•The firm is however hoping to continue with exploration activities in Kenya, with about eight licenses awaiting approval by CS Hassan Joho-led mining ministry.
•Four of the lecenses are currently undergoing public participation with the firm keen to invest in prospecting for minerals in Kwale-Taita Taveta border, Tana River and Lamu.
Image: SHABAN OMAR
Base Titanium has started laying off staff ahead of the December deadline for closure of operations in Kwale county, even as it remains hopeful of continued exploration in Kenya.
The Australian mining company will spend $7.7 million (Sh995.2 million) in the process, general manager External Affairs, Simon Wall, confirmed on Tuesday.
It had 1,746 employees and individual contractors on its books, as of June 2023.
“We have started the process which will be completed by end of the year as operations move towards closure. We will remain with a few staff for the post-mining activities which could go until next year with another three years monitoring process,” Wall told the Star in an interview.
The firm is however hoping to continue with exploration activities in Kenya, with about eight licenses awaiting approval by CS Hassan Joho-led mining ministry.
Four of the licenses are currently undergoing public participation with the firm keen to invest in prospecting for minerals in Kwale-Taita Taveta border, Tana River and Lamu.
“We are hopeful the process will be smooth and Base is ready to address any issues raised by the community,” Wall said.
So far, Base’s plans to explore and possible future investments in Lamu and Tana River have been met with opposition from a conservation organisation.
Ulinzi Africa Foundation, a regional entity with a special focus on the Tana Delta, says Base’s activities will negatively impact the ecosystems and biodiversity.
“The proposed mining prospecting blocks PL/2019/0263 and PL/2019/0266 directly impact our organisation’s operational area negatively. We object to the issuance of these licenses,” the Non-Governmental Organisation said.
Kenya is also in urgent need of an updated Strategic Environmental Assessments (SEA) to provide best practice governance of extractive activities, it said, in order to minimise impact.
The country has also not adopted the Extractive series Transparency Initiative (EITI) standard.
According to the NGO, an examination of several cases indicates that heavy mineral sands extraction has caused intense harm to unique ecosystems, drastic ecological disruption and increased vulnerability of the communities.
Wall however affirmed that the company remains compliant to the country’s mining laws.
“Base respects the licence application process and believes the opportunity for the public to participate is an important step. We look forward to working with the ministry to address any issues raised by the public in relation to Base prospecting license applications,” Wall said.
Meanwhile, royalties to the government in the financial year ended June 2024 dipped by about 54 per cent to $6.77 million (Sh872.5 million), as mineral sales dropped by 50 per cent.
This is on the back of reduced production and sales which have come with mineral exhaustion at the licensed Kwale mining sites, with operations set to end in December this year.
The spending on royalties was down from $14.6 million (Sh1.9 billion) paid in a similar period last year.
During the period under review, sales revenue decreased 50 per cent to $135.1 million (Sh17.4 billion) compared to $271.4 million (Sh34.9 billion) the previous financial year, as lower production limited sales volumes, with a total of 200,530 tonnes sold in the reporting period. This is compared to 406,023 tonnes in the year to June 2023.
“Softening product markets resulted in reductions in average achieved prices of four per cent for rutile, nine per cent for ilmenite and 14 per cent for zircon compared to the prior year,” parent company Base Resources said on Monday.
The company reported a $12 million (Sh1.5 billion) net profit for the period, down from $17.9 million (Sh2.3 billion) the previous year.
In the year to June, the Kwale project paid $9.8 million (Sh1.3 billion) as income tax to the Kenyan government.
Base whose capital expenditure on its project to date is to the tune of $370 million (Sh47.6 billion-current exchange rate) entered Kenya’s mineral sector in 2010, with operations in Kwale commencing in 2013.
The first shipment of minerals from its Mombasa port facility was made in February 2014.