Kenyan business community urged to get involved in mining industry
Australia-based mining company Base Resources Limited could list on the Nairobi Securities Exchange (NSE). The firm, which is already trading on the Australian Securities Exchange, is mulling over the listing that will give Kenyans an opportunity to invest in the business.
Base Resources, through its Kenyan subsidiary Base Titanium, is developing the US$260 million Kwale Mineral Sands project on the Kenyan coast.
Tim Carstens, managing director of Base Resources, said that although earlier efforts to bring local investment funds on board were unfruitful, interest in the company has soared lately.
“We have always wanted to get Kenyans involved in the project. We spoke to people in the early days when we were looking for investors, but we couldn’t find anyone who had sufficient comfort with mining to take that step,” said Carstens.
“Recently we have started getting local people asking how they can invest. The practical way is to list the Australian company at the NSE. It is a very challenging thing having multiple listings in different jurisdictions. We are looking at whether it is feasible or not,” he explained.
The project will extract ilmenite and rutile, which are processed into titanium dioxide and used in pigments for paints and plastics, and zircon, which is used in ceramics. The Kwale project is expected to add 0.6% to Kenya’s annual GDP and overtake coffee as the fourth biggest foreign exchange earner.
Carstens would like to see the investment community in Kenya more involved in mining projects in the country.
“The investment community in Kenya and the banking community should have a better understanding of mining and be more prepared to invest so that when the next set of projects come through, Kenya will be at a better position to participate and benefit from the investment returns, not just as passive providers of the land,” said Carstens.
The Kwale project is now seven months into physical development. According to Carstens, each of the main components of the project is in construction and should be handed over to the operations team in August of 2012.
“We should see our first shipment of products in the fourth quarter of 2013,” said Carstens.
In the next five years the firm plans to have most of its operations run by locals as it reduces expatriates.
“The expatriates are on fixed term contracts and one of their accountabilities is to train someone to replace them. In about five years of operations we will reduce the number of expatriates to about five and the rest of the team will be Kenyan,” he said.
Currently 170 people work on the Kwale project, but this is expected to rise to over 1,000 as the project becomes fully operational.
“Mining is not mentioned in Kenya’s Vision 2030. We would like to see it incorporated in the vision as well as regulation and other government support around facilitating the achievement of the role of mining in Kenya’s economic growth,” said Carstens.
Kwale is the flagship project of Base Resources and will have a key impact on the company’s future.
“For us Kwale is a vehicle to open up our capital base and also to refine our business model in terms of the way we go about developing projects in Kenya, and generally Africa, and how we handle issues surrounding the community, environment and governments,” Carstens noted.