Licence freeze stalls Kwale titanium miner expansion

A titanium mining site in Kwale County. PHOTO | KEVIN ODIT

By PATRICK ALUSHULA
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Summary

• The government’s blanket freeze on the issuance of new prospecting licences to miners has stalled expansion activities for Kwale titanium miner Base Resources.
• The Australian-based firm, with mining activities in Kenya and Madagascar, says the freeze has seen its applications for an expanded area for mineral exploration at the Kenyan coast take longer-than-expected to be approved.

The government’s blanket freeze on the issuance of new prospecting licences to miners has stalled expansion activities for Kwale titanium miner Base Resources.

The Australian-based firm, with mining activities in Kenya and Madagascar, says the freeze has seen its applications for an expanded area for mineral exploration at the Kenyan coast take longer-than-expected to be approved.

“A government moratorium placed on the issuance of prospecting licences in November 2019 has affected the progress of all licence applications, albeit assessment of applications has recently recommenced, which is seen as a precursor to the lifting of the moratorium,” says the firm in a trading update.

The delays look set to delay exploration and scale-up of mining activities in Kenya which hosts Base Resources’ major operational mine.

Kenya has been gearing up for an audit of the licences of mining companies to establish how they were issued and whether the country is getting value from these resources.

Base Resources says in the quarter ended September, it lodged two additional licence applications in the Kuranze area and is awaiting regulatory approval. The fresh applications add to other filings that were lodged for an area south of Lamu and another one in the Kuranze region of Kwale County — about 70 kilometres west of Kwale operations.

Base Resources is keen to expand beyond Kwale to increase its revenue from the Kenyan market at a time its activities in Toliara, Madagascar remain suspended pending agreement of fiscal terms with the government.

Expenditure on exploration activities in Kenya during the quarter was Sh21.7 million ($0.2 million) compared with Toliara’s Sh380.6 million ($3.5 million).

Base Resources discussions with Petroleum and Mining ministry to update the additional mineral resources that fall outside the current mining lease have also been slow.

“Progress remains slow as the government focuses on combating the Covid-19 pandemic,” says the firm.

Completion of the remaining drilling programme in Kwale East and the northern sections of the Vanga Prospecting License remain pending due to lack of resolution of community access issues.

The firm had also applied for an extension to the Vanga prospecting licence to cover more ground.