Kenya can produce 12 tonnes of gold every year, says mines commissioner

By Amos Kareithi

Kenya: Although Kenya is still using archaic laws to regulate mining, there is hope that the sector can drive the country’s dreams of economic transformation and prosperity.

The acting Commissioner of Mines, Moses Njeru told The Standard that he is confident Kenya has what it takes to join the league of gold exporting countries.

The commissioner said these hopes were validated by the smelting of 13.5 kilos of gold by Kilimapesa Gold Pty limited, a clear demonstration that it is commercially viable to mine gold in Kenya.

“There are indications, going by the increased interest in mining both by the small-scale and the commercial miners, that this country has a huge potential in exploitation of gold.

“With proper legislation and Government facilitation, Kenya can produce at least 12 tonnes of gold every year,” he added

The commissioner argued that if one commercial producer could smelt 13.5 kilos of gold in a month, it is possible to enhance this given there is yet another licensed miner, Karebe, who operates in Turkana.

But the commissioner’s optimism is guarded because gold production is highly dependent on global happenings, which may cause fluctuation of prices. “Most producers opt to scale down production when the prices are down. In fact, Kilimapesa has been operating on minimum production due to unfavourable prices in the global market,” the commissioner explained.

At the same time, highly placed sources at the Ministry of Mining have confirmed to The Standard that Kenya has been producing 500 kilos of gold every month through an estimated 100,000 small-scale miners who are raking in billions of shillings.

However since gold marketing is unregulated, the estimated 6,000 tonnes produced by small-scale miners is smuggled out of the country by dealers who make a killing at their expense.

This week we established that the informal price of gold was averaging Sh2,800, meaning that a kilo is being bought at Sh2.8 million.

“We have been losing about Sh16 billion to unlicensed dealers who smuggle our gold into neighbouring countries. We need to stem this loss as it could earn us a lot of foreign exchange,” said a source who cannot be quoted as he is not authorised to speak to the Press.

We also discovered that some small-scale miners are blowing the money io drugs, sex and other unsustainable expenditure like marrying a second or third wife instead of reinvesting the money in their mining business.