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October 19, 2021
Sub-Sahara Mining & Industrial Journal
Mining News

Corona impacts Kenya’s mining sector as earnings drop

Kenya’s earnings from mineral production declined by 5.8 per cent last year, the Economic Survey 2021 shows, as the mining sector reeled from effects of the Covid pandemic.

The country made Sh22.7 billion from mining activities down from Sh24.1 billion recorded in 2019.

Most of the major minerals recorded a decline in production and value, including titanium ore minerals which account for up to 65 per cent of Kenya’s mineral exports.

The total quantity of titanium ore minerals, produced in Kwale by Autralian firm Base Titanium, declined by 9.5 per cent from 486,200 tonnes in 2019 to 440,000 thousand tonnes in 2020.

This came with a slight drop in the total value of the minerals which declined to Sh19.5 billion from Sh19.6 billion in 2019.

“This slight decline in value despite notable reduction in the quantity produced was as a result of 28.2 per cent increase in the average export price of the titanium ore and concentrates,” the survey released on Thursday, by National Treasury CS Ukuru Yatani, notes.

Average export price per tonne of the titanium ore minerals however increased by 27.9 per cent from Sh32,000 in 2019 to Sh41,700 in 2020.

Soda ash production declined by 9.7 per cent from 282,000 tonnes in 2019 to 254,000 tonnes in 2020 as average export price decreased by 5.1 per cent during the review period.

Quantity of crushed refined soda produced in the review period dropped drastically to 159,600 tonnes from 388,500 tonnes recorded in the previous period.

The decline is attributed to decrease in demand for minerals in the external market due to Covid-19 pandemic.

The value of diatomite produced in the review period however increased by 6.8 per cent from Sh 51.5 million in 2019 to Sh55 million.

Overall gross value added from the mining and quarrying sector grew by 6.6 per cent from Sh72.7 billion to Sh77.5 billion.

This, even as credit advanced to the sector (mining and quarrying) decreased by 12.9 per cent from Sh13.9 billion as at the end of December 2019, to Sh12.1billion as at the end of December 2020.

Base Titanium remains the leader in mineral production in Kenya where together with Tata Chemicals, which accounts for 48.9 per cent of sector revenues, the two holds 77 per cent of the country’s mineral revenue earnings.

Others key mining companies in the country are Kenya Fluorspar which accounts for 18.6 per cent of mining revenues, Karebe Gold(4.6 per cent), Kilimapesa Gold(0.7 per cent) and Lapigems Limited(0.4 per cent).

The rest of the industry players account for 15.5 per cent.

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