About 870 jobs are expected to be lost once Base Titanium, a mine located in the Kenyan town of Kwale, leaves the country next year.
Additionally, the State will lose out on billions of shillings in annual taxes and royalties.
The business's parent company, Base Resources, located in Australia, claims there are insufficient titanium resources to support operations beyond December 2024, therefore ending the country's most successful mining enterprise.
As of June 2022, the local subsidiary employed 888 people, with 98% of them being Kenyans, and the majority being from Kwale and Mombasa counties.
It paid the Kenyan government $74.9 million (Ksh11.3 billion at current currency rates) in royalties, corporate income tax, staff payroll taxes, and withholding tax on services, among other things, in the fiscal year ending June 2022.
Suppliers, who received a total of $66.2 million (Ksh9.9 billion) from their interactions with the miners during the same period, would also lose out.
"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.
When shipments of the titanium minerals zircon, rutile, and ilmenite began in 2014, Base Titanium began to pay taxes and royalties.
The Australian multinational has also benefited financially from the enterprise, earning billions of shillings in dividends, including a distribution of $84 million (Ksh12.6 billion) in the year that ended in June 2023.
According to Base Resources, while continuing its exploratory efforts in Kenya and Tanzania, it will shift its attention to Madagascar, where it is seeking to begin harvesting 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.
The multinational stated that a number of reasons, such as exorbitant costs, declining titanium prices on global markets, significant land acquisition, and community relocation programs, prevented it from expanding its mining operations in Kwale.
Source of the article: Business Insider Africa
