The firm says the project is 71 per cent complete and that it had drawn a further Sh6 billion of the debt available to it.
Australian miner Base Resources has started signing contracts with potential customers of titanium mineral set to be produced from its Sh26 billion mining field in Kwale beginning September this year.
In its latest update report, the firm said the project is 71 per cent complete and that it had drawn a further $72 million (Sh6 billion) of the debt available to it.
This pushed the amount of debt drawn to Sh10.7 billion as the company strives to hit its target of being operational by end of September and to start shipment by end of year.
“With the overall development 71 per cent complete, the Kwale Project continues to be on schedule for production to commence in quarter three 2013 and first bulk shipments to occur in quarter four 2013,” said the company.
“Enquiry levels for Base’s products are strong and discussions are progressing well with customers wishing to enter offtake agreements for the share of Base’s products that are not yet contracted.
“Terms have been agreed with customers for most of the remaining ilmenite production over the first five years with contracts now being prepared,” added the mining company.
Ilmenite is the primary ore of titanium. The report says Base Resources has spent Sh16.3 billion ($192 million) as at end of March in the project that is expected to produce 330,000 tonnes of ilmenite a year, about 10 per cent of the world’s supply.
It will also process another 80,000 tonnes of rutile per year, about 14 per cent of global output, and a further 40,000 tonnes of zircon. Ilemenite, Rutile and Zircon are sand minerals which contain forms of titanium, iron and uranium. The company has already set up road infrastructure connecting it to the port for shipping of the minerals.
Further exploration by the company has, however, been covered with a dark shadow following the government decision in December last year to cancel three of its licenses. The other exploration sites are Kilifi, Mambrui and Vipingo.
Potential revenues from the project justify the creation of a stand-alone ministry of Mining. Najib Balala, a resident of Mombasa, has been nominated to head the docket. Other potential mining discoveries lie in the Mua coal project and gold in Siaya and Kilgoris.
Base Resources got the funds for its exploration from seven lenders —West LB AG, Caterpillar Structured Finance, DEG Deutsche Investitions, The Standard Bank of South Africa, Nedbank Capital, FMO Netherlands, and Proparco.
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