Jinchuan gets nod to invest $25 million in Kenyan titanium project

Published by MAC on 2008-09-16
Source: Interfax China Metals and Mining

Jinchuan Group recently received board approval to invest RMB 171 million ($25 million) in a titanium project in Kenya in exchange for a 70 percent stake in Toronto-listed Tiomin Resources Inc.'s wholly-owned subsidiary, Tiomin Resources announced on Sept. 8.

The subsidiary, Tiomin Kenya Ltd., operates the Kwale titanium project. Once Jinchuan Group acquires the stake, it will arrange finances for the construction, development and daily operation of the project.

"However, Jinchuan Group's funding and building of the project is dependent upon the Kenyan government honoring its commitments. The responsibility for success or failure now rests firmly with the bureaucrats of the Kenyan government, who must complete their work for the deal to close," Robert Jackson, CEO of Tiomin Resources, was cited as saying in the announcement.

Jinchuan Group's board also authorized its management team to cooperate with Tiomin Resources on document finalization and any other related issues to close the transaction by Nov. 1, 2008.

The Kwale titanium project, located approximately 40 kilometers south of Mombasa, the largest port city in east Africa, contains 38.9 million tons of proven ore reserves of heavy metals, including titanium and zircon, grading 7.1 percent, as well as 78 million tons of probable ore reserves. The project is designed to produce 330,000 tons of ilmenite, 75,000 tons of rutile, and 40,000 tons of zircon per annum.

Jinchuan Group increased its shareholding in Tiomin Resources to 20 percent in June 2007 through an additional investment of CAD 10.9 million ($10.24 million), and secured an 18-month option to further increase its stake to 30 percent.

Jinchuan Group specializes in mining, smelting, refining and chemical engineering of nickel, copper, cobalt, precious metals and nonferrous metals. The company's output of nickel and platinum group metals each account for over 90 percent of China's total annual production.

Interfax China Metals and Mining 12/9/08