18 October 2018

Kenya: Titanium Miner's Sales Hit Sh5 Billion in 3 Months

Titanium sales by Australian-owned Base Resources rose by 35.44 per cent in three months through September on increase in commodity prices and sales volumes, the Kwale-based firm has reported.

Base Resources earned Sh4.99 billion from shipments between July and September compared to Sh3.68 billion a year earlier, it said in a quarterly performance update.

Sales volumes of titanium -- which includes ilmenite, rutile and zircon -- rose 8.29 per cent year-on-year to 139,719 metric tonnes in the three-month period against a 1.6 per cent rise in production to 153,073 tonnes.

The company pocketed an average of Sh35,718.60 ($354) per tonne shipped during the period, 24.34 per cent higher than Sh28,756.50 in the same period the year before.

Base Resources is claiming a cumulative $22.9 million (Sh2.31 billion) in value-added tax (VAT) refunds from the taxman relating to the construction of the Kwale project and the period since it started operations in late 2013.

"These claims are proceeding through the Kenya Revenue Authority process, although no refunds were received during the quarter," said the firm.

In the April to June period, the company received $1.4 million (Sh141.26 million) in VAT refunds.

The miner did not disclose the amount it remitted in royalties.

It usually pays 2.5 per cent of sales to the government, translating to about Sh124.76 million.

"The main focus this quarter was ongoing optimisation of the recently upgraded wet concentrator plant operations and preparation for relocating mining operations to the South Dune in July 2019, together with exploration drilling programmes," said Base Resources in its trading update.

"The project primarily involves the supply and installation of 7,400 metres of slurry and water piping, an 8,500-meter 11kV power line, a bridge across the Mukurumudzi Dam spillway, a 1.25 megawatts slurry booster pump and a one-megawatt process water booster pump."

The firm estimates the total cost of engineering work, procurement, clearing and earthworks for the movement of the mine at $12.3 million (Sh1.24 billion), which will be booked in the financial year 2019.

Its application for a prospecting licence in Vanga, the area surrounding the Kwale operations, has been approved by the Mineral Rights Board and is awaiting issuance.

Once issued, the planned drilling programme is scheduled to commence in the first quarter of 2019.

Expenditure on exploration activities in Kenya during the quarter was $0.6 million (Sh60.54 million).

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