Kenya has finally joined the league of mineral exporting countries after the first shipment of titanium left the Port of Mombasa – destined for China – earlier this month, following nearly two decades of turmoil and false starts surrounding the titanium mining project in Kwale.
The mine’s owner, Australian company Base Resources, says the maiden shipment comprised 25 000 t ilmenite.
The cargo, on the bulk carrier MV African Eagle, left the company’s Likoni marine loading facility in Mombasa on February 16, only days after Kenya’s Ministry of Mining had issued the company with an export permit.
“It has taken us long before exporting titanium minerals to the international market but now we are happy it is happening,” says a government spokesperson.
Base Titanium, a wholly owned subsidiary of Base Resources, exported the first consignment in December last year but disagreements with the Kenya government over royalties and delays in completing the construction of the Likoni marine facility resulted in the delay.
Although the Kenya government has remained tight-lipped about the royalty agreement, it is projected that the East Africa nation will rake in $300-million in taxes and royalty payments over the life of the mine, besides considerable indirect taxes.
An investment agreement signed between government and Base Titanium locks royalties in at 2.5% for five years, after which the rate will be reviewed. This rate is higher than the 1.5% in India and but lower than the 5% in South Africa and Australia.
Base Titanium plans to ship three distinct product streams processed from the Kwale project, in which it has invested over $150-million.
The firm intends to produce 330 000 t/y of ilmenite, 80 000 t/y of rutile and 30 000 t/y of zircon over a 13-year mine life.
The minerals are used as pigment in paper, plastics and ceramics, as well as in titanium metal and other products.
News of the maiden shipment boosted the share price of Base Resources, which jumped 6.1% to A$0.435. Apart from China, Base Resources will also export to Japan, the US, Saudi Arabia, parts of Europe and the Middle East.
The start of exports brings to a close 18 years of controversies ranging from land ownership, compensation and environmental impact assessments to a lack of funds, which have dogged the project since Canadian firm Tiomin Resources discovered titanium at Kwale in the mid-1990s.
Base Resources, which acquired the project from Tiomin in 2010, managed to overcome the obstacles to propel Kenya into the league of mineral producing nations.
The project is expected to enhance Kenya’s mining profile.
Kenya’s minerals sector has the potential to contribute about 10% to the country’s gross domestic product, up from a paltry 1% at present, which equated to $207.5-million last year.