Kwale ore worth more than Sh51.2 trillion, firm says

By STANDARD REPORTER

Cortec Mining Kenya managing director David Anderson and Msambweni MP Suleiman Dori during an event to celebrate the issuance of a mining licence to the firm.  [PHOTO: TOBIAS CHANJI/STANDARD]

Kwale, Kenya: The value of the rare earth minerals recently discovered in Kwale County could be worth more than the estimated Sh51.2 trillion, an official has said.

Cortec Mining Kenya managing director David Anderson says the price of niobium is set to rise following a spike in global demand.

Experts say its consumption would increase substantially over the next 20 years as demand swells at 10 per cent per year due to huge consumption of steel in Brazil, Russia, India and China.

On Monday, investors in Pacific Wildcat Resources were rewarded with a 28.5 per cent lift in the stock price after the firm announced a new resource estimate for its Mrima Hill niobium and rare earth project in Kenya.

Pacific Wildcat said Mrima Hill is the world’s highest grade undeveloped rare earth deposit outside of China, where total resources exceed 750,000 tonnes of contained total rare earth oxides.

 “The deposit has a high-grade indicated component of 11.2 million tonnes. A preliminary economic assessment is expected on the project by the end of this year,” PAW President and CEO Darren Townsend said.

Pacific Wildcat’s resource estimate follows an announcement last week that the company had developed a flow sheet to recover niobium and rare earths into saleable products. Bench-scale testing achieved 90 per cent dissolution for niobium and 99 per cent for rare earths through a hydrometallurgical process.

Niobium prices have remained relatively flat for over a decade, averaging Sh1,100 per kilogramme.

The growth in the amount of niobium being used to produce an increasingly higher grade of steel is also expected to push up the demand for the mineral.

In 2000, for instance, 40 grammes of ferroniobium were added per tonne to produce high-grade steel. However, eight years later, 63 grammes per tonne would be added.

Given the absence of an actively traded market and lack of price disclosure for competitive reasons, analysts say predictions about future niobium prices and those who make such predictions behave rather conservatively.

Tanzania also expects to start the mining of the rare mineral this year although its deposits are of a lower quality.

Cradle Resources, an Australian-based minerals exploration company, has already secured commitments to raise more funds for its Panda Hill Niobium project. Cortec also holds the mining license for Tanzania’s Mirima Hill where it says there is a 680-kilogramme deposit of niobium.

Niobium is listed by the United States as a “strategic” and “critical” metal essential to national security due to its lack of substitutes and limited availability.