At least a quarter of the half million people who live in Kenya’s Kwale district, near the Indian Ocean coast, eventually may be evicted to make way for a controversial mining project by the Canadian firm Tiomin Resources Inc. The rest, and others living along the coast, could face significant health risks due to the toxic emissions associated with titanium mining.
As controversy rages, Kenya’s government is caught between pleasing the company and remaining accountable to its citizens. The standoff also pits the government and Tiomin Kenya Limited, the Kenyan subsidiary of the Canadian firm, against local and international environmental groups. The critics include farmers, the Coast Mining Forum, Action Aid (Kenya), Muslims for Human Rights, Coastwatch, Environment Trust of Kenya, and coastal leaders.
Used in manufacturing military hardware – not to mention golf clubs – titanium is mainly found in China, Japan, Kazakhstan, Russia, and the US. But the Kwale deposits represent up to 15 percent of the world total. According to Kenyan military sources, the West isn’t comfortable importing such a vital mineral from China or Russia. Thus, the find could be a big plus for Kenya’s economy.
Top government officials have assured the company that mining can start this year. In newspaper ads, Tiomin defends its bid, saying it has “followed the Kenyan law” in seeking a license, and that extremely low levels of uranium and thorium in the titanium-laden Kwale sands won’t pose a health risk. The marine terminal at nearby Shimoni beach will neither need dredging nor pose a danger to the coral reefs, it also claims.
In response, local mining and environmental experts charge that the publicity blitz is really designed to secure a license before the new National Environmental Management Authority (NEMA) is fully established, and a legal challenge, filed by environmentalists to block the project, can be heard.
In a letter last November to the chief accounting officer in Kenya’s Ministry of Environment and Natural Resources, Tiomin’s senior vice-president and chief operations officer Ian Schache suggested that the firm work with the National Environment Secretariat (NES) on licensing. But lawyers for the opposition contend the NES has no legal standing. Tiomin doesn’t want to wait for NEMA, empowered by the new Environmental Management and Co-ordination Act (EMCA) to handle such applications. It’s also uncomfortable with the National Environment Council, which is yet to be officially launched.
Tiomin scorned an environmental impact assessment (EIA) report compiled by Kenyatta University. The firm’s vice-president, Mathew Edler, claims, “Kenya lacks environmental consultants who have the necessary experience to manage the EIA for the Kwale project. Placing the EIA title on its cover does not make it credible.”
According to Harun Ndubi, executive director of Kituo cha Sheria, a local legal organization, the firm has disregarded Kenya’s land laws, especially the stipulation that any lease ought to reach the local land control board six months prior to signing. “When I sought evidence that the company had adhered to this piece of legislation,” he explained, “its president Jean Potvin failed to produce consent documents, saying only that the company had deposited them with the Kenya government.” Oddly, the company claims it didn’t retain copies of the documents.
Fast Track, Soft Sell
The titanium snafu also involves compensation for Kwale residents who would be evacuated. Initially, Tiomin offered about $114 per acre, later upping that to $505. Edler argues that he based the figure on “lands office records on land sales in the area,” using them as the basis to develop individual offers.
Residents and anti-project lobby groups argue that the payment is too low, based merely on the value of the soil and existing development, not the rich deposits beneath.
“If it were in a developed country, Tiomin would be talking about a third of the value of the mineral deposits,” says Ndubi. He charges that the archaic Mining Act and yet-to-be-operational EMCA work to Tiomin’s advantage. The former stipulates that mining companies pay five percent of the value of minerals to the government.
Local observers believe that Tiomin hopes to get its license before the repeal or amendment of the Mining Act. Paying the nominal percentage will be a small price compared to the huge profits the company will reap.
Since the resource at stake represents over 10 percent of the world’s known titanium, opponents of the project argue that licensing shouldn’t be rushed. Tiomin estimates that the deposits contain 200 million tons. If true, exploitation costs could be recovered within three years.
Complicating the picture is the issue of radiation. “If a deposit has uranium, we have to be very careful,” says Dr. Wellington Wamicha, a Germany-trained Kenyan mineralogist who led the Kenyatta University assessment. “The only reason the Kwale residents are currently not being affected by radiation is because thorium and uranium, the radioactive emitters present in zircon deposits, are in their thermodynamic stable state,” he explains. But mining – through attrition and processing the ore by subjecting it to hot sulphuric acid – will release the radioactive elements into the environment.
