I am writing this article from Swahili Beach in Diani which frankly is as good a place as any to be holed up in, catching the sea breeze and watching the incoming waves lapping the sandy shore. Earlier I had attended the Base Titanium End of Year Party where near enough a thousand Employees and their Families participated dressed in their "maridadi" finest. One Gentleman came up to me and said "I am not an Employee, I am one of the Family’’ which speaks to the self-evident fact that there has been no more successful extractive Company in this East African region than Base under the leadership of its CEO the indefatigable Tim Carstens.
Base has been an economic stimulus program all of its own in this part of the World, which I know well. it’s been a Trailblazer for Kenya inc. placed us on the Map, built c21st infrastructure at the mine and the Port and conducted its affairs in a way that any extractive Company seeking to venture into Africa would be well advised to study. Base recently received an extension to its mining lease but the reality is that the mine will soon have crossed its apogee and we need to start thinking about how we parlay this Aus~Ken success story into something much bigger. We should be knocking on doors saying "look and now come".
The extractive Industry has had a chequered history in Africa. The most egregious example is the DR Congo where I appreciate the enigmatic Joseph Kabila is now exiting stage left [or is he?]. For a man who has been typically reticent and prone to speak in the odd syllable like a Delphic Oracle, he has become remarkably voluble as of last week giving interviews left right and center and even referencing Arnold Schwarzenegger’s famous ‘’I’ll be back’’. However, the Kabila, Gertler, Glencore axis largely purloined the benefits for themselves and a day of reckoning has finally arrived for Glencore at least.
South of us, Acacia Mining has been slapped with a $190b fine by the Cashew Nut King President John Pombe Magufuli. $190b is an absurd figure by any measure and essentially the entire industry is uninvestable. There is no Board anywhere who would countenance an investment in this industry in Tanzania for the foreseeable future. They are out of the Game. When you look at risk, You look at the regulatory environment. The regulatory environment in Tanzania is a one man show. Acacia is trapped, others will not be prepared to place themselves in the line of Magufuli’s fire.
To the West, Uganda in between hunting down Bobi Wine for sport, the extraction of the Oil in Lake Albert seems to have lost all momentum. Maybe, President Museveni expects to live until he is a 100 and hence he is prepared to play the long game because it’s become an interminably long game now.
It has been oftentimes been said by Israel [rather unfairly] that the Palestinians never miss an opportunity to miss an opportunity.
Kenya must not let this opportunity go begging. We need to use the indisputable success of Base Titanium in Kwale to crowd Investors in. We need to consider whether our Capital markets are fit for purpose: the extractive Industry and it’s capital markets component is highly specialized. The Canadians, South African Banks Australia and the London Stock Exchange have carved out specialized niches.
We need to carpe the diem and carve out our niche, the door is wide open but it will not be forever.