SA firm to invest Sh200m to explore minerals in Kwale

South African mining firm Cortec has announced plans to invest a further $2.4 million (Sh200 million) to continue prospecting for rare earths and niobium in Kwale County. Photo/GIDEON MAUNDU


By GITONGA MARETE gmarete@ke.nationmedia.com
Posted Saturday, May 12 2012 at 19:55
South African mining firm Cortec has announced plans to invest a further $2.4 million (Sh200 million) to continue prospecting for rare earths and niobium in Kwale County.





The company has already spent $ 2 million (Sh170 million) at Mrima hill to explore the two minerals since 2008, Deon Alberts, the project manager said.


“Besides that, we have also set aside close to $70 million (Sh5.9 billion) to construct a niobium concentrate plant at the same site where large deposits have been discovered according to our recent research,” he said.


Mr Alberts said the plant will produce a niobium concentrate which will be combined with iron ore and other additives in a smelting plant in Mombasa to create the highly sought-after ferro niobium (FeNb) which can be sold worldwide.


Niobium is a high speciality mineral used in strengthening steel in the application of spacecraft parts whose use as a consequence of new technological innovations has surged globally.


Niobium-toughened steel is also used in the manufacture of water and sewerage pipes due to its resistance to corrosion.


The current life expectancy of the mines in Kwale would be 16 years but new exploration and mineral discoveries in the area could greatly extend this, Mr Alberts added.


Pacific Wildcat Corporation (PAW), which is acquiring 70 per cent of the mineral deposits from Cortec, in a press release last month announced plans to start drilling at Kiruku Hill this year.




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The area is three kilometres from Mrima hill where minerals estimated at US$3.25 billion (Sh270 billion) have been discovered.


Three samples


PAW president Darren Townsend said rare earths mineral was identified and analysis brought returns of 4.45, 3.00 and 2.53 per cent in three samples drawn from Kiruku Hill.


The firm is looking for a return of over one per cent for the rare earths to justify economically viable quantities, David Anderson, Cortec managing director said in an earlier interview.


Early this month, PAW signed a letter of engagement with GMP Securities L.P. to raise up to US $25 million through a brokered private placement.


The net proceeds from the offering will be used to complete the acquisition of 70 per cent indirect interest in the Mrima Hill niobium and rare earths project for ongoing exploration and resource definition work and for general corporate purposes, Townsend said.


Although the community had initially opposed the Kwale project, the prospecting firms have signed a memorandum of understanding with the Kaya Mrima Self-Help Group to get support of projects in education, health, culture and biodiversity.


According to John Omenge, the chief geologist in the ministry of Energy, the niobium deposits in South Coast is one of the largest deposits in the world.


The development comes in the wake of recent discovery of oil in Turkana and is expected to raise Kenya’s profile as a producer of mineral resources.


National Oil Corporation of Kenya last week also signed an agreement with Japan Oil, Gas and Metals National Corporation to conduct joint geophysical surveys to establish whether there are commercially viable hydrocarbons in the country.




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