Kwale rakes in Sh99m from titanium royalties

Kwale rakes in Sh99m from titanium royalties

Kwale County is expected to earn Sh99.45 million for hosting the biggest titanium mine in Africa.

The earnings, from last year’s exports, make the county the biggest beneficiary of mining activity among the 47 counties for the third year running even as titanium minerals maintain their position as the biggest income earner in mining sector.

According to provisional data contained in the Economic Survey 2017 report, Base Titanium, which operates the only titanium mine in Kenya, exported 588.4 million tonnes of mineral sands last year worth Sh13.26 billion.

Mining Act

Given that the Mining Act 2016 has not changed royalties payment rules, new guidelines are yet to be implemented, thus the mining firm will pay 2.5 per cent of the value of the exported sands to the government.

Base Titanium will pay Sh331.5 million to the government as royalties, the county government retains Sh66.3 million while the local community takes home Sh33.15 million.

The earnings from titanium exports, which are the biggest in the sector increased 8.5 per cent from Sh12.8 billion in 2015.

Rutile was the best export earner among the titanium ores mined in Kwale. The value of Rutile exported was Sh6.8 billion while Ilmenite and Zircon earned Sh3.4 billion and Sh3.04 billion respectively.

Earnings from gemstone exports continued to grow last year with value expected to hit Sh936 million compared to Sh798.4 million in 2015. However, the quantity of gemstones dropped to 200 tonnes from the previous year.

Soda ash

Soda ash which has been the traditional leader in export earnings from mining sector continued on its decline path which started in 2012. Last year, the value of the mineral extracted from Lake Magadi are expected decline to Sh6.2 billion from Sh6.6 billion the previous year.

Soda ash export earnings drop was directly proportional to declining production. Last year, the country produced 301 million tonnes of soda ash compared to 319 million tonnes the previous year.

The survey shows mining sector’s productivity slowed down as a result of falling value and production of soda ash, fluorspar and gold.

“Total mineral output increased by 7.6 per cent from 1,596,300 tonnes in 2015 to 1,718,400 tonnes in 2016. Fluorspar output declined from 70,100 tonnes in 2015 to 42,700 tonnes in 2016. The decline could be attributed to temporary closure of the local firm and constraints faced in production following low demand and slump in prices since 2013,” says the report.

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