Fluorspar mining firm faces fresh hurdles

Friday March 25 2016

Kenya's main fluorspar producer’s decision to suspend operations in April 2016 due to weak commodity prices has sparked fears of economic hardship in the Kerio Valley.

Kenya Fluorspar Company (KFC) is also facing pressure from Elgeyo-Marakwet County residents who are demanding that they be involved in the process of renewing the firm’s mining lease this year.

The private mining firm based in Kerio Valley near Eldoret town in western Kenya has been hit by reduced demand.

Elgeyo-Marakwet County Senator Kipchumba Murkomen said the company did not involve local residents in making the decision to suspend fluorspar ore mining and processing operations from April 30 this year.

“We want the Ministry of Mining to ensure Kenya Fluorspar business operations benefit residents and the country or the company ships out,” he said. When the mining firm halts operations, hardship will be felt in the area.

KFC made decision to suspend operations in mid February due to increased operating costs and continued decline of global fluorspar prices since 2012.


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Fluorspar's traditional benchmark price for freight on board of $440 per tonne in mid 2012 dropped to an average of $300 to $280 from 2013 to mid 2015 as global demand softened and to less than $260 from January 2016.

Local residents are demanding that the mining lease be surrendered to another investor if KFC suspends operations. The firm’s 20-year special mining lease for 3,664 hectares from the Kenyan government commenced in 1997 and it is due for renewal this year.

“We do not want to hear a new mining lease has been issued to Kenya Fluorspar Company without the participation of local residents,” said Elgeyo Marakwet Woman Representative Susan Chebet.

The Kenya Fluorspar Company paid $635,000 to the Ministry of Mining as mining royalties for fluorspar for a period between July 1, 2013 and December 31, 2014, despite recording net losses in the two consecutive years.

Managing director Nico Spangenberg said operations had become unsustainable in the current environment and suspension of operations in April this year will lead to loss of jobs across all cadres.

“A collapse in market conditions has led to a dramatic reduction in prices and demand,” Mr Spangenberg said.

China accounts for about 60 per cent of global output of fluorspar, which is used for making steel, aluminium and refrigerant gases.

London-based consulting firm Roskill Information Services expects fluorspar prices to improve in the first half of 2017 while Kenya Fluorspar remains uncertain of the exact timing of recovery but confident conditions will change.

In June 2015, the firm suspended operations for two months and laid off 75 workers as it tried to sell a stock of 30,000 tonnes of fluorspar.