Skip to content
Investment

Base Titanium Relatively High Paying Employer -Ernst & Young Report

BY Soko Directory Team · April 28, 2016 07:04 am

Base Titanium commissioned Ernst & Young to independently quantify the total economic and revenue contributions flowing from the development and operation of its Kwale Mine. The report included FY2016 operating data and also looks back at the impact made during the mine’s construction.

Report Findings

Mine Construction and Development

Trade Smarter, Grow Faster with Kingdom Bank Trade Finance

Economic contributions related to capital expenditure, referred to as “one-time” impacts, do not recur over the mine’s life. Base invested a total of US$310M (KES26.3b) on constructing and equipping the Kwale Mine.

  • Over US$100M of capital expenditure was spent with Kenyan service providers.
  • The construction phase supported a total of US$190M (KES16.2b) in economic output – measured as the sum of GDP and intermediate inputs:
  • US$106M (KES9.0b) directly;
  • US$61.3M (KES5.2b) indirectly; and
  • US$22.3M (KES1.9b) through induced contributions.

The construction phase also generated a significant number of jobs.

  • 8,255 “one-year” jobs in total where supported over the construction period;
  • Of the 3,285 direct jobs generated during construction over 1,300 were filled from the local community.

In addition to engaging local contractors and providing employment opportunities, the construction phase generated US8M (KES670M) in tax revenue.

Base spent US$61M (KES5.2b) on legacy infrastructure. While it supports the project, it will contribute to the economy of the region in the long-term after mining operations cease. They include:

  • Mukurumduzi Dam at a cost of US$14.5M (KES1.2b);
  • A 132kV power transmission line and substation US$5.7M (KES485M);
  • A sealed access road at US$6.6M (KES561M); and
  • A port and ship loading facility in Likoni costing US$34M (KES2.9b)

Employment

Employment opportunities are an important measure of a mining project’s benefits to a local community and the national economy. The employment multiplier is significant.

  • Base directly employs 642 people;
  • the operations support another 1,429 indirect jobs in the supply chain; and a further 1,361 induced jobs as a result of employee consumer spending.

This equates to the mine supporting 3,432 jobs in total;

  • For every direct employee an additional 4.3 jobs are created in the wider economy.

Employment is an important component of local content. At Base we actively prioritise opportunities for communities most impacted by our operations. As a result,

  • 63% of Base’s direct and indirect workforce is sourced from Kwale County; and
  • 96% of the direct and indirect workforce is Kenyan.

We are extremely proud of this achievement and It demonstrates both our commitment to maximising local content and the systematic skills transfer and succession planning programmes.

GDP Contribution

GDP is measured as the total value of labour incomes, taxes and gross operating surplus.

  • The total contribution to Kenya’s GDP in FY2016 at US$108M (KES10.9b) and projecting this over the life of the mine the GDP contribution will approach US$1b (KES101b).

Public Funds

Much of the public debate around a mining project focuses on the level of government revenue generated through taxation.

 

  • In FY2016, a year of depressed international min