Market News

Kwale miner to pay double in royalties starting January 1

Titanium mining in Kwale. FILE PHOTO | NMG
Titanium mining in Kwale. FILE PHOTO | NMG 

Kwale-based Base Titanium will from January double the royalties paid from the current 2.5 per cent to five per cent effective January 1.

Mining principal secretary Ibrahim Mohamed said the move, which stems from longstanding talks between the ministry and the miner, will boost Kenya’s earnings from mining.

“The increase will come into effect from January next year,” Dr Mohammed said at the mining conference held in Nairobi this week.

Resource experts have in the past called for a review of the royalties to ensure Kenya gets the right value for its resources.

The Kwale Mineral Sands Project is the single largest mining project undertaken in Kenya since independence with a capital investment of Sh26 billion.

Base Titanium general manager for external affairs and development Joe Schwarz, had earlier said the miner agreed in principle with the ministry to increase the royalties.

“We will be paying royalties at five per cent as soon as we are able to conclude the agreement and wrap that to the mining lease,” said he early this year.

The company had by July this year paid royalties to the government to the tune of Sh1 billion. In the last financial year, it paid Sh400 million.

At full capacity, the miner expects to produce 330,000 tonnes of ilmenite, 80,000 tonnes of rutile and 25,000 tonnes of zircon, constituent minerals of titanium, annually.