Kenya’s minerals belong to its people. Article 62(f) of the Constitution declares minerals as defined by law to be public land, and the Mining Act 2016 puts that constitutional principle into practice through a structured licensing regime administered through a digital cadastre system. Anyone seeking to explore for or extract minerals in Kenya, whether a multinational investor or a small-scale community operation, must first secure the right mineral right from the State Department for Mining. This guide explains the licence categories, the application process, and the obligations that come with each.
The Legal and Institutional Framework
The Mining Act, No. 12 of 2016 governs the exploration, mining, processing, and trading of minerals in Kenya, replacing the older Mining Act of 1940. Section 5 confirms the foundational rule: a person shall not search for, prospect, or mine any mineral, mineral deposit, or tailings in Kenya unless granted a permit or licence under the Act. The sector falls under the Ministry of Mining, Blue Economy and Maritime Affairs, with the State Department for Mining responsible for policy, the Mineral Rights Board reviewing applications, and the Cabinet Secretary holding final authority to grant most mineral rights.
The Online Mining Cadastre Portal
All mineral right applications, renewals, and transfers in Kenya are processed through the Online Mining Cadastre Portal, a digital system the Mining Act specifically provides for to manage mineral rights from application through to compliance, renewal, surrender, and revocation. The portal allows applicants to view a live map of mining blocks across the country, check which areas are already held or under application, enter geographic coordinates for a proposed licence area, upload supporting documents, and track the status of pending applications. This transparency is a deliberate design feature: once an area is marked as taken on the portal, overlapping applications are automatically prevented.
The Five Main Categories of Mineral Right
The Act creates several distinct categories of permit and licence, each suited to a different stage and scale of mining activity.
Reconnaissance Licence. A reconnaissance licence permits non-exclusive, large-scale geological surveying to identify mineral potential across a wide area, without conferring exclusive rights to develop any specific deposit found.
Prospecting Licence. A prospecting licence is granted for focused mineral exploration and mapping over a defined area, typically valid for two years and renewable subject to meeting the conditions attached to the original grant. Section 73 sets a maximum area for a prospecting licence, and section 81 governs renewal.
Retention Licence. Where a prospecting licence holder identifies a viable deposit but is not yet ready to proceed to full mining, for example due to market conditions or financing timelines, a retention licence allows the right to be preserved for a defined period without immediately committing to extraction.
Mining Licence. A mining licence authorises commercial mineral extraction and is typically valid for five years, renewable. Section 102 sets out restrictions on mining licences, and section 107 confirms the standard term.
Special Mining Licence. Reserved for large-scale operations of national significance, a special mining licence can be granted for up to twenty-five years, subject to periodic review and renewal, reflecting the scale of capital investment such projects typically require.
In addition to these large-scale categories, the Act introduced an Artisanal Mining Permit specifically for Kenyan citizens undertaking traditional and customary small-scale mining, typically valid for three years and issued by the Director of Mines’ representative at county level with recommendations from local Artisanal Mining Committees. Notably, the technical capacity and financial resource requirements that apply to large-scale operations are expressly relaxed for artisanal and small-scale mining wholly owned by Kenyans.
Separately, anyone wishing to buy and sell minerals commercially, rather than extract them, requires a Mineral Dealer’s Licence, with a distinct and more stringent Diamond Dealer’s Licence for dealings in diamonds specifically.
Eligibility Requirements
Section 3 of the Act sets out who may hold a mineral right. An individual or company must demonstrate the required technical capacity, expertise, experience, and financial resources to carry out the proposed operations, although this requirement does not apply to artisanal mining operations wholly owned by Kenyans. Where the applicant is a company, its directors must individually demonstrate the requisite technical capacity and financial standing. Applicants must also not be otherwise disqualified under any written law, which in practice includes screening against beneficial ownership and sanctions considerations for larger transactions.
The Application Process
A typical large-scale mineral right application proceeds as follows:
1. Register on the Online Mining Cadastre Portal and await account approval. 2. Select the appropriate licence type and define the proposed licence area using the portal’s coordinate entry tool. 3. Upload supporting documentation, which for most applications includes proof of legal access to the land, a NEMA-approved Environmental Impact Assessment report, a KRA Tax Compliance Certificate, and evidence of financial and technical capacity. 4. Pay the prescribed application fee, which varies by licence type and typically ranges from KES 5,000 to KES 50,000. 5. The Licensing Division reviews the application for completeness before forwarding it to the Mineral Rights Board for substantive consideration. 6. The Cabinet Secretary grants or refuses the application based on the Board’s recommendation.
Section 100 allows any person or community to object to a pending application: within twenty-one days for a prospecting licence application, or within forty-two days for a mining licence application. The Cabinet Secretary must hear and determine any objection before finalising the grant, which means community engagement at an early stage can materially affect both the timeline and the eventual terms of a mineral right.
Royalties and Ongoing Obligations
Mining licence holders are subject to royalty obligations typically ranging between 1 percent and 8 percent of the gross value of mineral sales, calculated as the arm’s-length value of the minerals at the point of sale within Kenya, without deductions or discounts. Beyond royalties, holders of mineral rights face continuing obligations under the Act, including annual financial reporting, record-keeping requirements, employment and training quotas for Kenyan staff, local equity participation requirements for larger operations, and compliance with environmental, occupational health, and water rights legislation that operates alongside the Mining Act rather than being displaced by it.
Government Participation and Mineral Agreements
For significant mining projects, the Act contemplates the negotiation of a mineral agreement between the State and the licence holder, setting out bespoke terms including government participation arrangements in the mining venture. These agreements must be published, and section 120 sets out specific requirements for their conclusion and execution. Strategic minerals, those the State has designated for special protection, carry an additional layer of control: section 22 confirms a right of pre-emption in favour of the State over strategic minerals before they are sold, meaning the government has first option to acquire such minerals ahead of any third-party buyer.
Assignment, Transfer, and Mortgage of Mineral Rights
A mineral right is not entirely freely transferable. The Cabinet Secretary’s consent is required before a mineral right can be assigned, transferred, mortgaged, or traded, and that consent cannot be unreasonably withheld, with a decision required within thirty days of a complete application. This matters significantly for project finance structures, since lenders taking security over a mining project need to factor in the consent requirement when structuring a charge over the underlying mineral right.
How We Can Help
Clay & Associates Advocates advises investors, mining companies, and community stakeholders on mineral right applications, compliance with the Mining Act’s reporting and local participation requirements, and the structuring of mineral agreements and project finance arrangements involving mining assets. If you are exploring investment in Kenya’s mining sector, whether at exploration or commercial extraction stage, our regulatory and compliance team can guide your application through the Mining Cadastre Portal process and advise on the surrounding environmental and community consultation requirements.
For the governing legislation, see the Mining Act, 2016 on the Kenya Law website, and the Mining Cadastre Portal for current application procedures and fees.
