Kwale titanium miner set to lay off 1,950 staff

About 1,950 Kenyan land mine workers employed by Base Titanium, an Australian-based firm are set to lose their jobs by June next year amid the exhaustion of commercially viable ores.

This comes after the company which currently conducts mining activities in the coastal region announced that it will be shutting down its Kwale operations as it eyes new minerals export investment in Madagascar by 2027.

This has also been exacerbated by the delay by the national government to issue new licenses to mining companies even after the four-year burn on the issuance of prospecting and mining licenses was lifted in October last year.

The first phase of the layoffs which is set to affect 350 workers will be implemented in January next year while the remaining 1,600 will be concluded in June of the same year.

As indicated in a local daily, the company has set aside $7.7 million (Sh 993.3 million) for the compensation of the staff who will be affected in the process. Aside from job losses, the country will lose big as the Kwale Operation which has been in the country for 11 years now accounts for approximately 65 per cent of Kenya’s mining industry by mineral output value.

Titanium has started the post-mining closure phases and land reclamation plans. The rehabilitation process includes moving and conserving topsoil, levelling the land, adding fertilizer and mulch, planting vegetation and monitoring the flora and fauna. 

In a statement published early this year, the company stated that the move had been fronted by the depletion of mineral ores in the landmines but will still continue exploring new avenues in the country.  “Following an exhaustive exploration and evaluation process seeking to further extend the life of the Company’s Kwale Operations in Kenya, mining is expected to end in December 2024 as per the current mine plan. Processing activities will conclude shortly thereafter,” the company said. 

“After completing the previously announced evaluations of the two remaining near mine prospective areas, the Kwale North Dune Mineral Resource not currently in the mine plan and the Kwale East exploration area, both lack sufficient grade or scale to support the capital investment required to extend or establish new mining operations,”  In April this year, the company entered into an acquisition deal of $375 million (sh 48.37 billion) with an American firm ‘Energy Fuels’ which sought to allow the American company effective control over the mines from September. The company during the agreement had said that the move would not affect the company’s operations including the name, instead, it will be focusing on exploring new mining operations at the coast.

In the meantime, the company’s this year annual report showed that Sales revenue decreased by 50 per cent to $135.1 million(Sh 17.42 billion) compared to $271.4 million( Sh 35.01 billion) in the last financial year.  This was due to lower production and limited sales volumes, with a total of 200,530 tones sold in the period under review compared to 406,023 tones recorded in the same period last year. 

The average price of the product sold remained steady at $674 (Sh 86,946) per tonne compared to $672 (sh 86,688) per tonne.  Total operating costs decreased by 6 per cent to $72.4 million ( Sh 9.33 billion) from $77.0 million (Sh 9.93 billion), due to reduced production and associated product transport costs.