Kenya Mining (Royalty Collection and Management) Regulations 2024 (Legal Notice 106)

Mechanism

Section 183 of the Mining Act 2016 grants the Cabinet Secretary power to make regulations on royalty assessment, collection, remittance and management. LN 106/2024 fills that gap by:

• Royalty base — gross sales value of the mineral at the point

of sale or export, with adjustment provisions where the Director of Mines is satisfied the mineral is consumed exclusively within Kenya (allowing on-site or delivery valuation in lieu of export parity).

• Rate schedule — mineral-specific ad-valorem rates set out in

the Schedule (separate from the headline royalty percentages carried in section 184 of the Mining Act for principal commodity classes).

• Payment window — royalty due within 120 days from the final

day of the month in which the sale occurs.

• Late-payment penalty — administrative penalty equivalent to

the prevailing Central Bank of Kenya interest rate, compounded.

• Revenue allocation — 70% national government / 30% county

government, with the county share deposited into a County Mineral Royalties Account and further allocated 60% county / 20% community development / 20% landowner royalties (i.e. ~18% / 6% / 6% of total royalty respectively after the national withholding).

• Digital reporting — assessment and remittance to flow through

the Online Mining Cadastre, replacing paper returns to the State Department for Mining.

• NMC strategic-minerals tie-in — the regulations operate in

combination with the October 2023 reclassification that places REE, niobium, lithium, graphite, coltan and several other battery/defence-critical minerals into a "strategic" tier requiring case-by-case licensing through the National Mining Corporation as state-participation joint-venture vehicle.

Downstream implications

• First Kenya entry in the IPTM register; Kenya is emerging as a

Tier-2 critical-minerals jurisdiction with confirmed niobium and REE deposits at Mrima Hill (Kwale County), graphite at Vipingo, titanium at Kwale (Base Titanium operating, transitioning to local successor following 2024 closure), and active Chinese, Australian and UK investor pipelines under the post-2023 lifted moratorium.

• The 70/30 split with structured community/landowner shares is a

meaningful EM resource-revenue-sharing template — closer to Indonesia's bagi hasil migas model than to Tanzania or Zambia practice in the same year.

• Strategic-mineral classification via NMC raises the entry cost

for foreign investment in REE, lithium, graphite, niobium, coltan — converging Kenya's regime with Mozambique, Indonesia (hilirisasi), and Bolivia state-participation patterns.

• High Court vacatur in September 2025 leaves operators in

regulatory limbo: the Mining Act framework continues to apply but the standardised mechanics of collection are unsettled until the Cabinet Secretary re-promulgates following adequate public consultation.

Open questions

• Whether re-promulgation of the regulations following the

September 2025 High Court ruling preserves the same rate schedule and 70/30 allocation, or whether the Ministry uses the consultation reset to recalibrate.

• Treatment of REE, niobium, graphite, lithium royalty rates in

the Schedule — public extracts focus on principal commodity classes; the granular strategic-minerals rates determine impact on Mrima Hill and Vipingo project economics.

• Interaction with the National Mining Corporation joint-venture

equity model: whether NMC carry costs are creditable against the royalty base or treated as separate fiscal stream.

• Whether the September 2025 ruling has been appealed to the Court

of Appeal and what interim collection regime applies in the meantime.