kenya to give existing miners leeway

http://uk.finance.yahoo.com/news/kenya-existing-miners-leeway-local-174115853.html


Kenya to give existing miners leeway in local ownership move

Reuters - UK Focus

* New law requires miners to cede 35 pct to local investors
* Licensed miners will get special consideration
* New licenses will require immediate 35 pct local ownership

By Beatrice Gachenge

NAIROBI, Oct (KOSDAQ: 039200.KQ - news) 25 (Reuters) - Existing mining companies in Kenya will be allowed some flexibility in deciding how and when they cede more than a third of their subsidiaries to local investors under a new law, a senior government official said on Monday.
The new mining law published two weeks ago in a legal notice expects foreign-owned mining companies to give up 35 percent of their local operations to Kenyans.

However, Ali Mohammed, permanent secretary at the Ministry of Environment and Mineral Resources, told Reuters the government will give special consideration to foreign companies with existing mining licenses.
"For those who have been licensed, we have asked them to provide clear proposals on how they want to implement this, taking into consideration commitments they have and we will consider that," Mohammed said in a interview. "But for those who have not been licensed, it will be immediate. We will not be issuing any new mining licences without the ownership of 35 percent by local citizens."

Mohammed said there were several pending applications for new licenses.
Shares of Australia's Base Resources slumped 31 percent to a near three-month low on Monday on worries about the impact of the new law on its key mineral sands project in Kenya. The new requirement of 35 percent local equity follows a new tax of 10-20 percent targeting sales of property or shares in oil, mining and mineral prospecting firms, introduced recently to help plug a growing funding gap.

Data from the ministry shows there are 10 mining licences issued to investors, with six belonging to Kenyan companies including industrial gas suppliers BOC Gases and Carbacid. Besides Base Resources, other foreign companies with mining licences in Kenya include Kilimapesa Gold, wholly-owned by Britain's Goldplat PLC and Indian's Tata Chemicals.