Mining and processing of gold without a licence issued by the state will attract a Sh500,000 fine or five years if a new bill is enacted.
The Gold Processing Bill, 2023 provides for mandatory license for a person or firm planning to venture in the business of collection, purification and processing of the material.
“The Bill seeks to establish a legal and institutional framework for collecting, purifying, smelting, fabricating, registering, monitoring and transporting of gold or products of gold,” the proposed law states.
The Bill, which also seeks to streamline the mining of the precious product which has been largely unregulated, is sponsored by Ikolomani MP Bernard Shinali.
Kakamega, Migori, Kisii and Homa Bay and Siaya are some of the counties where gold deposits have been found.
It’s set for introduction in the National Assembly for first reading.
The proposed law provides that a person or company shall apply for a processing license to the Mining Cabinet Secretary.
“The Cabinet Secretary shall not grant a processing license in respect of land which is the subject of a processing license or reconnaissance, a retention license unless the applicant is the holder of the licence,” it states.
The Bill establishes Gold Processing Corporation, a full-fledged state agency complete with a board, which shall, among others advise the CS before issuance of a license.
“The CS, on recommendation of the corporation, may grant a processing licence if satisfied that applicant has adequate financial resources, technical competence and processing industry experience to carry out the proposed programme of processing operations,” the Bill states.
The proposed law also states that a processing license shall be for a period not less than 25 years.
The holder shall begin processing operations within six months of the grant of the licence, or as specified in approval programme.
“The holder of a processing license shall enjoy that exclusive right to carry out processing operations in respect of gold or gold deposit specified in the license,” it states.
The holder shall also be mandated to sign a development agreement within the community where processing operations are to be carried out.
“The holder of a processing licence shall keep a complete and accurate record of the processing operations in the prescribed form at the registered office,” the Bill states.
It provides that licence holder can also notify the CS to cease or suspend or curtail processing operations
According to the Bill, the corporation, which may establish offices in other counties besides Nairobi, shall collect, sample, purify, smelt, fabricate, refine and transport gold and its products.
The corporation also develop, maintain and regulate national standards that comply with national standards for processing gold.
“The corporation shall regulate national standards for operation a gold refinery as well as registration and licensing of operating the refinery,” it states.
The entity shall also regulate the registration and licensing of laboratory that analyses, tests and grades the properties of gold for purposes of collecting, sampling, purifying and transporting gold and its products.
The corporation shall have a board chaired by the chairman and the secretariat headed by director general.
“The corporation may engage the services of such experts in respect of any of its functions in which they are considered to have special competence,” the proposed law states.