Base Titanium, a mining company operating in Kwale, Kenya, is set to wind down its Kenyan operations by the end of 2024 due to the depletion of commercially viable ore reserves.

The company has allocated Sh1.1 billion ($7.7 million) to compensate its workforce as part of a redundancy plan.

The news comes after Base Resources, the Australian parent company of Base Titanium, announced its focus on a new titanium mining venture in Madagascar, with its first shipment expected by August 2027.

"As Base Titanium begins transitioning to mine closure and a post-mining footing, we take this opportunity to acknowledge the support and close working relations we’ve developed with the State Department of Mining," the company announced in January.

Employee Impact and Compensation

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While the exact number of employees slated for redundancy is unclear, Base Resources' financials for the period ending June 2023 indicate a total workforce of 1,746 employees and contractors.

An earlier report from June 2022 specifies 888 employees on the company's books, with the majority (870) being Kenyan nationals from Kwale and Mombasa counties.

In a presentation on its financial results for the half-year ending December 2023, Base Resources confirmed, "Following the October 2023 announcement... a provision for the redundancy of the workforce has been raised."

Planning for Closure and Rehabilitation

Base Resources assures that planning for the mine's closure began "many years ago," with a focus on responsible post-mining practices.

The company has identified four potential options for future land use, including large-scale agriculture, sustainable conservation, industrial training, and the utilization of tailings, with feasibility studies currently underway.

Financial Contributions and Revenue Decline

Base Titanium took over the Kwale operation in 2010 and has since contributed significantly to the Kenyan government through royalties and taxes.

Since 2014, when the company began shipping ilmenite, rutile, and zircon, it has paid the government Sh7 billion ($43.71 million) for the year ending June 2023.

This represents a decrease from the previous year's Sh10.4 billion ($64.8 million) payout.

The decline in revenue and royalties reflects the diminishing ore production at the Kwale mine.

For the six months ending December 2023, royalties halved to Sh532 million ($3.7 million) compared to Sh1.05 billion ($7.3 million) in the same period of 2022.

Revenue also dropped significantly, from Sh18.2 billion ($126.6 million) in December 2022 to Sh10.5 billion ($73.1 million) in December 2023.

Despite the closure, Base Titanium's Kenyan venture has been profitable.

The company has remitted billions of shillings in dividends to its parent company, including a payout of Sh13.5 billion ($84 million) for the year ending June 2023.