State's Sh125b headache over titanium dip

Mining activities at Base Titanium in Kwale County. [File, Standard]

The depletion of commercially viable titanium ore reserves in Kwale County now threatens the government's ambitious plans in the mining sector.

According to the 2023-2027 strategic plan by the State Department for Mining, the government targets to increase revenue collections from the sector from Sh15 billion as it was in 2023/24 to Sh125 billion in 2027/2028.

The collections are meant to come from acceleration of mineral development, promotion and value addition which is the strategic plan's first key result area (KRA).

However, the depletion of titanium ore reserves in Kwale County, as announced by Base Titanium, has poured cold water on this prospect.

Titanium mining contributes 65 per cent to the country's mineral production.

Base Titanium is now in the process of rehabilitating the land where it was operating. The ministry has extended its contract by 15 years to facilitate this process.

The firm had earlier issued an redundancy notice to its employees as a result of the depletion of reserves.

The last shipment of exports from the miner sailed on February 12, 2025 marking the end of an era that has lasted a decade enabling the country rake in billions from sales abroad.

"The State Department for Mining strives to boost the economy from mining activities by increasing the share of mining in the GDP from the current 0.8 per cent to more than 10 per cent by 2030 through increased exploration, mineral development and value addition," reads the strategic plan in part.

Additionally, the Voi Gemstone Centre has been refurbished and it's trading booths leased.

This is apart from operationalisation of the National Mining Corporation, the State's investment arm on matters mining, and initiating other mineral value addition centres such as Kakamega Gold Refinery (Kakamega County), Granite Processing Plant (Vihiga County) and revival of Fluorspar factory in Elgeyo Marakwet County.

"These initiatives will highly boost the contribution of the mining industry to the economy," the plan states.

According to the 2025 Economic Survey, the effects of this depletion is already being felt in the economy as the sector contracted by 9.2 per cent in 2024, a further drop from a negative growth of 6.5 per cent in 2023.

"The total value of minerals produced reduced from Sh33.8 billion in 2023 to Sh25.5 billion in 2024 mainly attributed to reduced earnings from titanium ore minerals," the report says.