A fluorspar mining site in Elgeyo-Marakwet. PHOTO | JARED NYATAYA
By Kennedy Senelwa, The EastAfrican
In Summary
Kenya's main fluorspar producer’s decision to suspend
operations in April 2016 due to weak commodity prices has sparked fears
of economic hardship in the Kerio Valley.
Kenya Fluorspar Company (KFC) is also facing pressure from
Elgeyo-Marakwet County residents who are demanding that they be involved
in the process of renewing the firm’s mining lease this year.
The private mining firm based in Kerio Valley near Eldoret town in western Kenya has been hit by reduced demand.
Elgeyo-Marakwet County Senator Kipchumba Murkomen
said the company did not involve local residents in making the decision
to suspend fluorspar ore mining and processing operations from April 30
this year.
“We want the Ministry of Mining to ensure Kenya
Fluorspar business operations benefit residents and the country or the
company ships out,” he said. When the mining firm halts operations,
hardship will be felt in the area.
KFC made decision to suspend operations in mid
February due to increased operating costs and continued decline of
global fluorspar prices since 2012.
Fluorspar's traditional benchmark price for freight
on board of $440 per tonne in mid 2012 dropped to an average of $300 to
$280 from 2013 to mid 2015 as global demand softened and to less than
$260 from January 2016.
Local residents are demanding that the mining lease
be surrendered to another investor if KFC suspends operations. The
firm’s 20-year special mining lease for 3,664 hectares from the Kenyan
government commenced in 1997 and it is due for renewal this year.
“We do not want to hear a new mining lease has been
issued to Kenya Fluorspar Company without the participation of local
residents,” said Elgeyo Marakwet Woman Representative Susan Chebet.
The Kenya Fluorspar Company paid $635,000 to the
Ministry of Mining as mining royalties for fluorspar for a period
between July 1, 2013 and December 31, 2014, despite recording net losses
in the two consecutive years.
Managing director Nico Spangenberg said operations
had become unsustainable in the current environment and suspension of
operations in April this year will lead to loss of jobs across all
cadres.
“A collapse in market conditions has led to a dramatic reduction in prices and demand,” Mr Spangenberg said.
China accounts for about 60 per cent of global
output of fluorspar, which is used for making steel, aluminium and
refrigerant gases.
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