Only one gold dealer licensed, says Mining CS

Mining Cabinet Secretary Dan Kazungu displays a bar of gold produced at the new processing plant in Kilimapesa in Lolgorien, Narok County, owned by UK's Goldplat.

The Government is cracking down on firms and individuals illegally trading in minerals in efforts to clean up the mining industry.

The Mining ministry has said only three firms have been licensed to undertake mineral dealings in the country, meaning that dozens of companies that claim to have dealer’s licences are undertaking the trade illegally.

In a public notice issued on Friday, Cabinet Secretary Dan Kazungu said only Aurical Kenya has been licensed to carry out gold dealings while two other firms – Modogashe Agencies and Match Electricals – are licensed to deal with minerals other than gold.

The statement by the ministry comes even as it emerges that hundreds of Kenyans and even visitors to the country are being duped into paying huge sums of money for what turns out to be fake gold, mostly brass being passed off as genuine gold.

While fraudulent dealings in minerals are not new in the murky industry - where the State is only starting to gain control - they seem to be on the rise and the Government is sounding an alarm on the amount of fake gold as well as irregular and illegal documentation being used in the trade.

Mr Kazungu said there has been a rise in the number of fraudsters purporting to be gold dealers who lure clients into buying metals polished to give them a golden appearance and use forged documents to convince buyers that the metals are genuine.

He added that the rogue operators have given Kenya a bad name and could hamper the country’s plans as it tries to emerge as a mineral centre.

While it has in the past undertaken mining at small scale artisanal levels, Kenya is making efforts to emerge as a regional mining and mineral hub.

“In the recent past, there has been a noted increase in the number of reported cases of fraud involving gold dealings and exports in the country. The fraud is committed by persons passing with huge quantities of gold available at discounted prices,” Mr Kazungu said.

Unsuspecting

“Their victims have been unsuspecting Kenyans and foreign nationals. The international dimension to the fraud is negative to Kenya in the world of minerals and mining.”

Kenya is currently not a major producer of gold, with only one large mine operational in Narok as well as numerous artisanal miners. It, however, appears that fraudsters are taking advantage of the planned mineral hub status and using forged documentation from the ministry to pass off other cheaper, sometimes useless, metals as gold.

Gold mined in the region, mostly from the unstable Democratic Republic of Congo, is among the various minerals traded informally.