SPEECH BY HON. NAJIB BALALA, EGH.

, CABINET SECRETARY FOR MINING,

REPUBLIC OF KENYA DURING THE AFRICAN DOWN UNDER 2014 CONFERENCE
(ADU) AT THE PAN PACIFIC PERTH HOTEL, WESTERN PERTH AUSTRALIA
DELIVERED ON WEDNESDAY 3
RD
SEPTEMBER, 2014.
All Honourable Ministers for Mining, hereby present,
Executive Chairman, Paydirt Media Pty LTD, Bill Repard the Conference Organizers,
Mining Industry representatives,
Conference Sponsors,
Delegates,
Members of the Fourth Estate,
Ladies and Gentlemen
Let me start by saying mining in Kenya started in the in the 1930s and by 1940s a legal frame
work was put in place. Since then we have been maintaining the same legal framework of 1940
when the new government came in last year 2013 and I got appointed to the position of the
Minister for mining .The first Mandate I was given by my President is to make sure that a new
legal frame work is in place. However I must say that I have not completed that job because of
too many vested interests but I am glad to say that its now in the 3
rd
reading in our parliament.
Once that is done it will bring fundamental change in the mining sector. There will be
predictability of tenure for investors and also create transparency in the process of licensing .It
will also be clear on the equity and sharing of resources with communities, counties and the
national government. It is worth noting that previously the only serious mining was at Magadi,
for Soda Ash, Fluorspar, Salt and cement. Those are the traditional ones we have been mining
but now gemstones are being mined including Tsavorite stone, blue granite and also significant
gold mining in Western part of Kenya and parts of Lake Victoria. Iron ore has also been
discovered and recently discoveries have been made of Iron ore copper, coal, rare earth,
manganese, graphite and uranium and we hope we can discover more.
Ladies and Gentlemen,
So generally the mandate that I have is to make sure that we are able to benefit as a
nation and the first thing I was told to do is an in-depth audit once in office. As I said
earlier I am the first Minister on this docket. It was not easy as too many things are
happening in the system and we realized during the transition period there were a lot
of funny things happening, change of government, change of leadership and thats the
time when we cancelled 43 licenses. We appointed a taskforce to review all 43 licenses
and only one went to court, 15 submitted themselves to the taskforce to allow them to
re-apply afresh and we gave a chance to all of them who were serious and committed.
Some of them did not apply for a license and we have since done the cleanup and
slowly we will continue cleaning up until we get the serious investors.
Second mandate is to formulate a bill and create a legal framework and we are now in
the final month of making sure that this legal framework will be working. The
geological data and the surveys that were done were during colonial time in the 50s but
we believe we can use new technologies and also re-do some of the areas that were not
done.
We are also working on a financial framework to do an airborne survey for the
countrys entire five hundred and eighty five thousand square kilometers.
My ministry is also mandated also to put institutional frame work to develop the
department that will be managing the extractive industry. This will create regulation
and management of value addition. However let me emphasize that the legal
framework is most important as it guarantees predictability so you are guaranteed this
is a law that does not change when you bring your investments. Transparency is key in
the process for licenses because this is where the governments are opaque and you
dont know who gets it and what time you get it.
We have put a transparent system so you dont need to meet a minister, you dont need
to know a civil servant, you just apply and then the process goes on. If you are doing a
simple reconnaissance is 60 days because exploration is 90 days and mining is 90 days.
This guarantees that you know when you get it and you must respond to your
application and every application is first come, first served, and its all computerized so
nobody will hide your application form and put your competitor on top of it because
the timer and counting device will be there for you to know what queue are you .
We have also established a tribunal that if you feel you need to buy the ministers or buy
the process then you go to a tribunal. It is an independent judicial system. We also look
at issues of health, safety of workers, the miners themselves and environmental issues.
We also want to regulate the artisanal miners so that there is no conflict between the big
mining companies and the communities around. In this same bill we also talk about
compliances and the cut off dates of the compliances and the key issue for us is the local
content and the capacity building through the mining institute.
Distinguished Guests, Ladies and Gentlemen,
So these are the key issues that we have and then also to make sure that nobody
harasses the investor particularly now with the devolved system to make sure that there
is a committee development agreement when we do the mining. This is to ensure goal
posts dont change when leadership within the local communities changes and that
secures the investor from any harassment.
Let me also say Kenya has a major plan of how we are going to support the mining
sector and without a proper master plan we will not be able to support it. The plan that
affects the mining sector and expands to the economic development programme. Its
about infrastructure where we are going to talk about the standard gauge railway that
we have signed the contract with the Chinese from Mombasa to Kampala and to Kigali.
This is an ongoing project and the first phase will be commissioned by October this year
from Mombasa to Nairobi .The other phase and phases will continue and already a
regional conference is going on between the three countries of Kenya, Uganda and
Rwanda on the railway infrastructure.
Then there is the LAPSSET project the Lamu to Southern Sudan and Ethiopia corridor
and brand new port being built in Lamu. This is going to work with new oil deposits in
Northern Kenya so that our own oil can reach Lamu via a pipeline. We are in talks with
neighboring Uganda which has discovered a lot of oil in the last two years. We have just
awarded tender for coal fire plant in Lamu with a capacity of 960 megawatts and also
the pipeline project that will start from Northern Kenya to Lamu. Likewise there is also
the new governance we have brought in to the new Mombasa port to clear your
containers which used to take about 18 days and now has been reduced to three to four
days in the last one year.
So we are working to bring the cost of doing business down. To create an efficient
government we are automating most of government services with time lines for
delivering including the issues which are not necessarily mining, even your work
permits, passport registration, registration of companies all this will benefit the business
sector .
And finally is about energy we have a plan for the next 30 months we have a plan of
producing 5000 megawatts of energy. Already by end of this year we will have 2000
megawatts of energy then there is an additional of 960 of the coal fire plant in Lamu and
additional 960 in our new deposit of 400 million tons of coal 300kms away from Nairobi
and then gas plant in Mombasa with the Qatar government as well Geo-thermal. Our
capacity for Geo-thermal is 12000megawatts and we have not even done 10% of what
we have already.
So opportunities in investment of Geo-thermal and energy generation and transmission
are now available in Kenya. What we have decided as new government is we will not
have business as usual, we will change because we have been forced to change .The
new constitution dispensation has made us to change our thinking as government
system that we have. The new structures of devolution is accountability and sharing
resources with counties and communities thats why we talk about royalties 10% must
go to the counties and 70% must remain with National government.

The new structures of devolution emphasize accountability and sharing resources with
counties and local communities. Thats why we talk about 10% royalties must go to the
local communities 20% must go to the counties and 70% must remain with National
government. This must be governed in a way that 50% of that goes to the sovereign
fund and 50% of this is exclusively used for infrastructure development. So community
engagement is paramount in our structure and as might be you are aware, Kenya has
been very advanced in democratic process we have elections every five years.
In conclusion I want to say Kenya is a modern democratic state with an open market
economy with a vibrant and educated youth population. Almost 70 % of our population
is composed of the youth. We have a variety of good infrastructure in our country and I
have seen some of our neighboring countries come to us for facilitation when
addressing business issues.

In my closing statement I want to say that definitely we are now moving into a new
dispensation my team here want to learn a lot from you I believe Australia has more
knowledge to share with us and we are more than glad to welcome investors in the
mining sector. Our policy as ministry of mining is to roll out the red carpet and to avoid
any red tapes and we will help where we can with a serious investor.

THANK YOU