Mining firm signs first ever cooperation agreement with communities
The Kwale based Australian mining firm ‘Base Titanium’ signs its first ever mining contract with the local communities in Kwale and Mombasa counties.
The two coastal counties have entered into the annals of history after the signing of the Community Development Agreements (CDAs) in relation to the new Mining Act 2016.
The signed agreement will see the mining firm deliver local community development support programmes.
The CDA will see the local communities receive funding from the mining firm for development projects tailored to their needs.
The partnership agreement has been an ongoing consultative discussion in an effort to safeguard the sustainable development and growth of the local communities.
The new act among other things also introduces the sharing of mining royalties among the national government, the county governments and communities.
The Act stipulates that royalties are shared by national and county governments and communities on a percentage of 70-20-10 respectively.
The agreement signed will see about Sh.250 million shared annually between the CDAs in the two devolved units.
The signing agreement held at Jacaranda Beach Hotel in Diani, Kwale County was witnessed by the Cabinet Secretary (CS) for Mining and Petroleum John Munyes and Base Titanium General Manager for External Affairs Simon Wall.
Munyes noted that the CDA will present a progressive approach to addressing the endemic challenges in local communities encountering resource extraction.
“We have marked an important milestone in the operationalization of the mining Act 2016 and hope it would foster constructive dialogue between the mining company and the local communities” he said.
He termed the agreement between the mining firm and the host communities as an ‘outstanding precedent’ that would be replicated elsewhere in the country.
In the historic agreement the firm simply known as ‘Base’ which carries out large scale mining activities in Msambweni sub county of Kwale is obligated to remit one percent of their total earnings accrued from minerals exploitation.
The agreement in essence will see the mining company cede one per cent of gross sales revenue which will go towards development projects in Msambweni which is the main mining area, Lunga Lunga where persons affected by the mining activities were resettled and Mombasa that serves as the end point of the mineral transport corridor and storage facility before export.
“This signing of these agreements is an important milestone that will ensure equitable distribution as a result of large scale mining activities in the region,” said Munyes.
He said the new mining laws will in the long run attract investment and ensure host communities reap more economic benefit from the mining sector.
Munyes thanked the mining firm and the host community for their cordial relations noting that the government is committed to streamlining the lucrative mining sector to unlock mineral potential through the promotion of the Mining Act 2016.
He said the government is committed to the diversification of the country’s economy with the mining industry as one of the areas of focus as Kenya’s next economic frontier.
“We are alive to the fact that mining is a major contributor to jobs and economic development in the country and that is why we are out to promote Kenya as a favourable destination for mining investment” he said.
Munyes said that the operationalization of the CDAs will help in the identification of impactful community projects that are expected to be funded by the mining firm.
He said the community engagement was vital in entrenching the culture of dialogue which is important in averting unnecessary conflicts that are associated with mining ventures.
The agreement in essence will see the mining company cede one percent of gross sales revenue which will go towards development projects in Msambweni which is the main mining area, Lunga Lunga where persons affected by the mining activities were resettled and Mombasa that serves as the end point of the mineral transport corridor before export.
Base Titanium Community Relations Manager, Pius Kassim said the journey towards realization of the CDAs has been long and several stakeholders were involved.
He said the CDAs will leave a rich legacy of positive socio-economic development outcomes resulting from responsible mining practices of Base Titanium.
“This is pursuant to the Mining Act 2016 and Community Developments Agreement regulation 2017 that prescribes trickling down to the host Community of mining operations benefits where a guaranteed mandatory amount from the license holder goes to supporting community development projects,” Kassim said.
He said the Kwale mines project is based on a mine life of 13 years, and features a high grade ore body with a high value mineral assemblage such as rutile, ilmenite and zircon.
Mshenga Ruga who also chairs the Msambweni CDAs said that they were delighted at the prospects of having such committees in place to guide in development of projects that locals have a bigger say in.
He said the CDA offers the potential to inform, engage and resolve disputes with large scale miners at local levels and obtain benefits from mining activities.
“We hope that our plea for more funding will be accepted from the time this new agreement was passed so as to bring faster development in areas that border mining sites,” Ruga said.
MPs Mishi Mboko (Likoni), Kassim Tandaza (Matuga) and Feisal Bader (Msambweni) were present.
The MPs said they hope projects meant to empower women, the youth and people with disability would be given a priority.