MINERAL PUZZLE

Titanium exports to cease in four years if Base fails to expand

Efforts by the company to explore minerals in other parts of Kwale have been met with resistance in some part of the region

In Summary

• Base Titanium is seeing to expand mining activities in Vanga and Msambweni areas.

• About 1,000 jobs at stake if the company fails to expand its operations beyond four years.

Base titanium company in Likoni,Mombasa. /FILE
Base titanium company in Likoni,Mombasa. /FILE

The country has just four years to benefit from titanium mineral revenues if current plans by Base Titanium to expand its operations in Kwale fail to materialize.

This comes as Australian mining company-Base Titanium moves to a new site on its Special Mining Lease in Kwale, with the current mines’ life approaching its end.

Base has exhausted the ‘Central Dune’ which it commenced mining in October 2013 to June 2019, and has now moved to the last site, the ‘South Dune’ on its current licence.

The South Dune’s mine life is estimated at between three to four years, meaning Kenya could run dry on titanium earnings if the company does not expand its operations in the country where plans to move to new sites have been met with numerous challenges including resistance from communities.

 According to the Kenya Economic Survey 2019, titanium ores and concentrates have gained prominence as a major export commodity since 2014 with domestic exports of the commodity amounting to Sh15.4 billion in 2018.

Efforts by the company to explore minerals in other parts of Kwale have been met with resistance in some part of the region. The most affected is Msambweni area where residents have hampered the company’s exploration programmes.

One of the major concerns by the community is that they fear they will be evicted from their land. This is however not true. First what they need to know is that exploration does not mean we are moving to mine there, it is just drilling a couple of holes to find if there are mineral deposits,” general  manager external affairs Simon Wall told the Star in an interview.

“If minerals are found, we have a comprehensive resettlement and compensation programme for the affected group,” Wall added, affirming the company’s commitment to sustainable livelihood.

The Kwale based miner is also looking for minerals in the Vanga region towards the Kenya-Tanzania border of Lunga Lunga, where it has conducted exploration.

Base acquired a prospecting licence covering 136 square kilometres in Vanga area(PL/2015/0042), , approved by the Mineral Rights Board and issued  in December last year.

Results from Vanga will be out towards the end of the year,” Wall said.

Mining at the South Dune commenced two weeks ago after a  two-week shutdown of the firms operations.

The transition primarily involved the supply and installation of 7,400 meters of slurry and water piping, an 8,500m 11kV power line, a pipe bridge across the Mukurumudzi Dam spillway, a 1.25MW slurry booster pump and a 1MW process water booster pump.

The total cost of works for the transition is about US$12.3million (about Sh1.3bilion) and will be incurred over the 2019 financial year.

The transition went very well, on schedule and on budget. All the infrastructure is working as designed,” Wall noted.

However if the company fails to expand its operations , it will have to close shop in Kenya after four years, putting at least 1,000 jobs at stake.

After that 65 per cent of Kenya’s mineral output value disappears,” Wall said.

Base Titanium alone represents 65 per cent of Kenya’s minerals output value contributing about Sh20 billion annually to the country’s exports of which 55 per cent goes to China.

It has paid close to Sh2 billion in royalties and expect the contribution to GDP to reach Sh100 billion over the life of mine.

The firm has employed 750 people directly and indirect and induced employment created accounts for an estimated 2,800 additional jobs in the supply chain and employee spending.

About 80 per cent of our non-labour inputs come from Kenyan suppliers, equivalent to an injection of Sh4 billion annually into the Kenyan economy.

The firm has so far invested Sh1.7 billion in building social amenities, providing health programmes, promoting commercial agriculture and have to date awarded 2,000 secondary and tertiary scholarships and bursaries.

 Principal Secretary Mining and Petroleum John Omenge has been in Kwale this week to meet NGOs and civil society to address issues being raised by residents.