According to the Kenyatta study, the project will also result in the removal of vegetation, affecting the reflectivity of solar radiation. As more solar radiation is reflected back to the sky, the result could be more heating of the cold inward-bound winds, as well as negative impacts on local rainfall.
The study also argues that mining will eliminate aquatic biodiversity and pose a serious hazard to ecosystems, communities, species, and genetic material. Mutations due to radiation and chemical toxins, the report says, will lead to disruption of gene pools.
Further, mining will contaminate ground water bodies, increase competition for water resources, degrade water quality, and lead to gaseous emissions (sulfur dioxide) from combustion of heavy oils and use of sulfuric acid. The open-cast (strip mining) method to be used involves clearing all vegetation, stripping and stockpiling the top soil so as to expose the mineral-heavy sands.
In recent years, Canada has increasingly looked beyond its own boundaries to exploit mineral wealth. In fact, the country has become a leader on the global mining scene, both in terms of mineral exploration and capital generation.
At the same time, however, the nation’s mineral industry has contributed to “the ugly Canadian” image, favoring maximization of revenues at the expense of local communities and the environment.
The drama began unfolding in 1995, when Tiomin struck what are now recognized to be the biggest unexploited titanium deposits in the world. These include five titanium-rich sites with 650 million tons at Mambrui and 1.2 billion tons at Sokoke. The quantities at Sabaki, Mombasa, and Kwale haven’t been made public. Controversy has dogged the company since the day the announcement was made in early 1997. Since then, the issue has snowballed into what may be the biggest controversy since Kenya’s independence.
Among the first accusations was the charge that the plan was less than transparent. Tiomin preferred to deal with government officials behind the scenes, ignoring stakeholders in the areas where deposits were found. According to opponents, no case has yet been made that the project will actually benefit Kenyans, rather than just a handful of government operatives and Tiomin.
Last October, residents of Msambweni unleashed a scathing attack on Kenya’s minister for tourism, trade, and industry, Nicholas Biwott, one of the ministers said to be behind the Tiomin deal. “We shall not allow the mining to go on and we shall not budge in our demands that the sums to be paid out as compensation be renegotiated,” announced their spokesperson Boniface Mbevi, a prominent farmer.
Coastal MPs claim that there were plans to move the project to Biwott’s ministry. One of the most powerful ministers in President Daniel arap Moi’s government and a key ally, Biwott has been cited in a number of political and business scandals.
Writing in the New York Times last June, columnist Blaine Harden noted, “During his 10 years as minister of energy, Biwott was linked in the Kenyan press with a number of kickback schemes and non-competitive contracts awarded to companies in which he had an interest.” To date, Biwott hasn’t denied a relationship with Tiomin.
Tiomin puts the value of the deposits at about $132 million. But according to Suleiman Kamolle, MP for Matuga constituency in Kwale district, the true value may be astronomically higher. A banker, Kamolle argues that he obtained the data from French and German geologists and statisticians.
“The $132 million being put as value of the titanium sand mineral deposits by the Canadian firm is a negligible amount,” he says. “We have gathered enough evidence from the earmarked 200-square-kilometer area disproving that figure and have found out that the real value of the deposits is a staggering $11 billion.”
Kwale residents recently moved to the high court to stop the project. Although the case is pending, however, most plaintiffs pulled out after government officials threatened them with “dire consequences” and Tiomin greased their hands. Of course, those involved deny these claims.
The Panama Connection
With all the hoopla, Tiomin and other Canadian companies have increasingly come under the spotlight. While the details of Tiomin’s activities along the Indian Ocean and Madagascar haven’t been readily available, a report on its operations in Panama makes shocking reading.
In an undergraduate thesis submitted to McGill University in Canada, Katy Elisabeth Mamen looked at the situation. “The socio-cultural impacts of Canadian mining companies in remote areas of less developed countries are of particular concern, especially where indigenous communities are involved,” she writes. Her paper, Canadian Mining Multinationals and Indigenous Communities: A Study of Company Community Dynamics at the Cerro Colorado Copper Mine and Ngabe Bugle Comarca, Panama, is a stinging indictment. In particular, it examines the factors influencing Tiomin and the effects on a local indigenous community during the project development phase of the Cerro Colorado copper mine in western Panama.
