The State would lose billions of shillings in annual taxes and royalties as a result of Base Titanium, a mine located in Kwale, leaving next year, along with the loss of roughly 870 jobs.
The largest mining project in the history of the nation is set to cease when Base Resources, the parent company of the business and located in Australia, claims there are insufficient titanium resources to continue operations into December 2024.
As of June 2022, the local subsidiary employed 888 people, with 98 percent of them being from Kenya, primarily from the counties of Kwale and Mombasa.
It made payments to the Kenyan government totalling $74.9 million (Sh11.3 billion at current currency rates) by the end of June 2022.
These payments included withholding tax on services, payroll taxes for employees, royalties, and corporate income tax.
Suppliers that conducted business with the miners and made a total of $66.2 million (Sh9.9 billion) during that time would be among the other stakeholders who lost out.
“Every possibility to prolong Kwale operations’ lifespan has been investigated. We have not been able to find any further mineral deposits of a grade or scale that would allow for a further extension, despite our best efforts and the community’s widespread support,” according to a statement from Base Resources managing director Tim Carstens.
“Kwale operations have served as the cornerstone upon which Base Resources has been built. Although we are sad to be coming to an end with a mining operation in which we take great pride, we see the shift to post-mining as a chance to further solidify our reputation for excellence throughout the entire mining life cycle.”
2014 saw the beginning of shipments of the titanium minerals zircon, rutile, and ilmenite, which led Base Titanium to begin paying royalties and taxes.
The Australian multinational has profited billions of shillings from the enterprise as well, with a payout of $84 million (Sh12.6 billion) in the year ending June 2023 being just one of several dividends generated.
While continuing its exploratory efforts in Kenya and Tanzania, Base Resources says it will shift its attention to Madagascar, where it is aiming to begin harvesting titanium materials.
“As Kwale’s operations draw to a close, the next stage of creating value for shareholders will involve advancing the Toliara Project to a developed stage and realizing its rare earth potential, as well as expanding our exploration efforts in Kenya by pursuing appealing business development opportunities to expand our range of options,” stated Mr Carstens.
The multinational stated that several reasons, such as exorbitant costs, declining titanium prices on global markets, significant land acquisition, and community relocation programs, prevented it from expanding its mining operations in Kwale.