Governors to get a sit in minerals board

By: OTIATO GUGUYU

A representative of the Council of Governors will sit at the Mineral Rights Board after a Senate committee introduced changes to the Mining Bill set to be debated Thursday.

Senate needs to pass the Bill to beat the August 27, deadline of publishing the Mining Bill, which will have a huge impact on the mining sector.

Introduction of membership from governors is seen as a key strategy to mediate conflicts arising from confrontations between county governments and mining companies.

“After the creation of the mineral rights board in parliament made of technocrats, the Senate committee has now included a representative of Council of Governors,” acting chief executive officer of the Kenya Chamber of Mines Stephen Mwakesi said.

Mr Mwakesi said since mining takes place in the county having a CoG representative in the body charged with responsibility for consideration of licenses will give it a devolution perspective,” he said during an interview with the Nation.

Devolution has become a major encumbrance to mining companies after county governments targeted some companies for extra revenues through cess and transport levies.

MANAGE COSTS

“Mining companies have set parameters of how to manage their costs and introducing new charges takes away the predictability of costs,” Mr Mwakesi said.

He said the move is likely to mediate such conflicts and to have a definite framework in which miners can operate fluidly.

The Kenya Chamber of Mines boss says reduced electricity charges for its members and clearer royalty rules as it seeks to lower production costs and nurture the growth of the sector.

He said one of the biggest problem in the industry is the tendency in government to change goal posts because there was no clear fiscal policy.

“It is very difficult to invest when you do not know whether the conditions when you applied will still subsist by the time you are drilling your first hole,” he said.

Mr Mwakesi said the industry has been rocked with changes including the introduction of new royalty rates in 2014, capital gains tax with regards to extractives and the ninth schedule of the income tax act which is subject to an annual review.

He said the chamber, which marked fifteen years this year is pushing for a fiscal regime in the new mining law, so that it includes stability clauses and consensus on royalties to encourage stability and attract investment.