Nairobi — China's Jinchuan Group, has increased its shareholding in Tiomin Resources Incorporated's Kwale titanium mining to 20 per cent, the Canadian firm has said.

In a statement on Tuesday, Tiomin said the $9.5 million (Sh665 million) agreement would finance and expedite the development of the mining project.

"This investment will significantly strengthen Tiomin's cash position to about Sh1.9 billion," Tiomin explained.

The firm also said it had offered Jinchuan 18 months to increase its interest in the mine to 30 per cent by paying Sh1.02 billion. Jinchuan initially got a 9.9 per cent stake in April last year for $6.5 million and a $35 million subordinated debt facility.

Tiomin Chairman and Chief Executive Officer, Mr Jean-Charles Potvin, said the financing "begins what we hope is an accelerated development programme with potential cost savings by maximising Chinese content".

Mining is scheduled to start during the first half of 2008.

Tiomin expects to mine an annual average of 330,000 tonnes of titanium-bearing ilmenite, 77,000 tonnes of rutile and 37,000 tonnes of zircon.

In February, Tiomin said the Kwale mineral sands project was halted. It explained that delays and rising costs had made the project's lenders to withdraw a $155 million (Sh11 billion) debt facility.

But Tiomin later "clarified" the lenders had not "formally" withdrawn the facility but said some "significant issues" would prevent Tiomin from borrowing.

Jinchuan is the largest producer of nickel, cobalt and platinum group metals in China, Tiomin said.