Kenya titanium miner exit risks 870 jobs

The exit of Kenya's Kwale-based miner Base Titanium next year will result in the loss of about 870 jobs while the State will forgo billions of shillings in taxes and royalties per annum.

The company’s Australia-based parent firm Base Resources says there are not enough titanium resources to sustain the operations beyond December 2024, bringing to an end the most successful mining venture in the country’s history.

The local subsidiary had 888 employees as of June 2022 and 98 percent of them were Kenyan, most of them drawn from Kwale and Mombasa counties.

It paid $74.9 million (Ksh11.3 billion at current exchange rates) to the Kenyan government in the year ended June 2022, comprising royalties, corporate income tax, staff payroll taxes and withholding tax on services among others.

Other stakeholders that will lose out include suppliers who earned total revenues of $66.2 million (Ksh9.9 billion) from their dealings with the miners in the same period.

“We have explored all avenues for further extending the life of Kwale operations. However, despite these efforts and broad support from the local community, we have been unsuccessful in identifying additional mineral deposits of sufficient grade or scale to support a further extension,” said Base Resources managing director Tim Carstens in a statement.

“Kwale operations has been the foundation on which we have built Base Resources, and while it will be sad to reach the end of a mining operation in which we have such pride, we see the transition to post-mining as an opportunity to further cement our reputation for excellence in the full life cycle of mining.”

Base Titanium started paying royalties and taxes in 2014 when shipment of the titanium minerals ilmenite, rutile and zircon started.

The venture has also been profitable for the Australian multinational, which has earned billions of shillings in dividends, including an $84 million (Ksh12.6 billion) payout in the year ended June 2023.

Base Resources says it will turn its focus to Madagascar where it is working to start mining titanium minerals while maintaining exploration activities in Kenya and Tanzania.

"With Kwale operations now coming to an end, the next phase of shareholder value creation will come from the progression of the world-class Toliara Project to development and realizing its rare earth potential, accelerating our wider Kenyan exploration efforts with the recent lifting of the licensing moratorium and pursuing attractive business development opportunities to broaden our option set,” said Mr. Carstens.

The multinational noted that it could not expand the mining activities in Kwale due to several factors including prohibitive costs, weaker prices of titanium in the international markets as well as substantial land acquisition and community resettlement programme.