As controversy looms over the mining industry in Kenya, with mass cancellation of mining licenses deterring important prospects, it is easy to despair. Mining has not long been a Kenyan priority: the law governing the industry has remained almost unchanged since the 1940s until early this year when renewed interest in mining forced an update of the situation. The discovery of oil in Kenya’s Turkana region in 2012 brought mining into the forefront of the national discussion, a prominence that has refused to fade even in the face of ever more enthralling Kenyan intrigues.
The most recent saga that has seen mining operations slow to a halt involves the excavation of titanium, niobium and rare earth minerals in Kwale, itself a hotbed of dispute over land ownership issues, notably where residents sold the title deeds recently issued by the government at dismally throw-away prices. While this is all doubtless engaging to the mining sector players, what does it have to do with logistics? Simple, logistics is the backbone of the industry.
Mining companies usually have to contend with the decision on whether to use internal logistics or outsource to a specialized company. This takes into consideration all the logistics functions associated with mining, such as temporary warehousing and transport.
International companies with large operations may decide to look inward for supply chain management, but those with more limited resources can consider local firms which are likely to be familiar with the terrain and restrictions or procedures for clearing mining products at ports or borders. Local mining firms can weigh the cost of hiring an external company versus bearing costs themselves, as well as other factors, such as experience in such logistics which an external firm may have that they do not.
Once this has been settled, the issue of warehousing is discussed. In most mining situations, the term “warehousing” is used lightly as products are usually freighted away from the mine at the first chance. Nevertheless, warehousing considerations vary depending on what the mining focus is. In cases of rare minerals, precious stones, metals or oil, security becomes a key factor. Commodities that are easily stolen for personal use or sale require a serious effort on the part of the supply chain managers to keep safe. Strict taking of inventory and vigilant security measures are necessary to ensure that all spoils remain in the rightful custody until they can be shipped away.
Security remains a key issue for these types of products even as they are shipped, taking care to avoid external threats of theft as well as internal pilfering. When moving materials from the site of the mine to their secondary processing location, it is essential to pick the correct method of freighting. The most glaring limitation is availability of the chosen transport medium.
In areas such as Kenya, where rail network is limited and often excludes mine-rich areas, logistics firms in this industry are automatically denied the choice of rail travel. Next, cost is weighed. For most mining operations, carrying materials from the mining site by plane is uneconomical and unnecessary. For majority of mines, road travel is the most wallet-friendly and versatile option. Where products are being moved outside the country, say for processing, road transport can be used to connect to ports where freighting is transferred to water-travel. What we call multi-modal freight.
The sustainability of freighting methods must also be taken into consideration. In remote areas with little or no road network, it is likely that vehicles used in freighting of mining produce will suffer damage that comes with the rigors of rough or unfamiliar terrain. Mining firms, or the logistics companies operating on their behalf, must have this in mind while discussing logistical strategy. A necessary discussion it is: mining, like most industries, would be lost without the logistical function.
Logistics, likewise, draws a fair amount of revenue from the exploitation of Kenya’s natural resources, hence we in the industry should be keen to pay attention to current mining events and play our part in pushing for its progress.