Africa Update
Published by MAC on 2006-01-13
Africa update
13th January 2006
Titanium firm may pull out
Michael Mugwang'a , The Nation (Nairobi)
The future of the titanium mining project in Kwale now hangs in the balance after the company behind it announced it may pull out.
Tiomin Kenya Ltd, the firm that has invested in the multi-billion project, last evening said it might not be able to raise the Sh 10.85 billion (US$ 155 million) extra cash it needs to start of the project.
In a statement released to the Press, the company's management says it might not be able to meet the conditions set by its financiers within the time agreed on to get the funds.
"It is unlikely that Tiomin will be able to satisfy the lender's financial conditions to meet the deadline to start drawing down on its debt package," the statement read in part.
The Canadian company now says it is reviewing its options on the investment following the bottlenecks it has encountered. The company complained that it had been met with numerous legal and bureaucratic delays, which have affected the profitability of the project.
It also says it has undergone financial expenses it had not envisaged and the value of its assets in America and Canada had also gone down due to the delays. The company said it will decide whether or not to continue with the project before the end of this month.
Since its inception about 10 years ago, the titanium mining project has been dogged by controversies that have delayed its take-off.
The firm has withstood many problems with both the Government and the residents, but has managed to set heavy machinery ready for work.
Put on hold
But yesterday's statement now puts that on hold.
Last month the firm got a shot in the arm when the Government got the go ahead to acquire land that it needs from the reluctant owners.
High court judge Joseph Nyamu last December 19 ruled that the Government was justified to take over the land by force "in public interest".
Over eight Kwale farmers had gone to court to bar the Ministry of Lands and Settlement from taking over the land saying the money being offered for compensation was too little.