Kenya has announced a strategy shift in its mining sector from exporting raw minerals to processing them locally, in a bid to unlock jobs and generate higher earnings from exports. Secretary of Mines in the Ministry of Mining, Blue Economy and Maritime Affairs and chief executive to the Mineral Rights Board Thomas Mutwiwa explains the policy push, the delays around key value addition projects and how reforms are reshaping the sector.
Kenya has long exported raw minerals. Why the shift to value addition now?
For many years, we have looked at mining from a very traditional perspective, which is extract and export. But if you look at countries that have succeeded, they have moved beyond that. They process, they manufacture and they industrialise around their minerals. That is where the real value is.
In Kenya, we have the mineral potential, but that potential has not translated into significant GDP (gross domestic product) contribution. We deliberately want to move from just mining to value addition, so that we can create jobs, increase exports and earn more as a country.
What does this value addition look like in practical terms for Kenya?
It means putting in place facilities that can process minerals to internationally acceptable standards before export. Take gold as an example. Instead of exporting semi-processed gold, we will refine it locally to 99.99 percent purity. That is what fetches better prices in the international market.
We have started doing this for gemstones. Rather than exporting rough stones, we have started cutting and polishing them locally.
The same applies to industrial minerals like limestone, silica sand and others. We have built industries around limestone, and Kenya is now a net exporter of cement. We can also build more factories around silica sands which are used in glass manufacturing.
The Kakamega gold refinery is central to this plan, but it is behind the initial June 2025 schedule. What went wrong and where are you with this project?
The refinery is about 80 percent complete. Ideally, this is something that should have been done much earlier. But like many large projects, there have been challenges, mainly legal issues and litigation involving contractors.
We have addressed most of those issues, and we expect that within the next six months or so, the refinery should be up and running. Once operational, it will be a key facility in anchoring the gold value chain in this country and region.
How will the refinery change the gold sector?
The gold space in Kenya is enormous, especially along the greenstone belt stretching from Narok through Migori, Kakamega and into Turkana and Marsabit. A large population depends on this sector, particularly artisanal miners.
Right now, much of the gold leaves the country in raw or semi-processed form, and a lot of it is unaccounted for. With a refinery, we will create a structured system where gold from artisanal miners, small-scale miners and even large-scale operations is processed locally to international standards.
You have acknowledged that a lot of gold is smuggled out of the country. How does value addition address this?
Smuggling has been a big challenge because the value chain was not properly structured. What we are doing now is licensing every stage: from artisanal miners to dealers, leaching plants and elution plants.
The idea is to ensure that gold produced in Kenya moves through a formal system, right from extraction to processing to refining. Ultimately, we want most of the gold to be sold within the country and exported through a controlled channel.
Where do artisanal gold miners fit into this new model?
They are central to this project. We have already formed dozens of artisanal mining committees and licensed over 200 cooperatives. These miners produce a significant portion of the gold, but historically they have operated informally.
Now, we are bringing them into the formal system. We are also licensing facilities such as carbon-in-pulp and carbon-in-leach processors to handle their output. This ensures that even the tailings-the material previously considered waste-can be processed and contribute to overall production.
Apart from gold, what other value addition initiatives are underway?
The Voi Gemstone Centre is already operational. It is a common user facility serving the gemstone belt along the Mozambican geological formation. Artisanal miners can bring their stones there for value addition, including cutting, polishing and grading, before sale or export. We also have potential in industrial minerals. We already export clinker and cement products, but there is room to expand further.
You mentioned the need for more gold refineries. What is the plan ?
Kakamega is a starting point, but it will not be enough as production increases. There is room for at least one or two additional refineries, possibly in Nairobi or Machakos, to serve as aggregation and processing centres. However, those decisions will be made by higher authorities.
Critics say Kenya’s problem is not just processing but lack of credible data on mineral deposits. How are you addressing that?
That is a valid point. One of the reasons we have not realised our potential is limited investment in exploration. Without proper data, it is difficult to attract serious investors.
We recently conducted an airborne geophysical survey [between 2019 and 2022] and identified about 970 mineral anomalies. We are currently doing ground trothing. Once we have quantifiable data, we can convert these into bankable resources and move into production.
You have also tightened licensing rules after lifting the moratorium. Aren’t these reforms discouraging small players?
The intention is not to lock out genuine investors, but to ensure that only serious players enter the sector. In the past, we had what we call ‘briefcase miners’. Now, applicants must demonstrate financial capability, submit feasibility studies and provide clear work programmes. This ensures that licences go to those who can actually invest and deliver results.
How are communities benefiting from the resources mined from their areas?
The Mining Act 2016 introduced a structured system for sharing benefits. Royalties are distributed with 70 percent going to the national government, 20 percent to counties and 10 percent to communities. In addition, there is a requirement that at least 1 percent of gross sales go into community development agreements. These funds support local projects.
What revenues is the sector generating to the exchequer?
Over the past four years, we have collected about Sh15.6 billion in royalties. In between that period, there have been fluctuations and one of the reasons is the exit of Base Titanium which actually had an impact on revenues. But we are working to close that gap.