Kwale Going into Production 2013 - 50MilWe have a 1.5% royalty on this project (equivalent to 50million plus for VAA. China Jinchaun Group investing:
By Benedict Mwalo
KWALE, Kenya (Reuters) - Australian diversified junior miner, Base Resources Ltd.'s titanium unit in Kenya aims to start mining in 2013, ending years of uncertainty over the project, a company official said on Monday.
Joe Schwarz, the general manager of Base Titanium, said in a telephone interview he expected the ongoing feasibility study at the project to be concluded by early 2011, and an estimated $200 million to be raised next year to kickstart the mine.
The project on Kenya's sweltering Indian Ocean coast has been held up for years by delays including demonstrations by environmental groups, disputes with local farmers over compensation for land and drawn out talks with the government.
Schwarz said so far Base Titanium had yet to sign agreements with buyers of its minerals, but said the exports would likely be destined to China, U.S. and Europe.
"Once we have the green light on the final investment decision, building the plant will take 18-21 months and we would be able to start production in 2013," Schwarz told Reuters.
"There is a lot of interest and discussions on raising finances are progressing well."
Schwarz said the mine should produce between 400,000 to 450,000 tonnes of refined minerals per year, which would bring in about $100 million in annual revenues to east Africa's biggest economy, which lacks a modern mining industry.
The country's mining laws date back to the 1940s, but Schwarz said the government was keen to modernise its laws, pointing to a new bill aimed at improving the sector.
Once completed, this will be the first large scale mining project in Kenya, and this will be a beacon for attracting others into the sector," Schwarz said.
LIFESTYLE PRODUCTS
The mine would have a processing plant to recover ilmenite, rutile and zircon from the mineral sand to be used to make paint, ceramic, tiles, glazing among other uses.
"The minerals are used for making lifestyle products for consumers with a high per capita income," Schwarz said.
Titanium is an important pigment for industrial, domestic and artistic applications. Titanium is a choice material for joint replacement and tooth implants, and body piercing.
Base Resources, which also mines iron ore in Australia, was formerly Base Iron Ltd. The company paid $3 million and a cash royalty to Tiomin Resources Inc in February this year for the Kwale mineral sands project.
The deal, which included the sale of intellectual property related to mineral sands projects in Africa, gave the Australian miner the project located south of Kenya's Mombasa port.
Last year, China's Jinchuan Group Ltd terminated an agreement under which the top Chinese nickel producer was to acquire 70 percent stake in the project.
The development of the project would end more than 10 years of waiting for the plant to take off.