The Kenyan government will earn 3% royalties from the nobium project and five per cent from the rare earths mining. Under the Constitution, 80 per cent of these earnings will go to the central government, 15% to Kwale County and five per cent to local residents.
A global scarcity of rare earth in a market largely controlled by China has kept prices high, with Japan, which accounts for a third of all global demand, hard-hit by scarcity and looking to diversify its supply sources. Cortec, which holds the mining licence for Mrima Hill, has also confirmed a deposit of 680 million kilogrammes of niobium, held in 105 million tonnes at 0.7 per cent niobium pentoxide.
The global demand for niobium, used to strengthen steel, is rising rapidly, with Mrima Hill now positioned in the world’s top six deposits. Kenya is poised to join Tanzania as a rare earth supplier. In March, Tanzania announced the discovery of lower grade deposits within the Wigu Hill Rare Earth Project located 170 km south-west of Dar es Salaam.
World demand for rare earth elements are estimated at 136,000 tonnes per year, with global production around 133,600 tonnes in 2010. The difference is covered by previously mined stocks. Although many of the rare earth metals are not necessarily rare to find — some are more abundant in the earth’s crust than lead, gold, copper or platinum — they often exist in very small concentrations, making extraction difficult. And because of their similar chemical properties, rare earths tend to clump together, usually with radioactive elements such as thorium and uranium, making separation complicated and expensive.