SPEECH BY HON NAJIB BALALA EGH CABINET SECRETARY OF MINING DURING THE OFFICIAL LAUNCH OF INFORMATION CENTRE FOR

THE EXTRACTIVE SECTOR (ICES) ON 11TH DECEMBER 2013 AT CROWN PLAZA HOTEL

R !"#$%& D"' ()#'* A+'"(%$ D , &#-. $) G'#/- G%0'" & N !%)/ P'"$("-%& S (' )%'1 M"$"2)'1 #+ M"$"$! A.03 D'3 R"(4%'5 E6%"* S $"#' #++"("%&2 R !"#$%& D"' ()#'* A+'"(%$ D , &#-. $) G'#/S $"#' #++"("%&2 S (' )%'1 M"$"2)'1 #+ M"$"$! L%5" 2 %$5 G $)& . $ I am grateful that we are congregated here this morning to officially launch the Information Centre for the Extractive Sector (ICES) At the outset, may I appreciate this noble underta ing which will go a long way in consolidating the different sta eholder efforts to ma e the mining sector more open hence beneficial to all the players in the industry! As you are aware, operations in the mining sector in this country has not been that transparent! "hilst the country has enormous mineral potential the sector has not substantially benefited the country and more so the communities who reside in mineral rich areas! It is against this bac drop that the government established the #inistry of #ining in #ay $%&' through an Executive (rder )o! $ to develop mining policy and promote mineral exploration and exploitation for the nation*s economic growth! In the past, the sector operated with scanty information available to sta eholders especially to new investors! +o change the status ,uo, my #inistry*s envisions -to be a national centre of excellence in the provision of mining and natural resources geo-information for sustainable development. . +o this end, today*s launch could not have come at a better time as it lends enormous support to the government*s endeavor to demystify what has been hitherto a sector shrouded in mystery ! In a nutshell, today*s activity mar s a ma/or milestone in the opening up the sector through information sharing! In today*s world, information sharing cannot be gainsaid and as the adage goes, information is power0 any progressive institution has no reason why

information sharing should not be prioriti1ed! "e as a #inistry are committed to developing and sustainably managing the mining and natural resources geo2information for social2economic development of 3enya! "hich we rec on, is achievable through02+eam wor , 4rofessionalism, Integrity, +ransparency and Accountability and more importantly through Sta eholders5 Consultation! +he #inistry is committed to actuali1ing the aspirations of the Constitution of 3enya $%&% by putting into context the provisions of articles 6%, 6$(&) (f), 66($) and 67 in as far as they relate to minerals! In this mission, the #inistry aims at achieving the following ob/ectives0 Actuali1ing the gains aspired by the constitution of ma ing 3enya a fair, ob/ective country by guiding the exploitation of minerals0 8eali1ing the aspiration of 3enya*s long2term development blue2print 9 :ision $%'% of ma ing the country a middle income country through increase in growth levels aided by the mining sector0 Actuali1ing the provisions of the mining laws by regulating the Industry and ensuring proper procedures in relation to licensing, exploitation and post exploitation environmental management0 8emoving all existing legal and regulatory barriers in the mining sector so that all parties can have e,ual access to investment opportunities within the mineral sector0 Implementing, enforcing and continuously evaluate the existing legislation and to apply rigorously the best mining agenda for the country0 Enhancing the #inistry*s supervisory role in the sector, deepening relations with International and ;ocal investors and fostering positive mutual relationships between all parties involved in mining0 Consolidating all the gains from the industry and ensuring e,uitable distribution of the proceeds between )ational, Counties and the local community in a mutually agreeable formula and to ensure that future generations are guaranteed of proceeds of today*s mining activities through the establishment of #ineral Sovereign <und0 and 8eali1ing the aspirations of ma ing 3enya a mineral and mining hub in Africa through establishment of mineral and metals exchange and setting up of an internationally accredited mineral audit laboratory and through development of a code of conduct for the sector!

#ay I emphasis that in the contemporary information based economies, the aforementioned ob/ective are only attainable and for any forward loo ing entity has no option but to open all the necessary channels of communication if it is to remain relevant!

