Base cops sovereign risk curveball
UPDATE 2.20pm: Base Resources has again been thrown a sovereign risk curveball associated with its mineral sands project in Kenya.
Shares in Base sunk after it warned of an unexpected invoice from the Kwale County Government claiming a $US57 a tonne levy on exports of products from the company's mineral sands project in Kenya.
Base said it disputed the constitutional validity of the levy and was working with the Kwale County Government and the Kenyan National Government to have the invoice withdrawn and the levy repealed.
"Base has received unqualified legal advice that the Kwale County Government does not have legislative authority under the Kenyan Constitution to impose such a levy, with all rights to manage and administer minerals exclusively reserved to the Kenyan National Government," the company said in a statement.
"Base is confident that this matter will be resolved shortly.
"However, in the event that the Kwale County Government invoice is not withdrawn or the levy is not repealed in a timely manner, Base will assess its options further, including taking the necessary legal action to have the levy declared unconstitutional and therefore void."
Base shares took a dive in October 2012 when the Kenyan government introduced new laws mandating a minimum 35 per cent local participation in mining licences.
The company began production and exporting of rutile and zircon from its Kwale project 50km south of Mombasa earlier this year.
Shares in Base Resources closed down 3.5 cents, or 9.21 per cent, at 34.5 cents.
