Mining report: Kenya Vision 2030 opens mining opportunities
While new to advanced mining, Kenya is already exhibiting an array of interesting operations.
Among the emerging mining countries of Africa, Kenya is a relative newcomer. Its neighbour, Tanzania, for example, has overshadowed the country in its highly successful drive to become one of Africa’s key gold producers.
Until recently, mining did not occupy a key position in the Kenyan economy. Kenya’s former Cabinet Secretary Ministry of Mining, Dan Kazungu, explained that the mining ministry was formed in 2013 as part of President Uhuru Kenyatta’s Vision 2030. This initiative identified several pillars around which Kenya could build up its overall economic strength.
Base Titanium Communications and Investor Relations Manager, James Fuller, called the Vision a statement of support and partnership.
‘It also demonstrates to future investors that the government is supportive of mining investment and sees the impacts it can have more broadly across the economy,’ he said.
‘Being awarded Kenya Vision 2030 flagship status is recognition by the government of the role Base Titanium’s Kwale project is playing in advancing and developing the country’s mining sector.’
Mining was just one pillar in the President’s plan, despite it having previously been sidelined in favour of tourism, agriculture and several other sectors. Double-digit growth mining was to be a key contributor to a diversified economy, which generated wealth creation and employment opportunities. In addition, inclusivity that incorporates artisanal and small-scale miners has always been crucial.
In more technical terms, private companies such as Base Titanium carry out geological surveys that share data with the ministry, this being an encouraged practice. Kenya has also attempted a nationwide airborne geophysical mapping survey in order to identify new potential areas for mineral discovery.
Kenya’s titanium base
The Kenyan mining sector accounts for under 1% of GDP. However, Base Titanium accounts for 65% of Kenya’s mineral output value. The company is the largest exporter in tonnes through the Port of Mombasa, and is Kenya’s largest trading partner with China.
Under Kenya Vision 2030, Base Titanium has been formally accredited as its flagship mining project. The company is 100% owned by ASX and AIM:BSE listed Base Resources Limited, and is located in Kwale County, 50km south of Mombasa and 8km inland from the Indian Ocean. It constituted Kenya’s first major foreign direct investment in Kenyan mining.
Construction at the Kwale project was completed at the end of 2013 and the first bulk shipment of ilmenite departed from Mombasa in February 2014. Last year, the mine produced 400,000 tonnes (t) of ilmenite, 92,000t – 14% of the world’s rutile output – and 32,000t of zircon. Major revenue accrues at national and county level as well as the direct and indirect benefits.
Base Titanium creates significant employment opportunities whether by direct employment or by procuring local goods and services. The company also enables community livelihood enhancement and social infrastructure programmes.
In physical terms, the project comprises the north, central and southern dunes, which contain economically viable concentrations of heavy minerals, separated by the Mukurumudzi River. The Kwale deposits are hosted by the Magarini Sands of Aeolian origin and deposited as coastal dunes after intense erosion. They are poorly stratified deposits forming a belt of low hills running parallel to the coast. The deposits also contain a clay and silt fraction of 25-30%.
A stratigraphic portrait shows brown sand at the surface, followed by orange or reddish sand that becomes more beige and pink at depth. The base of the deposit is weathered Mazeras sandstone.
Estimates of total mineral resources as of June 2019 were at 285 million tonnes (Mt) at an average heavy mineral (HM) grade of 2.1% for 6.0Mt of contained HM at 1% cut-off grade. This estimate has increased over 2018, by 112% for material tonnes and by 43% for contained HM tonnes, as the north dune was added to the figures while mining of the central zone has been fully depleted. South and north dune mineral resources remain unchanged.
The Kwale project comprises several major operational and ancillary components, namely:
- Hydraulic mining unit (HMUs)
- Wet concentrator plant (WCP)
- Slimes and tailings disposal
- A mineral separation plant (MSP)
- Product storage and shipping
- Power supply via a 14km, 132kV transmission line
- and substation, and
- A process water supply from a storage dam on the Mukurumudzi River, and more groundwater sources.
Using three HMUs, mined ore is fed by a slurry pipeline to the WCP where the barren slimes and sand are removed in order to produce a heavy mineral concentrate (HMC). The HMC is delivered to the MSP for separation into the ilmenite, rutile and zircon. The products are road-hauled to the dedicated Likoni port facility where ilmenite and some rutile are stored for bulk loading onto vessels. Zircon and the balance of the rutile are containerised and exported through the Port of Mombasa container terminal.
The Kwale project was originally designed to treat the high-grade central dune ore at 1,600t/h, but Base Titanium is countering declining ore grades from mid-2018 by increasing mining rates to the MSP. In turn, the original dozer method has been replaced by hydraulic mining. An upgrade of water supply to achieve mining at 2,400t/h from three HMUs handling 800t/h each was implemented. Capital cost for the latter was $12mln.
