Canadian firm slashes size of mining area for rare metal
Posted Sunday, March 24 2013 at 17:49
Canadian firm Pacific Wildcat Resources (PAW) has cut the size of the area where it is mining for niobium in Kwale County after reviewing its special licence.
In a Kenya Gazette notice dated March 7, commissioner of mines and geology Moses Masibo issued a fresh licence to the firm that has cut its prospecting area to about 351.1 acres.
“The (government) re-grants Cortec Mining Kenya Limited (PAW’s local subsidiary) a special mining licence to undertake prospecting and mining operations in Mrima Hill area, Kwale County,” reads part of the gazette notice.
The new licence has split the 351.1 acre piece of land into 47 specific spots in which the firm will carry out its prospecting and mining activities.
Section 17 of the Mining Act under which the fresh licence was issued also signals that the government reviewed other conditions including its period, labour, rents, royalties, and fees.
The new licence comes after the Canadian firm on Tuesday said it will raise $1.5 (127.5 million) in a private placement for mining in its Kenyan operation.
“The proceeds will be used to fund additional resource definition work ... at the Mrima Hill Project,” PAW said in a statement.
The company has a 70 per cent stake in Cortec Mining Kenya Limited whose niobium mining will see it supply mainly manufacturers of high-grade structural steel and superalloys that form the main consumer of the rare metal.
Cortec’s managing director David Anderson told Bloomberg that the company will start production of niobium in 2016. Output once at full capacity is expected to reach 2,900 metric tonnes to 3,600 tonnes of niobium concentrate a year, he said.
The deposit is estimated to hold the world’s sixth-largest reserve of the rare metal and it has an initial mine-life of 16 to 18 years, Anderson said.
Rare earths are vital in manufacturing high-tech electronics products such as specialised miniature nuclear batteries, laser repeaters, super conductors and miniature magnets. Niobium is used in high- temperature alloys for jet engines and to strengthen steel for cars, buildings and oil pipelines.
China, which accounts for an estimated 97 per cent of global rare earth supplies, has been tightening trade, sparking a jump in prices. Japan has been hard-hit by the scarcity and has been looking for other supply sources.