Mineral prices move in cycles, and a deposit that is profitable at one price can be unmineable at another. Kenyan law answers this problem with the retention licence, which lets a holder who has proved a deposit keep tenure while markets catch up. This note explains how retention works under the Mining Act 2016 and why it matters for security of tenure. For investors, the question is how to hold a valuable discovery without abandoning it or breaching the Act.
What is a retention licence?
Under the Act, a retention licence is available where a mineral deposit has been identified through prospecting but cannot be mined economically for the time being. The licence preserves the holder’s position over the deposit for its term while prices, technology or infrastructure change the economics. The Act is published on Kenya Law. It is a deliberate holding position, not a way of avoiding work obligations altogether.
When should a holder apply?
Timing matters. The licence responds to temporary economic conditions, not to indefinite indecision, so the application should rest on credible evidence: market data, feasibility work and an account of what would change the answer. Holders who wait until a prospecting right is about to lapse lose their strongest footing. Applications made in good time can be supported by the prospecting record itself, which is the best evidence available.
What obligations continue during retention?
- Payment of prescribed charges on schedule.
- Compliance with the conditions attached to the licence.
- Reporting through the Mining Cadastre Registry.
- Environmental obligations that survive the pause in operations.
- Any continued exploration, recorded and reported as required.
- Care of the ground, including safety at abandoned workings.
How does retention protect an investment?
Tenure is the asset that lenders and buyers price. A retention licence keeps the deposit inside a granted right rather than in limbo, which supports financing conversations and preserves option value. Our mining law practice advises on retention strategy and renewal timing, and our project finance team supports holders preparing for the funding that development will eventually need. Companies that treat retention as part of a long-term plan, with dated milestones for revisiting the economics, re-enter the market prepared.
For guidance on your specific situation, contact CS Advocates LLP , call, WhatsApp, or book a confidential consultation at our Westlands, Nairobi office.