870 Kenyans Face Unemployment and Loss of Billions

Base Titanium, a mine near the Kenyan town of Kwale, is slated to leave the nation next year, displacing approximately 870 people.

Furthermore, the government will lose billions of shillings in annual taxes and royalties.

Base Resources, the company’s parent company based in Australia, argues there are insufficient titanium resources to maintain operations beyond December 2024, effectively ending the country’s most successful mining venture.

The local subsidiary employs 888 individuals as of June 2022, with 98% of them being Kenyans and the bulk hailing from Kwale and Mombasa counties.

In the fiscal year ending June 2022, it paid the Kenyan government $74.9 million in royalties, corporate income tax, staff payroll taxes, and withholding tax on services, among other things.

Suppliers, who collected a total of $66.2 million from their dealings with miners within the same time period, would also suffer financial losses.

“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 have 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,” the managing director added.

Base Titanium began paying taxes and royalties when shipments of the titanium minerals zircon, rutile, and ilmenite commenced in 2014.

The Australian multinational has also benefited financially from the venture, earning billions of shillings in dividends, including $84 million in the fiscal year that ended in June 2023.

While continuing its exploration activities in Kenya and Tanzania, Base Resources will transfer its focus to Madagascar, where it hopes to begin extracting titanium resources.

“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.

Exorbitant expenses, dropping titanium prices on global markets, major land acquisition, and community relocation initiatives, according to the multinational, precluded it from expanding its mining activities in Kwale.

Leave a Reply