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Minerals survey funding order splits Treasury and Parliament

Parliament has differed with the Treasury over a directive to the Mining ministry to seek foreign funding for surveying Kenya’s ores, arguing this would compromise the country’s interests.

The ministry was allocated Sh3 billion for the first phase of the national airborne geophysical study — meant to establish Kenya’s quantity and distribution of minerals — in the current financial year but the allocation is missing in the coming year.

The Treasury instead advised Mining officials to source for external financing, a move disputed by parliamentary Budget and Appropriations Committee.

“It is of the opinion of the committee that external financing is not the best option in conducting this very sensitive and important activity of mapping the country’s mineral resources,” the committee says in a report.

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The MPs also reckon that the survey should be conducted by Kenyan geologists to secure the country’s interests and sovereignty.

The outcome of the survey aims to provide a public database that will ease exploration hassles for investors, attract more capital and boost Kenya’s earnings from the nascent sector.

The government earns royalties from mineral.

The ministry early December awarded UK-based International Geoscience Services (IGS) a Sh300 million consultancy contract to help Kenya prepare for the actual survey whose tender would be issued later. A team of 16 Kenyan geologists will work with IGS in the exercise.

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Failed discussions

The aerial survey has delayed following failed discussions with China’s Geological Exploration Technology Institute (Geti) to conduct it using a grant from the Chinese Government.

Kenya and Geti signed an MoU three years ago but the project never took off because of lack of funds. The institute was to undertake an aerial survey for 24 to 36 months at a cost of up to $70 million (Sh7.1 billion), that was partly to be funded by the Export-Import Bank of China.

The bank failed to offer funding commitment, prompting the Kenyan Government to start the project afresh early this year.

Mining secretary Dan Kazungu said reviving the aerial survey project, which covers the entire country, is essential in creating a database of potential minerals to be marketed to local and foreign investors.

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Data designed to enhance accuracy of firms exploring the ores will be made available to investors at a fee.

Kenya is reported to be sitting on enormous mineral resources that could transform the economy.

Geologists and mining firms, however, say it is hard to tell the exact potential of the industry since mapping and quantification have not been done.

Among minerals discovered so far include gold, coal, titanium and rare earth even though the extractives sector contributes less than one per cent of the economy. 

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