Kwale titanium mining firm pays $10 million royalties over four years (Kenya)

By Victor Juma | Business Daily, Kenya October 11, 2017

The Kenyan government has earned a total of Sh1 billion in royalties from Australian mining firm Base Resources which has been exporting- titanium from Kwale since February 2014.

The multinational in an interview said the amount represents the cumulative royalties to June this year, a period in which the value of its exports of titanium ores and concentrates stood at Sh45.5 billion.

Base pays royalties at a rate of 2.5 per cent of the value of its mineral exports. The company exported 1.5 million tonnes of Ilmenite, 269,000 tonnes of rutile, 92,000 tonnes of zircon and 62,000 tonnes of low-grade zircon over the period.

The company plans to apply for an extension or renewal of its current mining licence after discovery of more mineral deposits in the area.

This is a reference to the legal right to mine the area and not a reference to a time period,” Base says of its upcoming licence application.

The company says the type of licence to be given by the government will have an impact on the economics of its activities.

Base says one of its prospecting sites, Kwale south dune, has shown a potential deposit of 114.1 million tonnes which is a 29 per cent increase from previous estimates.

The multinational, which currently mines at the Central Dune, plans to start mining at the South Dune in 2019.

“Further work is required to define which parts of the new Kwale South Dune resource can be mined economically. Once this is done a dialogue will be undertaken with the Ministry of Mining seeking the appropriate land tenure.”

The multinational said its current mining licence expires in 2025 but is renewable.

Base acquired the Kwale venture from Tiomin Resources in 2010. Its current mining operation is contained in a land measuring 177 square kilometres in which it is prospecting for titanium.

Base says its mining activities will continue to be focused on the central dune over the next four years before shifting to the South Dune.

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