PRESS RELEASE TASK FORCE ON REVIEW OF PROSPECTING, EXPLORATION & MINING PRESENTS REPORT As per the terms of Reference

of the Ministerial task force on review of Prospecting, exploration and Mining licences and agreements, constituted under gazette notice number 11573 dated 16th August 2013, Cabinet Secretary for Mining Hon. Najib Balala this morning received the interim report from the task force. The report was handed over to Hon. Balala by chairman Mohammed Nyaoga in the presence of the Principal Secretary for Ministry of Mining Ambassador Dr. Richard Ekai, acting commissioner for mines Moses Njeru and other task force members. The report shows glaring irregularities in the issuance of licences within the period between January and May 2013, with some companies receiving licences without meeting mandatory conditions precedent spelt out in the law (the Mining Act, Cap 306). Some licences were issued without proof of the companys ability to put them to use, while others did not demonstrate adequate financial capacity . Hon. Balala, upon receiving the report, announced that an administrative committee will deliberate on the recommendations of the report and advise on its implementation. The report reveals that only 22 companies of the 43 whose licences were suspended made their submissions to the task force. In summary, the task force arrived at the following findings

1.

That of the 43 files, 28 were still at various stages of consideration for different types of licences and only 15 had

been issued with licences. 2. That licences had been issued in some cases even where the requirements that are spelt out in the law (the Mining Act) were not met. In particular:

a) Whereas possession of a valid Prospecting Right is a requirement for the issuance of Exclusive Prospecting Licences (EPLs) and Special Licences, some licences were issued where the applicants did not have valid PRs; b) In some instances, licences were issued to entities that at the time of application for the said licences were not incorporated and neither possessed a Certificate of Incorporation nor a business name registration. c) Even though the consent of the local County Council is a requirement many licences were issued in the absence of the said consent or on the strength of outdated consent that was given, in some cases, as much as 20 years before the date of the present application;

. d) Some licences were issued even though financial capability was not demonstrated by the applicant and in some instances no financial documents are supporting the documents as required by law. . e) County Council consent given in respect of one location (district/county) were used in support of applications for licences in another location (district/county). . f) Where land owners consent was a precondition to issuance of licences, some applicants submitted letters purportedly written by local Chiefs or sub-Chiefs but not verifiable. . g) In some situations, licences were issued without proof that the statutory fees had been paid or on the strength of Mining

Deposits for a different licence. 3. Where the law did not impose mandatory requirements, there were cases in which the rationale for the exercising of discretion by the issuing authority was not evidenced thus leaving no option but to conclude it was not exercised responsibly. For instance, some licences were issued in situations where there was no proof of the applicants ability to put them to use and where the intention appeared speculative. In many cases, the applicants did not demonstrate adequate financial capacity. Some licences were in some situations issued in respect of large areas of land when the programme of work and expenditure proposal did not justify such awards. Applicants submitted County Council Consent from areas that did not have jurisdiction as the land fell outside the same. That consent was used to award licences contrary to laid down guidelines. applicants were informed of a PMLC meeting to be held in June of 2013 during which their applications would be considered even though their applications were considered, and in some instances granted, during the PMLC meeting of st the 31 January, 2013. However the Task Force was st informed that the PMLC meeting of the 31 January 2013 was not organized as was usual, but suffered from weak preparation due to the short time allowed before the meeting. The reason for such rapid organization was not given and could be interpreted as being in order to favour certain applicants. PMLC of the 31 January 2013 that approved most of the licences refers to documents submitted which were not
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6. Some

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submitted and are not on record. 8. Certain applications were considered despite disputes existing with landowners and/or parties claiming ownership of an extant licence, and the same dispute being on record. In some instances PMLC approved certain areas but from the license additional areas were granted sometimes not applied for. And considered in the PMLC meeting.

9.

Hon. Balala formed the task force under the chairmanship of Mohammed Nyaoga on the 16th August 2013 with clear terms of reference and mandate among which includes to review the status of all licences relating to prospecting, exploration and mining issued between January 2013 and May 2013 with a view to ascertaining their legality and establishing whether due process was followed in their issuance.