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Tiomin Given Final Approval for Kwale Titanium Mine

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Issue: 26 Section: Canadian News Geography: Africa Kenya, Nairobi Topics: Mining

February 9, 2005

Tiomin Given Final Approval for Kwale Titanium Mine

NAIROBI, KENYA -- After years of negotiations, the Kenyan government has given a Canadian mining company, Tiomin Resources Inc., the final approval to start a multimillion dollar titanium mining project in Kwale. On Feb. 2, the Kenyan government signed a fiscal agreement with Jean-Charles Potvin, President and CEO of Tiomin, which includes a 50 per cent reduction of the corporate tax rate for 10 years from the start of commercial production of the mine. The agreement also stipulates a 2.5 per cent gross revenue royalty to the Kenyan government.

The biggest foreign investment deal since the current government came to power, the mining project will exploit the titanium-rich sands in Kwale for at least 14 years. The Kwale project is the first of four large mineral sand deposits along the coast of Kenya that Tiomin started exploring in 1995 . The Kwale project is expected to produce large quantities of ilmenite, rutile, and zircon, which are used in the paint, ceramic and electronic industries.

The Kenyan coast is a unique tropical expanse of beaches, ancient Arabic architecture, diverse coral reefs and mangrove forests that stretches 402 kilometres. The Kenyan coastal forest is considered by Conservation International to be one of the world's 25 hotspots – areas of extraordinary biodiversity that are seriously threatened. Many endangered species, including the only bands of Colobus monkeys on the East African coast and also Kenya's last remaining herds of sable antelope, depend on the coast's fragile ecosystem, which is already under stress from the tourism industry.

The mining project will not only impact the coastal ecosystem but also the residents of the area who must be relocated. There has been opposition to the project from local communities who are concerned over the destruction of their land and compensation issues. However, construction of the project will likely begin later this year, and commercial production is expected to start by early 2007.

This agreement with the Kenyan government comes at a time when Tiomin has also received a license to begin mining gold and other minerals in Peru.

Gemma Richardson

» Dongo Kundu, a film about the impact of the Tiomin project

» Tiomin Resources, official site

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