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Kenya closer to opening Sh270bn rare metal mine

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Drilling at the site of the proposed niobium mine at the Coast has been going on to obtain more samples for analysis. A court case challenging the project has been withdrawn.  FILE

Drilling at the site of the proposed niobium mine at the Coast has been going on to obtain more samples for analysis. A court case challenging the project has been withdrawn. FILE 

By GITHUA KIHARA and MOSES MICHIRA

Posted  Thursday, September 15   2011 at  20:06

In Summary

A chronic global shortage of rare earths has triggered a spike in mining projects for them in recent years.

China, which accounts for an estimated 97 percent of global rare earth supplies, has been tightening trade in the strategic metals, sparking an explosion in prices.

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A court petition seeking to stop exploitation of multi-billion dollar mineral deposits at the Coast has been withdrawn, paving the way for full exploration of a site believed to have the potential to earn the country Sh270 billion ($3 billion).

Petitioners in the suit filed by the Kaya Mrima Community Group have withdrawn the dispute according to court documents seen by the Business Daily, allowing Cortec Mining to prospect for the pricey niobium and rare earth oxide (REO) minerals.

Moses Masibo, the acting commissioner for mines said Cortec would continue exploration of the minerals in the area, as its parent company, Pacific Wildcat, issued a statement informing investors of the area’s ‘significant potential.’

Cortec is nearing conclusion of the exploration stage, before engaging environmental authorities who will assess possible degradation of the area as a result of the pending exploitation before it is allowed to apply for a mining lease.

The withdrawal takes Kenya closer towards commercial exploitation of the REO minerals, especially Niobium, which is said to be selling at about Sh4,400 ($46) per kilogram in international markets.

Officials at Cortec Mining have placed initial estimates of the Niobium deposits in Kwale in excess of Sh250 billion ($3 billion), expected to be exploited over the next two decades pending regulatory approval.

David Anderson, the managing director said that firm will apply for a mining lease once the environmental impact assessment covering the area was completed to allow for the commencement of commercial exploitation of rare minerals.

“Cortec will apply for a mining lease before the end of this year when the ongoing environmental impact assessment is complete” said Mr Anderson, adding “At the present market prices, the deposits are worth about $3 billion.”

In the notice to investors, Pacific Wildcat reported that Niobium and the other rare minerals occurred consistently over the covered ground and existed deeper than 30 metres below the surface, alluding to the fact that the deposits were substantial.

“These first diamond results confirm the significant depth potential to the Mrima Hill deposit. As can be seen from the cross sections we have now proved the high grade Niobium mineralisation extends at depths substantially deeper than the initial Inferred Niobium resource which is limited to a depth of 30 metres,” said Darren Townsend, the company’s president in a statement.

“The drilling also indicates the Rare Earth Oxides (ROE) mineralisation extends to significant depths, supporting the potential for a considerable REO resource,” added the statement dated September 13.

Mr Masibo said Niobium is a high specialty mineral used in strengthening steel in the application of spacecraft parts, whose use as a consequence of new technological innovations has surged globally.

Niobium toughened steel is also used in the manufacture water and sewerage pipes due to its resistance to corrosion, while REO are used in the making nuclear batteries and semi-conductors in household electronics.

Issuance of a mining lease to the firm is expected to lift the country’s profile as a mineral producer, after the State said it had plans of approving the exploitation of Gold to UK firm Goldplatt by October.

The approval is however awaiting the expiry a 90-day window period from the time an application is received to allow the general public and other stakeholders to interrogate the mining firm.

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