Base Titanium’s revenue fell by 42 percent in the quarter ending June 2024 compared to the corresponding period in 2023 as the company continues to wind down its mining operations in Kwale ahead of ore depletion at the end of this year.
Regulatory filings made by its Australian parent, Base Resources show that sales revenue in the quarter stood at Sh5.5 billion, compared to Sh9.6 billion in the quarter to June 2023.
This was primarily due to a fall in titanium ore export volumes by 40 percent to 63,500 tonnes, as production at the mine declined by nine percent to 71,200 tonnes.
There was also a decline in the average price per tonne of ore to $655 (Sh86,545) from $695 (Sh91,830) a year earlier.
The declining volumes are in line with the progressive depletion of ore as the Kwale mines reach the end of their useful life. The company has already depleted ore in areas known as the south and central dunes, and is currently mining the remainder of the north dune and a separate area known as Bumamani.
“Following a solid March quarter, demand for all products remained firm through the June quarter but sentiment became more cautious as the quarter progressed due to economic conditions remaining more subdued than anticipated,” said Base Resources in its quarterly activities report for June 2024.
“Due to the nationwide civil unrest and protests against the Government of Kenya’s 2024 Finance Bill, measures were put in place to ensure employee safety when travelling to and from work, which resulted in some interruptions to operations late in the quarter.”
Base Resources took over the Kwale operation from Canada’s Vaaldiam Resources (formerly known as Tiomin Resources) in 2010 for $3 million — Sh396.4 million at current exchange rates — and has been paying royalties and taxes since 2014 when shipment of the titanium ore started.
In the year ending June 2023, the company paid the government a total of $43.71 million (Sh5.77 billion) in royalties and taxes, down from $64.8 million (Sh8.56 billion) in the preceding year.
The venture has also been profitable for the Australian multinational, which has earned billions of shillings in dividends, including an $84 million (Sh11.1 billion) payout in the year ended June 2023.
The deal will give the American firm effective control over the Kenyan operation from September. Base Resources shareholders will hold approximately 16.4 percent of the combined group at the conclusion of the deal, giving Energy Fuels the majority 83.6 percent stake.
The company’s move to bring in a strategic partner comes ahead of its shift in focus to Madagascar’s Toliara titanium mining operation as the Kenyan one is wound down.
→ cmwaniki@ke.nationmedia.com
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