Kenya’s earnings from mineral royalties rose 18.8 per cent last year, signalling a recovery driven largely by tighter regulation of quarries and construction materials following the exit of the giant Australian miner, Base Titanium.
Data from the Ministry of Mining shows royalties rebounded to Sh3.8 billion in 2025 from Sh3.2 billion in 2024.
Despite the recovery, the 2025 earnings remain below the recent peak in 2022 when collections stood at nearly Sh5 billion before easing to Sh3.7 billion in 2023 and dropping further to Sh3.2 billion in 2024, underscoring the lingering impact of the shutdown of large-scale operations in Kwale.
The dip in 2024 followed the depletion of titanium ore, which marked the end of one of the country’s most significant mining operations.
Over its 11-year run, Base Titanium exported about 5.2 million tonnes of mineral sands, including 3.89 million tonnes of ilmenite, 804,000 tonnes of rutile, and 295,000 tonnes of zircon, alongside smaller quantities of other minerals.
Its closure left a gap in royalty collections, exposing Kenya’s reliance on a handful of large-scale extractive projects. But ministry officials say the 2025 recovery reflects a deliberate policy shift to broaden revenue sources, particularly by formalising previously under-regulated quarry activities.
“We have had a number of shocks in between. This year, for example, Base Titanium is not there. But then again, we are closing in on the quarries,” the Mines Secretary in the Ministry of Mining, Thomas Mutwiwa, said, pointing to increased licensing of operators producing ballast and road construction materials.
Quarries—which have long been a backbone of Kenya’s booming construction and infrastructure sectors—are emerging as a critical new revenue frontier.
For years, many operated informally, escaping royalties despite steady extraction volumes tied to public works and the growth of the real estate sector. Top among these are quarries which supply ballast, murram, and other construction materials for roads, real estate, and infrastructure projects.
The government is now bringing these operators into the formal system, subjecting them to licensing, compliance, and royalty payments. Mr Mutwiwa, who also serves as secretary to the Mineral Rights Board, says this shift is helping to stabilise collections, given that quarry output is largely consumed domestically and is less vulnerable to global commodity cycles.
Kenya’s royalty regime varies across minerals, with rates designed to reflect their value and market dynamics.
Rare earth elements attract an eight per cent levy on gross value, while metallic ores such as copper are charged at five per cent. Precious metals like gold are subject to a three-per cent royalty, and gemstones fall within a 1 to 6 per cent range depending on type and quality.
Industrial minerals, which are increasingly central to the quarry segment, also contribute significantly.
