The Kenya Flourspar Mining Company in Kerio Valley will shut down its operations tomorrow causing massive unemployment. More than 2,000 directly-employed workers are set to lose jobs along with another 1,000 casuals. Many of the workers were issued with termination notices two months ago.
Top officials of the company led by managing director Nico Spangenberg were yesterday locked up in meetings at the company which had issued the closure notice three months ago. Company officials said Kenya Flourspar Company will proceed with the closure plans.
Area community spokesman Micah Eigen said they had been informed the company will shut down as scheduled. “We also have reports that the government is sending CS for mining to the company this week to meet with its officials,” Eigen told the Star. Senator for Elgeyo Marakwet Kipchumba Murkomen confirmed requesting CS Dan Kazungu to visit the area and intervene in the situation.
The firm had said it will suspend operations in the region because of shrinking revenue due to the fall in global demand and competition from new producers which has suppressed fluorspar prices by more than 52 per cent in four years. “Market conditions including prices have drastically changed for the worst in the last few months and the company operations are now unsustainable in the situation hence the painful decision we took to shut down,” said Spangenberg.
New producers of Fluorspar have caused a drop in the mineral’s prices globally with an extra 200,000 tonnes of the commodity flooding the markets.
According to the firm, Fluorspar mined at Kerio Valley has high concentration of phospourite impurities making it have low demand in the global markets.
“We have made heavy losses in the last three years and we cannot continue that way,” Spangenberg said. The company is also overwhelmed by heavy operational costs including an average of Sh20 million monthly for electricity.
The company has more than 150 transporters who have been using lorries to ferry the mineral from Kimwarer to Flax market for onward transportation by rail to Mombasa for shipping.
In 2009 the company faced similar challenges and was forced to shut down temporarily but it later resumed operations and even made profits. However, this time round, Spangenberg said he is not sure if it will be possible to resume operations in the region.