Kenya, Uganda strengthens control of mining sector

Kenya is taking a cue from Uganda by introducing legislation aimed at reforming its emerging mining sector, with the goal of enhancing the government’s control and supervision of this vital industry.

The Mining (Amendment) Bill that was tabled in parliament this September proposes establishment of a Mining Regulatory Authority to replace the current Mining Rights Board, and a Mining Rights Tribunal to deal with disputes resolution.

The Mining Regulatory Authority, in contrast to its previous advisory role, will now have regulatory control over the “exploration, extraction, production, processing, refining, transportation, storage exportation, importation and sale of minerals”.

As stated by the National Assembly’s Environment, Forestry, and Mining committee, the amendment is expected to enhance efficiency in the supervision of the mining industry by clearly distinguishing between policy formulation, administrative tasks, and dispute resolution functions.

Committee Chair David Gikaria said the act is made to implement a resolution.

“The Act as currently is, converges policy formulation and implementation, day-to-day administration of the Act including obligations owed to the mineral rights holders and dispute resolution at one point” he said.

“This presents implementation challenges and regulatory uncertainty in the mining sector. The Bill, therefore, proposes to first, elevate the role of the Cabinet Secretary to provision of policy direction in the sector”.

Uganda reformed its mining sector last year with the Mining and Minerals Act which seeks to “ensure the rational, integrated and safe exploitation and use of mineral resources”.

One of the key changes brought about by the new mining law is the creation of the Uganda National Mining Company. This company will have the opportunity to acquire up to a 15 percent equity stake in large and medium mining operations across the country.

The law is also meant to protect the country’s minerals and the environment, as well as promote value addition and beneficiation of minerals before they’re exported, which could see a rise in revenues.

The restructuring of the mining sectors in Kenya and Uganda coincides with reports forecasting increased demand for specific minerals essential for the future’s low-carbon economies.