Mining firm Base Resources is seeking an extension of its titanium mining licence in Kwale after discovery of more mineral deposits in the area.
The Australian multinational currently has the right to mine titanium until 2025.
The company says one of its prospecting sites, Kwale South Dune, has shown a potential deposit of 114.1 million tonnes, which is a 29 per cent increase from previous estimates.
Base, which mines at the Central Dune, plans to extend operations to South Dune in 2019. The larger mineral deposit discovery has prompted the company to seek an extension of the licence.
“Work to determine an indicative economic pit shell for the updated 2017 Kwale South Dune Mineral Resource estimate will be undertaken in the coming months, which will then form the basis for the application to the Kenyan Ministry of Mines for an extension of mining tenure,” Base said in a regulatory filing.
“This tenure will, preferably, take the form of an extension to the existing special mining license 23 or, alternatively, could involve the granting of a new mining licence.”
The company said the type of licence to be given will have an impact on the economics of its activities.
The renewal option provides the right to carry out mining operations for the production of titanium minerals ilmenite, rutile and zircon and will maintain existing terms, the multinational said.
Base, which currently pays royalties to the government at 2.5 per cent, recently sought to halve the rate to recover VAT refund of more than Sh1 billion.
A new licence could expand the mining operation to the new site.
Both areas with large titanium deposits fall within the exploration licence covering 177 square kilometres.
Base started exporting titanium ores and concentrates in 2014 when it shipped Sh7.2 billion worth of the commodity.
Exports rose 17 per cent to Sh11 billion last year from Sh9.4 billion in 2015.
The firm acquired the Kwale venture from Tiomin Resources in 2010. Base says completion of an updated ore reserve for the South Dune deposit will be subject to finalisation of mining tenure arrangements with the government.