Kwale titanium firm to spend Sh3.3bn on new mining site


An earth mover collects titanium for further production at Base Titanium company in Kwale. FILE PHOTO | NMG

Base Titanium will make a capital expenditure of Sh3.3 billion at a new mining site on its Kwale operation, extending the life of the venture by 13 months to December 2024.

Its Australian-based parent firm said in a trading update that mining at the new site, known as Bumamani, will commence in March next year after land access arrangements are finalised.

The new mining area is expected to yield up to 17.9 million tonnes of titanium ore, out of which the firm expects to get 42,000 tonnes of rutile, 171,000 tonnes of ilmenite and 20,000 tonnes of zircon.

“Proceeding with the Bumamani Project is a significant further step towards extending mine life at Kwale Operations and maintaining operational continuity, providing additional time to develop other opportunities in Kenya and the region,” Perth-based Base Resources said of the local subsidiary's operations.

“Capital cost is estimated at $28.1 million (Sh3.3 billion), including the acquisition of land and the additional mine services and infrastructure that will be required. Capital costs will be funded from internally generated cash flows.”

Base Titanium started mining at the Central Dune –whose minerals were exhausted in 2019— and shifted its operations to the South Dune where it is currently producing the titanium products and where it expects production to continue until May 2024.

The mining firm has also lined up exploration work in more areas in Kwale and Lamu counties, and also has an eye on Tanzania.

The decision to proceed with the additional extraction work on the Bumamani or Northern concession area comes at a time when the company is benefitting from higher titanium prices in the global market.

In the quarter ended March 2022, the company sold the commodity at an average price per tonne of $740 (87,098), up from $478 (Sh56,261) the year before.

This lifted its revenue by 28.3 percent to Sh9.2 billion despite quantities sold declining 17 percent to 107,700 tonnes, which also benefitted the government which earns royalties from the Kwale operation at a rate of five percent of sales.

The company’s parent firm — Base Resources —said earlier that the ongoing Russia-Ukraine conflict is expected to significantly disrupt the supply of Ukrainian mineral sands, further supporting the high prices.

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