Kenya’s Mining Act 2016, once lauded as a landmark in modern resource governance, is now drawing criticism from industry experts and investors who say it deters long-term investment.

A comparative analysis by policy and legal experts shows that, when measured against the standards of established mining jurisdictions such as Australia, Canada, and the United States, Kenya’s legal and regulatory framework falls short in several key areas — particularly in the treatment of investor rights, tenure security, and data ownership.

Under Kenya’s Mining Act, Prospecting Licenses (PLs) are valid for three years and renewable twice for a maximum of nine years. However, renewals are not automatic — companies must reapply and undergo full reassessment.

Since 2019, more than 90% of reapplications have reportedly been denied or left pending, creating what analysts describe as “regulatory uncertainty.”

In contrast, jurisdictions such as Canada and Australia guarantee renewal as of right when compliance obligations are met, ensuring tenure stability — a critical factor for exploration investment.

The Act obliges all license holders to submit geological and mapping data when applying for renewals or mining licenses. However, it does not guarantee confidentiality if a renewal is denied.

By comparison, countries like Australia and the U.S. protect such data for 5–10 years, preserving ownership rights and protecting investor-generated intellectual property.

Analysts warn that Kenya’s approach could amount to “data expropriation,” deterring private exploration.

The Mining Act grants the Kenyan government a 10% free-carried interest (FCI) in all large-scale mining ventures — giving the state dividends and board access without capital contribution.

While the intent is to ensure public participation, experts note that such provisions are rare in advanced jurisdictions, where governments rely instead on predictable taxes and royalties.

Critics argue that the FCI acts as an “implicit tax,” reducing investor equity and complicating project financing.

All mining licenses in Kenya are subject to the approval of the Mineral Rights Board (MRB), which has broad discretionary powers. Observers have raised concerns over opaque decision-making and long delays, with allegations of favoritism and political interference.

By contrast, advanced mining nations handle licensing through independent agencies, governed by codified rules and appeal processes, ensuring transparency and accountability.

Kenya’s fiscal framework divides royalties 70% to the national government, 20% to counties, and 10% to local communities, alongside requirements for local procurement and employment quotas.

While these measures aim to promote inclusivity, investors say the overlapping fiscal obligations create friction and unpredictability.

First World systems typically maintain simpler, more predictable revenue-sharing structures — relying on fixed royalties, payroll taxes, and enforceable community agreements.

Comparative Snapshot

Analysts agree that Kenya’s goal of maximizing national benefit from its mineral wealth is legitimate. However, they caution that the mechanisms used — from forced reapplications to discretionary approvals — are “overly blunt” and risk pushing investors toward more predictable African markets such as Tanzania, Namibia, and Botswana.

Policy analysts recommend targeted reforms, including:

• Automatic renewal of compliant prospecting licences.

• Statutory protection of proprietary exploration data.

• Replacement of free-carried interests with predictable fiscal instruments.

• Clear, appealable licensing procedures through an independent regulator.

If implemented, these measures could restore investor confidence and position Kenya as a credible destination for mining capital — one that combines national benefit with global best practice.

About The Author

Bill Otieno

Bill Otieno is a Social Entrepreneur, Executive Director of InfoNile Communications Limited and a Journalist at Large. Email : bill.otieno@infonile.africa

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