Kenya's lucrative mining industry has once again attracted the attention of the globe after two Australian companies combined forces to bid for the Mrima Hill rare earth project.
RareX Limited and Iluka Resources Limited, both from Australia, formed a consortium and submitted a proposal to Kenya’s National Mining Corporation (NAMICO) in pursuit of the Mrima Hill rare earth-niobium-phosphate-manganese project in Kenya.
''Formal submission for Mrima Hill Rare Earths Project in Kenya has been made by the consortium to NAMICO under the Kenya Mining Act chapter 306, which, if successful, will see the proposal presented to the cabinet secretary for Mining, Blue Economy and Maritime Affairs to contemplate the formation of a joint venture with NAMICO,'' the statement by the Australian Security Exchange (ASX) read in part.
The Mrima Hill Project is located in Kwale County, less than 100 kilometers from Mombasa and 15 kilometers from the Indian Ocean coast, next to a sealed highway and close to geothermal power grids.
Considered a global significance for rare earth elements, Mrima Hill is a prospect for phosphate, niobium, and manganese.
It is also considered prospective for neodymium and praseodymium (NdPr), which are essential for green technologies, and that is why it has attracted Australian companies.
The two companies are seeking approval from the government, through the Ministry of Mining, to form a special purpose vehicle (SPV) to pursue the acquisition, de-risking, and development of the Mrima Hill Project and to negotiate the terms of a formal shareholders' agreement.
The SPV will become the counterparty to NAMICO in a joint venture company (JVco) to which the Prospecting Licence will transfer.
According to ASX, if the consortium proposal is accepted by NAMICO, Iluka will hold a 25 per cent equity stake in the SPV, and RareX will have at least a 20 per cent economic interest during the Prospecting Licence phase.
RareX will take the lead in the project, focusing on community engagement, environmental protection, and technical de-risking through studies and fieldwork.
The rare earths produced from Mrima Hill have the potential to feed Iluka’s Eneabba refinery facility in Western Australia. The refinery is under construction and supported by a Ksh136 billion (AU$1.65B) Australian federal government non-recourse loan.
The Mrima Hill Project is not new in the Kenyan scene, it first caught attention after the case against Cortec Mining Kenya Ltd, associated with slain businessman Jacob Juma, and Stirling Limited.
Cortec had sued Kenya for revoking its mining licence for niobium and rare earth minerals; it, however, lost the case and was required to pay Ksh300 billion to the Kenyan government.
