Kwale-based Base Titanium is set to double royalties payable to the government from the current 2.5 per cent to five per cent.
According to the company’s general manager for external affairs and development Joe Schwarz, Base Titanium has agreed in principal with the Ministry of Mining to increase the royalties.
The miner did not, however, give timelines for the planned increase.
“We will be paying royalties at five per cent as soon as we are able to conclude the agreement and wrap that to the mining lease,” said Mr Schwarz in an interview.
The company has to date paid royalties to the government to the tune of Sh1billion. In the last financial year it paid Sh400 million in royalties.
In 2016 the firm, whose operations supports 1,400 indirect jobs in the supply chain through the purchase of goods and services in Kenya and a further 1,360 jobs in induced economic activity contributed mineral sands that included Zircon, Limenite and Rutile worth Sh13.2billion.
At full capacity, the miner expects to produce 330,000 tonnes of ilmenite, 80,000 tonnes of rutile and 25,000 tonnes of zircon, constituent minerals of titanium, annually.
It estimates the site has a reserve of 146 million tonnes of ore although independent analysts have raised the figure to three billion.
Data from Kenya National Bureau of Statistics Economic Survey 2017 shows that Kenya’s total mineral output in 2016 was valued at Sh23.3billion, of which Base Titanium accounted for Sh13.3 billion or nearly 60 per cent, up from 43 per cent in 2014 and 54 per cent in 2015.
The Kwale Mineral Sands Project is the single largest mining project undertaken in Kenya since independence with a capital investment of Sh26 billion.
More than Sh10 billion of the total investment capital was spent on Kenyan contractors and Sh5 billion was spent building infrastructure including a mine access road, a large water storage dam and boreholes, a 132kV power transmission line and sub-station and a purpose built storage and ship loading facility in Likoni.