Kwale titanium miner nets Sh5.5 billion
What you need to know:
- Base Resources sold 176,075 tonnes of titanium in the first quarter ended March, a 13.3 per cent increase from 155,327 tonnes.
- The multinational said it benefited from increased demand for ilmenite in China and reduced production in western markets.
- Titanium accounts for more than half of the value of Kenya’s mineral exports.
Australian mining firm Base Resources exported titanium products worth Sh5.5 billion from its Kwale mine in the first quarter ended March, a 37.5 per cent increase compared to Sh4 billion in the same period last year.
The multinational did not say the amount it paid in royalties but it usually remits 2.5 per cent of sales to the national government, indicating that the State could get more than Sh100 million.
Titanium accounts for more than half of the value of Kenya’s mineral exports.
The sales surge was driven by higher prices for titanium (rutile, ilmenite and zircon) in the global market, with the price for a tonne rising to $314 (Sh31,400) from $258 (Sh25,800).
The company sold 176,075 tonnes of titanium, a 13.3 per cent increase from 155,327 tonnes.
The multinational said it benefited from increased demand for ilmenite in China and reduced production in western markets.
China’s decision to restrict ilmenite imports from Vietnam and India due to political and market factors have further boosted Kenya’s exports into the Asian economic giant.
“Outlook for the second and third quarters looks good and the market prices are good,” Joe Schwarz, Base Titanium general manager for external affairs and development said during a press briefing on Wednesday.
He said that the company’s proposal to double the royalty rate to five per cent is yet to come into effect due to changes in the Ministry of Mining.
Ilmenite and rutile are the leading titanium components produced by the Australian firm.
Production levels, however, fell by about three per cent to 142,430 tonnes from 146,161 tonnes, marked by zero production of Zircon low grade in the quarter.
Base attributed the reduction to the mine’s shutdown last month to allow for the completion of final equipment and piping installations for the second phase of the project dubbed KP2.
“The KP2 Project execution remains in line with the approved expenditure budget. Engineering and design work for the transition of mining from the Central Dune to the South Dune will commence in mid-2018, with construction completion scheduled for the second half of 2019,” Base said in a statement.