In this regard I am particular glad that through the initiative of the African =evelopment >an ?roup, interaction among main groups affected by the sector will be enhanced through discourses aimed at fostering nowledge and better understanding of the sector! I therefore, on behalf of the #inistry and the government at large welcome the provision of the platform that will promote nowledge based sta eholder dialogue aimed at promoting informed policies in the sector!

+his is a shot in the arm in that the government*s efforts to transform the sector has not gone down well with some sta eholders who would li e to see the status ,uo maintained to the disadvantage of the country and communities residing in mineral rich areas! +he importance of the extractive sector cannot be over2 emphasi1ed! 3enya*s :ision $%'% recogni1es minerals and mining sector as one of the drivers of economic development and that is the reason why a seventh sector in the economic pillar has been introduced to factor the noted economic potential vested in our minerals! 3enya is relatively underexplored compared to other African countries! +he sector has potentials of earning the much needed foreign exchange, creating employment opportunities to 3enyans and spurring economic growth and development in the local communities! >ut the management of the sector, under the previous governance regimes, has not been een to reali1e this potential! +he sector was been managed by the =epartment of #ines and ?eology, which appeared to wor in a more secretive manner! +here was no transparency on the ways business was conducted, mining concessions were being issued to speculators which led to a situation where a license paper having more value than the resource defined under the license! +here was lac of strict adherence to the ;aws and procedures! +he #inistry needed to put thing in the right and continue to build investor confidence while ensuring that a good balance exist where the nation, the investor and the community benefit fairly from the minerals!

;adies and ?entlemen0 my address will not be complete if I don*t give you our roadmap!
In order to achieve its full potentials of #inerals and #ining sector, we as the ?overnment and people of 3enya ensure the following@ #aintain political stability in the country to promote development0 Attract massive investment through public2private partnerships and mar eting to attract foreign investors0 Capacity2build local labor force to reduce over2dependence on imported s illed labour! +his can be achieved through collaboration with localAinternational universities to train in speciali1ed courses in mining0 Involve the local community and ensure that a percentage of the payable royalties is invested in the communities to significantly improve their wellbeing0 =evelop and upgrade infrastructural facilities such as roads and railway transport and information, communication and technology! 4rovision of basic needs such as power, water and security will boost the sector0 8eview and enact appropriate policies and laws to ma e 3enya*s mineral and mining sector competitive0 +he entire East Africa region is poorly serviced in testing and certifications! +here is therefore immense potential of establishing an internationally accredited laboratory and testing centre which shall serve the region! +his will earn the country much needed revenue as well as ensure ,uality and ,uantity is not compromised! Currently, 3enya exports its raw minerals hence fetching diminished returns! +he potential in adding value is therefore undoubtedly high and critical! +hrough value addition, the value of our exports shall increase tenfold and conse,uently the royalty values to the government! Additionally value adding companies will definitely employ additional personnel hence contributing to employment creation!

PRIORITIES IN THE MINERAL SECTOR

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+he #ining >ill which aims at repealing the #ining Act cap! '%6 of &7B%s is at Cabinet awaiting deliberation! +he achievement was not without challenges from the investors who were beneficially of the archaic ;aws which have aided in unbalanced trade of our minerals! "e are focused and aim to finali1e the process and enact new mineral code by Canuary, $%&B! N%)"#$%&8"5 A"'0#'$ S/', 1

+he mineral wealth of the country has not been mapped to the extent that we have full detailed characteristics of the mineral deposit! +o ensure that we obtain this vital informational, a ?overnment to ?overnment understanding has been established between our country and the republic of China to underta e the survey! )egotiations on the actuali1ation of the #emorandum of Dnderstanding are on2going! E2)%0&"24. $) #+ A((' 5") 5 L%0#'%)#'1 S ',"( 2

)o exploration and mineral ,uantification is possible without consisted mineral assaying and testing! +he test results re,uire meeting international standards to be acceptable and reliable! +his is why we are establishing an accredited #ineral ;aboratory Services at #adini Eouse! +his will ensure that our minerals are not smuggled out being disguised as samples!

As I conclude0 #ay I call upon all the sta eholders in the mining sector to fully utili1e the electronic newsletters, website, round table discussions and wor shops to contribute for the betterment of the industry! "ith those remar s, may I once again than the African =evelopment ?roup for this noble underta ing which will help transform our #ining sector through empowerment with real2time information!

+han you all!