings, or both.

It states an offence for contravening provisions concerning the exercise of rights or obligations under a mineral right or under any other licence or permit obtained under the Act.

It is an offence to place or deposit material with the intention of misleading another person about the mineral endowment or potential of a place.

It is an offence for a person to maliciously place a mineral in another person's possession or premises with intent to have that person convicted under this Act or its Regulations.

A person who disposes of, transports, exports or imports a mineral otherwise than under this Act or licence commits an offence and on conviction faces up to two years' imprisonment, a fine at least five hundred thousand shillings (or a fine commensurate to the mineral's value), or both.

It is an offence for a person to disclose confidential information except as allowed by specified provisions; on conviction the person may be imprisoned for up to six months, fined up to five hundred thousand shillings, or both.

Section 212 imposes liability where offences are committed by corporate bodies, partnerships, persons, employees or agents and sets conditions for when directors, officers, employers, principals or persons are liable.

A person who attempts to commit, or aids and abets, an offence under this Act (or its Regulations) is treated as having committed that offence and, if convicted, is liable to the same punishment as for the principal offence.

When it is necessary to determine whether someone holds a mineral right, licence or permit (or is authorized to engage in mineral dealings), the person alleging that status bears the burden of proof.

If a person commits an offence under the Act or its regulations for which no penalty is specified, they are liable on conviction to imprisonment for up to two years, or a fine of not less than two million shillings, or both.

When an offence under this Act or its regulations is committed by the holder of a mineral right or other licence or permit, the Court may order that the mineral right, licence or permit be revoked.

Holders of mineral rights (or their appointed agents) carrying out prospecting or mining must maintain insurance covering specified risks, particularly employee health and safety; and must provide certified insurance documents to the Cabinet Secretary when requested.

A notice sent to a person under this Act is deemed delivered if delivered personally or sent by registered post to the person's last known registered address.

The Cabinet Secretary and any public officer are exempt from being sued in a civil court for acts done in good faith when exercising or performing a function under this Act.

Public officers involved in administering this Act are prohibited from being granted mineral rights or certain licences and from holding interests in mining companies.

The Cabinet Secretary may publish and disseminate manuals, codes or guidelines relating to large-scale and small-scale operations, including environmental matters, and such publications may be used to show compliance or non-compliance with environmental obligations.

People who find radioactive minerals must notify the Cabinet Secretary immediately; holders of mineral rights must also submit a monthly written report to the Cabinet Secretary and the Director of Geology within the first week of each month about the previous month's prospecting and mining operations for radioactive minerals.

The Cabinet Secretary may make regulations necessary or convenient for the proper administration and implementation of this Act.

Regulations required to bring this Act into effect must be made within one year after the Act comes into force.