Base Titanium Ltd., the Kenyan unit of Base Resources Ltd., aims to raise $270 million to develop a heavy mineral-sand deposit south of Mombasa that it expects to start mining by mid-2013, Managing Director Tim Carstens said.
The mining company, based in West Perth, Australia, plans to take on a minority partner, acquire a syndicated loan from international banks and raise equity to finance the project, Carstens said by phone today from Mombasa. The so-called Kwale Mineral Sands Project lies 50 kilometers (30 miles) south of the port city, he said.
“It is the first large-scale international mining project in Kenya and it’s a model for future investments,” he said.
Mining accounted for 0.44 percent of the East African nation’s real gross domestic product in 2009, generating revenue of 6.18 billion shillings ($77 million), according to the Central Bank of Kenya’s website. Commodities produced in Kenya include semi-precious stones, soda ash, gold, and steel products, according to the U.S. Geological Survey.
The volume of mineral production advanced 15 percent in 2008 to 1.55 million metric tons, according to Kenya’s latest economic survey prepared the country’s statistics agency.
The mine’s output of refined minerals is forecast to be about 330,000 metric tons a year of ilmenite, 80,000 tons a year of rutile and 40,000 tons annually of zircon, Carstens said. The minerals are used as pigment in paper, plastics, ceramics, as well as titanium metal and other products. The mine’s projected life span is between 11 and 14 years, he said.
Base Titanium is updating a feasibility study for the project, which the company took over from Tiomin Resources Inc. on July 30. That will enable construction work to start by September, at which time financing arrangements should be in place and purchase agreements signed, he said.
The company is currently negotiating with about five parties to choose one joint-venture partner and is considering a dual listing in London on the Alternative Investment Market, Carstens said.
“The level of interest we are getting from investors and funds is growing,” he said.
Tiomin, which was granted a mining license for Kwale in 2004, halted the project in Kenya because of a delay in moving farmers from the mining site, the Business Daily quoted the company’s president, Robert Jackson, as saying in September 2007.