Base Resources to Protect Kenya Mining Rights After Cancelation

Base Resources Ltd. (BSE) plans to protect its Kenyan mining rights after the nation revoked three licenses the company controls for failing to meet reporting conditions.

“We will be taking action to protect our rights,” Tim Carstens, managing director of the Perth, Australia-based company, said today in reply to e-mailed queries. “We can see no legal basis” for a government notice canceling the rights.

Kenya revoked the Vipingo, Mamuburi and Sokoke licenses covering a total area of 450.7 square kilometers (111,370 acres) in the eastern Kilifi region because of “non-performance,” the government said in a gazette notice dated Dec. 24. The licenses were due to expire from September 2013 to March 2014, according to a copy of the gazette e-mailed by the company.

Base Resources gained the operating rights to the licenses and an option to buy them when it purchased Tiomin Kenya Ltd. assets in 2010. The Kenyan action won’t affect development of the Kwale mineral sands project also acquired through the deal that’s due to start output in the second-half, Carstens said.

Kenya, with deposits of gold, copper, zinc, coal, soda ash, fluorspar and titanium, is revising laws to increase the mineral industry’s 0.8 percent contribution to the $32 billion economy and expand control over the country’s natural resources. Mineral rights should be 35 percent owned by Kenyans under the changes.

Base Resources agreed an exclusion from the ownership rule with the government for Kwale, about 50 kilometers south of the port of Mombasa, Executive Director Colin Bwye said in November.

Environment and Natural Resources Minister Chirau Ali Mwakwere didn’t pick up two calls to his mobile phone today.

To contact the reporter on this story: Sarah McGregor in Nairobi at smcgregor5@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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