According to the country’s Mining Secretary, Najib Balala, Moses Masibo has “stepped aside” as a task force investigates all licenses authorized between Jan. 14 and May 15.

Author: David Malingha Doya (Bloomberg)

Posted: Tuesday , 06 Aug 2013

The Kenyan government suspended its mines commissioner and revoked as many as 40 mining licenses after discovering possible irregularities in the granting of permits, Mining Secretary Najib Balala said.

Moses Masibo has “stepped aside” as a task force investigates all licenses authorized between Jan. 14 and May 15 amid an election and transition to a new government, Balala said today in phone interview.

“How do you issue a mining license to a major resource on election day?” Balala said. “We have revoked 31 to 40 licenses” of every type including prospecting, exploration and mining, he said.

The government announced last week it planned to improve transparency in the mining industry by halting new licenses to ensure proper approval procedures, such as environmental assessments, are respected. Of the 500 licenses granted for mining and exploration in the East African nation, 20 are active. Many permits are kept for speculation, Balala said.

A government-appointed panel will probe contracts dating to 2003 and may recommend reinstating some of the canceled licenses in a report expected within two months, Balala said. He declined to identify license-holders affected by the investigation.

Kenyan President Uhuru Kenyatta was elected on March 4, taking over from Mwai Kibaki who retired after two terms. Kenyatta formed a standalone mining industry to help develop an industry that represents less than 1 percent to the country’s economic output.

Gold, Rubies

Kenya is the world’s third-biggest producer of soda ash, used in the manufacture of glass, and ranks seventh globally in output of fluorspar, used to make steel, according to the U.S. Geological Survey. The country also has deposits of gold, rubies and sapphires, according to the African Development Bank.

Cortec Mining Kenya Ltd. said last month it had gained the final environmental approval to start producing niobium next year. Tata Chemicals Ltd., based in Mumbai, India, produces soda ash at Lake Magadi in Kenya, while West Perth, Australia-based Base Resources Ltd. owns the Kwale mineral-sands project in southeastern Kenya and Goldplat Plc operates a gold mine.

The proposed Mining bill, which has provisions for Kenya to hold stakes in mines, create a minerals sovereign wealth fund, and establish a minerals and metals commodities exchange, is ready to be presented to cabinet, Balala said.

No one answered the phone at the mine commissioner’s office in the capital, Nairobi, today when called for comment.

–Editors: Sarah McGregor, Karl Maier