The miner’s net profit increased 11 times to $28.5 million (Sh3.2 billion) from $2.6 million (Sh292 million) the year before, helped by higher export volumes and rising prices of the titanium minerals ilmenite, rutile and zircon.
Besides the withholding tax, the Kenya Revenue Authority (KRA) collected income taxes of $5.3 million (Sh609 million) from the Kwale operation in the review period, up from $2.8 million (323 million) a year earlier.
This brought the government’s total earnings from the Kwale titanium operation to Sh2 billion in the review period.
Base Titanium, the company mining titanium minerals in Kwale County, paid the Kenyan government a total of Sh2 billion in royalties and taxes in the six months ended December. It also paid its Australian parent firm a $30 million (Sh3.4 billion) dividend in the review period when it recorded a major earnings jump.
The miner’s net profit increased 11 times to $28.5 million (Sh3.2 billion) from $2.6 million (Sh292 million) the year before, helped by higher export volumes and rising prices of the titanium minerals ilmenite, rutile and zircon.
“During the reporting period, the group’s Kenyan subsidiary, Base Titanium Limited, distributed $30 million (Sh3.4 billion) of surplus cash, via dividend, to the group’s ultimate parent entity, Base Resources Limited,” the multinational said in a trading update.
“The dividend distribution by Base Titanium incurred 15 percent Kenyan dividend withholding tax of $4.5 million (Sh512.3 million), which has been recorded as an income tax expense.”
Besides the withholding tax, the Kenya Revenue Authority (KRA) collected income taxes of $5.3 million (Sh609 million) from the Kwale operation in the review period, up from $2.8 million (323 million) a year earlier. The government also earned royalties of $7.7 million (Sh882 million), a 53 percent increase from $5 million (Sh569 million).
This brought the government’s total earnings from the Kwale titanium operation to Sh2 billion in the review period.
The larger royalties paid to the government came after the company agreed to double the payout rate last year to five percent from the previous 2.5 percent of export sales in exchange for an expanded mining area.
Base Titanium got the right to extend its mining operations beyond the original boundary drawn on its special mining licence, which covered 1,661 hectares. As part of the agreement, the company forfeited its value-added tax (VAT) claim of $16 million (Sh1.8 billion) arising from the construction of its mining infrastructure.
The deal saw the firm revise the life of its Kenyan operation to 2023 but with plans to further extend its presence in the country through new licence applications and exploration work.
Base Titanium’s sales in the six-month period surged 43.7 percent to Sh11.8 billion from Sh8.2 billion. The performance reflected a 21.6 percent rise in sales to 203,348 tonnes and the impact of titanium prices increasing 18.1 percent to an average of $514 (Sh58,518) per tonne.
China is a major buyer of titanium which is a key pigment for industrial, domestic, and artistic applications.
