Kenyan mining act to help attract new major investments
A historic and outdated Kenyan mining act, which held back investment in the sector, has been replaced by a new mining act designed to work closely with new mine developers to ensure maximum benefit for Kenya.
In an interview with Mining Review, Kenya’s new Mining Cabinet Secretary/Minister of Mines Hon. Dan Kazungu, believes that Kenya is an attractive mining destination for new developers due to only a small number of companies operating in the country.
“With just a handful of companies operating in the country, Kenya is an attractive mining destination which offers mining companies and investors vast opportunities to discover and tap into new Greenfield projects,” he says.
Kazungu believes the “historic and outdated” colonial mining act which was passed in 1940 is largely responsible for the lack of major investment in the sector. But, after two years or negotiations with the Kenyan Chamber of Mines and its members, the Kenyan President Uhuru Kenyatta signed the new mining act in May this year.
The act calls for an open and transparent legal framework with regulations in place designed to ensure maximum benefit for both Kenya, both current and potential new mine developers and their shareholders.
“We have now positioned ourselves for a significant upturn in mining investment which will see this country become a world-class mining jurisdiction and contributor to widespread economic transformation in Kenya and even possibly the new mining hub for the entire East African region.” He said.
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Global iron ore production to recover by 5.1% in 2021
Global iron ore production fell by 3% to 2.2bnt in 2020. Global production is expected to grow at a compound annual growth rate (CAGR) of 3.7% to 2,663.4Mt between 2021 to 2025. The key contributors to this grow will be Brazil (6.2%), South Africa (4.1%), Australia (3.2%) and India (2.9%). Key upcoming projects expected to commence operations include South Flank in Australia (2021), Zulti in South Africa (H2 2021), Serrote Da Laje in Brazil (H2 2021) and Gudai-Darri (2022), according to GlobalData, a leading data and analytics company.
Vinneth Bajaj, Associate Project Manager at GlobalData, comments: “Declines from Brazil and India were major contributors to the reduced output in 2020. Combined production from these two countries fell from a collective 638.2Mt in 2019 to an estimated 591.1Mt in 2020. The reduced output from the iron ore giant, Vale, was the key factor behind Brazil’s reduced output, while delays in the auctioning of mines in Odisha affected India’s output in 2020.
“Miners in Australia were relatively unaffected by COVID-19 due to effective measures adopted by the Australian Government, while a speedy recovery in China led to a significant 10.4% increase in the country’s iron ore output.”
Looking ahead, the global iron ore production is expected to increase by 111.3Mt to 2,302.5Mt in 2021. Rio Tinto is expected to produce up to 340Mt of iron ore, while BHP has released production guidance of 245–255Mt, supported by the start of the Samarco project in December, which is expected to produce between 1–2Mt.The company has retained its guidance for Australian mines at 276–286Mt on a 100% basis, due to scheduled maintenance work at its ore handling plant and tie-in activity at the Area C mine and South-Flank mine.
Bajaj added: “The remaining companies are expected to produce more than 600Mt of iron ore, including FMG, whose production is expected to range between 175–180Mt supported by its Eliwana mine that commenced operations in late December 2020, and Anglo American, which is expecting to produce between 64–67Mt. Vale is expected to resume 40Mt of its production capacity, taking its overall production capacity to 350Mt in 2021, with production guidance of 315-335Mt.”