There are clear parallels between what happened in Panama and what’s likely to transpire in Kwale if Tiomin is licensed to exploit the titanium deposits. According to Mamen’s thesis, “[I]t is expected that once Panama’s two world-class mines, Cerro Colorado and Petoguilla, commence operations, mineral products will exceed bananas as the country’s primary export item, generating between $250 million and $300 million a year in revenue, and accounting for 60 per cent to 70 per cent of total exports. Thus global pressures and the promise of a brighter economic future have been key factors in fueling Panama’s desire to exploit its mineral resources.”
The extent of Canada’s mining presence in Panama is staggering. By mid-1997, approximately 70 percent of Panama’s land surface area, including approximately 70 percent of its legally delineated indigenous lands, had been opened for mineral concessions. Approximately 45 percent of Panama’s land had been solicited for concessions; at least 40 concessions have been granted for exploration, and 12 for extraction. Taken together, this covers more than seven percent of the country.
Panama’s five most important concessions – Cerro Colorado, Cerro Quema Remance, Santa Rosa, and Petaguilla – are all currently under Canadian management. Petaguilla, with an estimated 20 billion pounds of copper, as well as gold and molybdenum, is currently in the feasibility phase under Goerecursos International SA, a Canadian conglomerate. As of 1998, 70 percent of exploration contracts had been awarded to Canadian companies.
With such an important stake in Panama’s minerals sector, and the potential to affect a large area, including most indigenous territories, Canadian mining companies “have a particular responsibility to ensure socially and environmentally responsible business.” But do they follow through? No, reports Mamen, who points to the common social problems associated with mining in remote areas (alcoholism and prostitution), and the side effects of environmental impacts (migration), resulting from the loss of land to practice traditional subsistence agriculture.
Large-scale mining in remote areas can promote profound local economic change. But in Kwale, only about 200 direct and 300 indirect jobs are expected for locals. Governments also argue that mining contributes to sustainable development. The impacts include foreign exchange earnings, revenue from taxes, short-term employment, human capital formation, and technology transfer. But no technology transfer is expected in Kwale, since the final processing will be done in Canada.
Finally, reliance on a single dominant source of income leads to problems upon mine closure, including disruption of traditional ways of life and social structures. This will likely be the outcome in Kwale if Tiomin moves ahead with mining.
In recent years, conflicts surrounding mining companies and local communities have received considerable international attention. Industry and governments have been forced to focus more attention on the impacts of operations, recognizing the importance of integrating community concerns into planning. Although multinational corporations may not acknowledge the conflict between the legal concept of land ownership and the indigenous idea of land stewardship and communal access, “the World Bank recognizes the disruption of indigenous people as a main social issue in mining,” notes Mamen.
In Panama, developments at Cerro Colorado have resulted in significant impacts for the local population. These include loss of land, exacerbating an already critical situation. Roads were constructed without consulting the affected landowners, resulting in problems such as destruction of fences, and loss of livestock and arable land. In addition, rivers draining from Cerro Colorado have reportedly been damaged by exploration activity, while residents along San Felix River have seen the disappearance of fish, a main staple.
This scenario is likely to be repeated in Kwale. For example, Tiomin wants to build a ship loading facility that will include a 200-meter-long jetty and storage facility. The minerals would be transported about 30 miles in 40-ton trucks, adding up to 470,000 tons a year. The environmental impacts of transporting cargo are merely the tip of this iceberg.
When a country is relatively underdeveloped and has little experience in mining – but a strong desire to attract foreign investment – its capacity to deal with resulting social or environmental issues is often non-existent. Thus, much of the onus shifts to the private companies. The question is: Can Tiomin be trusted? To start, the identities of any local shareholders are unknown. In fact, Tiomin insists there aren’t any. Edler reports that the two companies incorporated in Kenya – Tiomin Kenya Ltd. and Kenya Titanium Minerals Ltd. – are both 100 percent owned by Tiomin Resources Inc. No Kenyan individuals or companies have any direct or indirect interest in either.
On the other hand, Tiomin may be stone-broke. It has no income, and Kwale is currently its only active project. It has accumulated expenses of over $40 million, and survives on bank financing through interest generated by the Kwale project.
The only reason Tiomin remains viable is that Barclays Capital Finance recently lent the company $2 million. Therefore, if Kenya awards the mining contract, it will simply sub-contract the work, in hopes of recovering from the losses accumulated in Panama and Canada.