Kenya in Talks With Base, Goldplat on New Ownership Rules
Stock Chart for Base Resources Ltd (BSE)
Kenya’s Natural Resources Ministry said it asked mining companies including Base Resources Ltd. (BSE) and Goldplat Plc (GDP) to submit proposals on how they will comply with local ownership rules introduced this month.
The East African nation on Oct. 12 gazetted a law stating that all mineral rights should be 35 percent owned by Kenyan citizens. The amount of time that companies will be given to comply with the new legislation will be determined on a case-by- case basis, Ali Mohamed, permanent secretary in the ministry, said in a phone interview on Oct. 29.
“We have asked them to prepare a proposal on how they will progressively comply with the new regulations,” he said
Kenya, which has deposits of gold, copper, zinc and coal, is revising its mineral laws as it seeks to boost the industry’s 0.8 percent contribution to the nation’s $32 billion economy. The country also has “significant” deposits of soda ash, fluorspar and titanium, according to the ministry. Other changes to legislation being considered include a three-fold increase in royalty fees to as much as 10 percent, Business Daily, a Nairobi-based newspaper, reported on Sept. 27.
Shares in West Perth, Australia-based Base Resources jumped 14 percent to A$0.25 by the close, after falling 47 percent in the previous two days. The company said Oct. 29 it’s in talks with the government to understand the potential implications for its mineral sands project at Kwale in southeastern Kenya. Mineral sands are a class of ore deposit that includes titanium, tungsten and rare earth elements.
Base Resources Managing Director Tim Carstens didn’t respond to a voice mail left on his mobile phone when called for comment.
Goldplat’s head office number in London didn’t connect to a person who could direct calls.
The revised legislation also reduces the prospecting period to three years from an unlimited time previously with an option for renewal in cases where a company provides proof of “good investment,” Mohamed said, without providing further details.
Investment in Kenya’s natural resources industries lags behind other countries in the region, including Tanzania, Africa’s third-largest gold producer, and Uganda, where Tullow Oil Plc (TLW) expects to start pumping crude by 2016. Tullow, with partner Africa Oil Corp. (AOI), made Kenya’s first oil discovery in March.
Investor interest in Kenya’s mining industry has increased steadily since the beginning of this year and the nation is offering several mining leases including two blocks in the Mui Basin for coal exploration via tender, the Energy Ministry said in June.
The Kenyan Competition Commission formally approved African Barrick Gold Plc (ABG)’s acquisition of Aviva Mining Kenya Ltd. from Aviva Corp. earlier this month. Aviva has a gold project in Kakamega in western Kenya.
Cortec Mining Kenya Ltd., a Nairobi-based exploration company, will start production at its niobium project in southeastern Kenya by 2016, Managing Director David Anderson said Oct 24. Cortec, a unit of Pacific Wildcat Resources Corp., plans to invest as much as $200 million to extend a drilling program at its Mrima Hill prospect, analyze samples and build a mineral-processing test plant within two years.
Red Rock Resources Plc (RRR), a U.K. gold exploration and mining company, expects “large-scale” production to start in Kenya by 2016, Chief Executive Officer Andrew Bell said Oct 12.
Mining companies also will be encouraged to list some of their shares on the Nairobi Securities Exchange (NSEASI) as part of the new law, he said.
“Our economy is expanding rapidly, our capital markets are expanding well and we want to interest the mining sector to come to the capital markets,” he said.
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