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The mining and quarrying sector remains in recession, weighed down by its third consecutive quarterly contraction in the three months ended June 2024.
Fresh data by the Kenya National Bureau of Statistics shows that the sector contracted by a further 2.7 percent in the second quarter to follow up dips of 6.9 and 14.8 percent in the fourth quarter of 2023 and the first three months of the year respectively.
The sector’s contribution to the overall gross domestic product (GDP) has remained largely lackluster at 0.7 percent as of 2023 and has not risen past 0.9 percent in the past five years.
The segment’s consequent contraction and its marginal contribution to output reflects the industry’s tough operating environment, including regulation, the exploitation of artisanal miners, the proliferation of the sector by speculators, and reduced production.
The government has recently moved to rekindle activity in the sector including the lifting of a blanket 2019 moratorium in October last year, which re-opened issuances of licences and permits for prospecting and mining. The partial lifting of the ban, following approval by the Cabinet, opened the door for investors to resume prospecting on all construction and industrial minerals such as limestone, gypsum, and diatomite. Prospecting and exploration of strategic minerals such as uranium and cobalt will, however, be approved on a case-by-case basis guided by Mining (Strategic Minerals) Regulations, 2017.
Less than 10 percent of the 1,162 applications assessed have been approved and applicants granted mining rights as the State Department of Mining seeks to weed out speculators.
“For those who have mining or prospecting licences, it is our responsibility to ensure that the conditions provided in the Act are adhered to. These include the requirement to start work within six months and ensure they adhere to the programme of work which they provided during licensing,” Mining Principal Secretary Elijah Mwangi said in a previous interview.
The total value of minerals produced declined by 4.3 percent last year to Sh33.7 billion from Sh35.2 billion previously, reflecting a decrease in the nettings from soda ash and Titanium ore minerals.
Titanium exports have fallen sharply in recent quarters on the depletion of ore in the mining areas resulting partly in the reduced output for the sector. The titanium ore minerals contributed to 71.8 percent of the total value of produced minerals or Sh24.2 billion beating earnings from other products including soda ash, salt, gold and gemstones.
The Ministry of Mining, Blue Economy, and Maritime Affairs said it is ready to improve the operating environment for stakeholders.
“We are committed to ensure that we meet stakeholders. Anybody who has a concern about our regulations and the way we are handling the licenses, we are …there to explain to them. We are committed to walking this journey together because our responsibility is to support those in mining,” Mr Mwangi added.
Kenya’s mineral wealth is conservatively estimated to be more than Sh852.6 billion ($6.6 billion) or an equivalent of 5.6 percent of GDP.
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