On the matter of artisanal operators, Fuller confirmed that this is not an issue, because ‘mineral sands are a high-volume, low-value mineral which is not conducive to small-scale or artisanal mining’.
Distribution and markets
Base Titanium has established a dedicated bulk storage and shipping terminal at Likoni, approximately 50km north of the mine. Ilmenite and rutile products are road-hauled in 30t road trucks and discharged in the 80,000t capacity storage shed at Likoni.
A mobile ship loader using conventional conveyor technology loads at a rate of 800t/h into bulk carrier vessels moored alongside the wharf.
In the case of individual minerals, ilmenite and rutile contain varying levels of titanium dioxide, with rutile having a higher percentage, and therefore being more valuable. Titanium dioxide is primarily an ingredient to produce pigment, which is then used in paints, plastics and papers. This dioxide is also used to make the metal titanium, which has extensive uses in the aerospace and medical industries. Zircon is a separate product that is primarily used as an opacifier in ceramics as well as in foundries.
Social and fiscal factors
‘Base Titanium invested US$3.8mln in community and environment programmes in the 2018-2019 financial year alone,’ Fuller said, speaking of Base Titanium’s commitment to corporate social responsibility. ‘The company understands that achieving its long-term goals is reliant on building beneficial relationships with the communities in which it operates and establishing a balanced flow of mutual benefit.’
As far as financial obligations are concerned, he said Kenya’s royalty and tax regime is similar to many other mining jurisdictions. ‘A royalty is applied onto the value of the minerals – that is, the revenue generated. This means it is a cost of business and not dependent on profit levels. In addition, all other business taxes apply – corporate tax, VAT, duty, withholding etc.’
Many people are aware of Fairtrade, the organisation that campaigns for products that respect the financial and environmental needs of the people manufacturing products along the supply chain. Less well known is the drive to see minerals extracted under conditions as sympathetic as possible to the miners involved. Hostile conditions can include unsafe workplace equipment, exposure to toxic substances and inadequate pay.
Gold-rich deposits around Lake Victoria in East Africa may well have generated some income but it is all too often low income, while inefficiency and toxic mercury use have restricted production potential and are linked to long-term neural damage of workers.
Therefore, the key to Fairtrade mining comprises initiatives to mine gold responsibly. One such project is East Africa’s Lake Victoria Gold programme (LVGP). Shared among Kenya, Uganda and Tanzania, it has several ambitions:
- To make artisanal gold mining around Lake Victoria cleaner, safer and equitable
- To develop a sustainable model and new techniques for the gold mining communities around Lake Victoria, including artisanal production and,
- To reduce mercury rates by up to 90%.
The LVGP provides centralised processing centres that can reduce mercury use by up to 90%. Through a hub approach that initially serves two or three mines, the benefits of investment can then be reaped by several mines, rather than only one at a time. Optimising mining equipment use means impacts can be doubled, and at the initial investment sum.
LVGP incorporates many other aspects. It supports businesses, donors, impact investors and development agencies as they build mining communities and combat environmental degradation, child labour and gender inequality. Governments can also transform artisanal or small mines into commercially viable entities.
‘All Fairtrade certified gold currently comes from Peru. There has been one recent example of a mine site achieving certification in Kenya (MICODEPRO), however, its difficulty in accessing international markets as well as some operational challenges in the mine – connected to cashflow and technical issues with tunneling – meant it voluntarily decertified last year,’ Fairtrade Senior Responsible Minerals Manager, David Finlay, told Materials World.
‘Therefore, we are focused on delivering impact through an approach which incentivises incremental improvements in mine performance with an end goal, rather than entry point, of Fairtrade certification. This work is delivered by a new and independent entity called the Impact Facility, which has been formed as a result of grant-funding we have managed. This entity is managed by a third party and is focused on opening access to finance, technical support and markets.
‘In concrete terms, mines we are currently working with are being supported to access technical training relating to responsible production and formalisation, as well as being offered access to low-interest finance, in order to invest in cleaner, more efficient mining technology – increasing recovery rates of gold as well as reducing reliance on mercury.’
Finlay also looked at the downstream aspects of Fairtrade’s involvement, and mentioned that the company’s supporting of such mine sites has transitioned from what he termed ‘buying gold from site X’ to ‘investing in site X’, with a possible view to buying from the sites in the future. Fairtrade is especially reaching out to impact investors to scale its work in line with this approach.
It seems that while Kenya was indeed late to join other African countries in the establishment of a robust mining industry, pushing for new business models like that of Fairtrade production and the broader aspirations of Vision 2030 are showing national commitment to help build the impetus required to catch up.