Thursday, July 13, 2006

Tiomin: A raw deal?

This interesting article/interview recaps some of the questions that have dogged the controversial Tiomin project in Kwale and which I am sure have been covered during the 10 years that that it has taken the project to start.

Such as:
- What is the true value of the Tiomin resource? $1,3-billion, or $11-billion? Given the current debate of whether mining & oil should disclose all their payments some of the figures which are bandied about need to be reviewed.
- Why was the approval of the Toronto stock exchange required for a Canadian-Chinese finance deal based in Kenya? Where’s the NSE & CMA?
- Was it really cheaper to construct a value adding processing plant in Canada than in Kenya? And that is after shipping the raw product to Canada?
- Why was an environmental-impact assessment (EIA) by a South African consultancy firm used and a Kenyan one ignored? And isn’t our NEMA the ultimate arbiter on environmental issues?

The article notes that most opposition to the project was because Tiomin was accused of being sketchy on the finer details of the project.

I hope when we find Oil, (and it’s only a matter of time, si Uganda has already found theirs?!), the benefits will accrue within Kenya.

4 comments:

coldtusker said...

@Banks - Tiomin (or its parent) is LISTED on the TSE (not NSE) thus they might need TSE approval. If Tiomin was listed on the NSE then the CMA comes into play e.g. StanChart PLC bought 25% of First Africa. NSE & CMA have no jurisdiction over the Stanchart (K) parent.

- Mineral "value" are always estimates coz there is no way of accurately measuring recoverable amounts.

- Royalties should be disclosed since I don't trust the government!

- The raw materials are being shipped to China not Canada. It would have been better to process the product in Kenya BUT we need good negotiators as well as provide the infrastructure (roads, stable & clean supplies of electricity, water, etc).

- I doubt NEMA has the qualifications to do so? SA are the big kahunas in mining. The CMA can't even properly evaluate offerings!

- Disclosure lies with our government not Tiomin. The agreement might preclude Tiomin from disclosure.

akiey said...

Mining corporations dealing in less industrialised nations have had a long, bad reputation of fleecing the source countries esp by not disclosing the actual value of the natural resources and the anticipated profits.

In Kwale, just like in Tanzania's Bulyanhulu, the company is not being entirely honest with their 'take home' earnings. The local populace has had a running battle of wits concerning adequate compensation for their land and farming areas.

Also, the numerous allegations of high level corruption and elbow greasing to win favours or to urge the environment and natural resource authorities to look the other way has really disadvantaged the countru as a whole.

Kwale & Kenya shold never be disadvantaged in any deal that is tantamount to pillage of our natural, human and economic resources.

Mitzy said...

Jianchuan Group is buying the Kwale minerals that are being mined by Tiomin, the ore will then be shipped to Asia and Europe. Through this Jiachuan is diversifying their portfolio as they hadn't ventured into titanium mining, but had plans to do so. As for why the ores are being cleaned and exported rather than being upgraded at the Coast, to Tiomin, putting up the smelting and roasting plants would be uneconomical, since the quantity of titanium in Kwale was too small to allow for the realization of costs. Remember the mine life is 6 years with a max span of 11 years.
Also, in line with the lack of full disclosure on the mineral(s) worth, I feel the displaced locals should have been given more $$$. They were being evaluated/valued as poor peasant farmers, rather than mine owners and should have been compensated accordingly.

coldtusker said...

Tiomin (with one of the oil majors e.g. Kenol) should build a natural gas depot to receive the LNG from the Middle East.

Tiomin should be given the leeway to build a processing plant for the Titanium & other products.

Tiomin should build a "port" for exporting the semi-finished product.

Tiomin should build the necessary infrastructure BUT be paid to do so i.e. instead of paying royalties in cash to the government they fund the infrastructure. The use of the funds would be audited.

It benefits Kenya by increasing local industries, improves the infrastructure while keeping the grubby fingers of government officials out of the pie!

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