UK firm gets manganese exploration licence

A manganese mining site.  

Photo credit: File | Nation Media Group

UK mining firm, Marula, has been awarded a Kenyan trading licence for manganese, paving the way for the company to start commercial exploitation of the ore in its recently acquired operation in Samburu County.

The company said in regulatory filings published by the London Stock Exchange that the license is valid until the end of this year, and will be renewed annually.

The sales approval will also allow the firm to enter into offtake deals with overseas manganese buyers, and to purchase the ore from other local miners.

Marula, which focuses on mining battery metals, last month agreed on a deal to buy a 60 per cent stake in a manganese mining operation in Samburu County, from local firm Gems and Industrial Minerals Ltd (GIM) via cash and share swaps worth up to £1.55 million (Sh253 million).

“The granting of the license is considered an important step for the company as it looks to complete its investment in the Larisoro Manganese Mine in Samburu County in Kenya, increase production of high-grade manganese ores and make sales into the export markets,” Marula said in the regulatory filings published on Wednesday.

Marula made an initial payment of £300,000 (Sh48.96 million) to GIM, settled by an allotment of 2.4 million shares in the company after the parties signed a binding terms sheet.

A further £200,000 (Sh32.64 million) was due to GIM in shares or cash on the signing of technical support and commercial agreements, which was slated for end of March. The signing would also trigger an investment of £1.5 million (Sh244.8 million) by Marula for new mining, crushing, screening and processing equipment at the Samburu mine.

A further £300,000 will be payable to GIM on completion of the initial exploration programme and a final payment of £750,000 (Sh122.4m) will be payable on achieving 50,000 tonnes of commercial sales of manganese ore.

Marula also holds an option to raise its stake in the venture to 70 per cent —12 months after signing the technical support and commercial agreements— for a consideration of £1.25 million (Sh204 million), which would raise the entire cost of acquisition and investment to Sh702 million.

In Kenya, manganese deposits are found in Taita Taveta, Kilifi, Samburu, Isiolo and Marsabit (Moyale). However, there has been no large-scale exploitation of the ore, which is used as a steel alloy, black-brown pigment in paint and in dry-cell batteries.

Data from the Observatory of Economic Complexity (OEC), an online data visualisation and distribution platform, shows that in 2022, Kenya exported $18 million (Sh2.4 billion) worth of manganese ore, making it the 14th largest seller of the product globally.

South Africa is the largest exporter globally, shipping $2.96 billion (Sh387.8 billion) worth of manganese ore in 2022.

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