The most prosperous mining endeavor in Kenyan history is coming to an end, according to the parent business of the corporation, Base Resources, based in Australia, which claims that there are no longer sufficient titanium resources in Kwale to support operations past December 2024. The shutdown is expected to result in the loss of 900 jobs, and the state would lose billions of shillings in taxes and royalties per year.
The local subsidiary paid the Kenyan government $75 million in the year that ended in June 2022, which included royalties, corporate income tax, staff payroll taxes, and withholding tax on services, among other things. As of June 2022, the subsidiary employed 900 people, of whom 90% were from Kenya. The majority of these workers were employed in Kwale and Mombasa counties. Suppliers who dealt with the miners and made a total of $66.2 million in revenue during that time are among the stakeholders who may suffer losses.
We have looked into every possibility to prolong Kwale operations much further. But despite all of this work and the community’s widespread support, we haven’t been able to find any more mineral discoveries that are large enough or of a high enough quality to warrant extending. While it will be sad to end a mining operation in which we take great pride, Base Resources managing director Tim Carstens said in a statement that the company views the shift to post-mining as an opportunity to further solidify its reputation for excellence in the full life cycle of mining. Kwale operations have served as the cornerstone upon which Base Resources has been built.
The Australian multinational had made billions of shillings in dividends from the deal, and it has stated that it will shift its attention to Madagascar, where it is trying to start mining titanium materials, while continuing its exploratory efforts in Kenya and Tanzania. The multinational stated that a number of reasons, such as exorbitant costs, declining titanium prices on global markets, significant land acquisitions, and community relocation programs, stopped it from expanding its mining operations in Kwale.
The cessation of titanium mining in Kwale, would have far-reaching consequences impacting various aspects of the local economy, environment, and social fabric. From economic downturns to environmental rehabilitation efforts and community welfare, the repercussions would be significant and multifaceted.
1. Economic Impacts:
a. Loss of Revenue: The closure of titanium mines in Kwale would lead to a substantial loss of revenue for the local government and mining companies. Titanium mining has been a major source of income, providing royalties, taxes, and employment opportunities.
b. Unemployment: Thousands of workers directly and indirectly employed in the mining sector would face unemployment, leading to economic hardships for families and communities. This would also exacerbate poverty levels in the region.
c. Decline in Local Businesses: The mining industry supports various local businesses, including suppliers, transportation services, and hospitality establishments. The closure would result in reduced demand for goods and services, leading to closures and layoffs in these sectors.
d. Impact on Infrastructure Development: The revenue generated from mining activities often funds infrastructure development projects in the region. With the decline in revenue, the government would struggle to maintain existing infrastructure and undertake new projects, affecting the overall development of Kwale.
2. Environmental Impacts:
a. Land Rehabilitation: Titanium mining involves significant land disturbance, including deforestation, soil erosion, and habitat destruction. The cessation of mining operations would necessitate extensive rehabilitation efforts to restore the land to its natural state. This process could take years and require substantial investment.
b. Water Pollution: Mining activities can result in the contamination of water sources due to the release of heavy metals and other pollutants. The rehabilitation process would need to address water pollution issues to ensure the safety of drinking water and aquatic ecosystems.
c. Biodiversity Loss: The destruction of natural habitats during mining operations can lead to the loss of biodiversity, including plant and animal species. Efforts would be needed to restore habitats and protect endangered species in the region.
d. Impact on Coastal Ecosystems: Kwale's coastal ecosystems, including coral reefs and mangrove forests, could be affected by mining activities and require restoration efforts to mitigate damage and preserve biodiversity.
3. Social Impacts:
a. Displacement of Communities: Mining operations often require the relocation of communities living in the vicinity of the mines. The closure of mines could allow for the return of displaced communities to their original lands, but it would also pose challenges in terms of resettlement and land rights.
b. Social Unrest: The loss of jobs and economic opportunities could lead to social unrest and increased crime rates in the region. Unemployment and economic instability may exacerbate existing social tensions and inequalities.
c. Health Impacts: Mining activities can have adverse health effects on nearby communities due to air and water pollution, as well as occupational hazards for workers. The cessation of mining operations would alleviate some health risks but would also require ongoing monitoring and healthcare services for affected individuals.
d. Shift in Livelihoods: With the decline of the mining industry, communities would need to transition to alternative livelihoods to sustain themselves. This could involve investments in agriculture, tourism, and other sectors to create new employment opportunities.
In conclusion, the end of titanium mining in Kwale would have significant and complex consequences for the local economy, environment, and society. While it may alleviate some environmental and social challenges associated with mining, it would also pose new economic hardships and require long-term planning and investment to mitigate adverse effects and facilitate sustainable development in the region.