The payments came after the company reached an agreement with the government to pay higher royalties in exchange for an expanded mining area.
The latest payments to the government add to the billions of shillings that the State has earned from the mining venture in the form of taxes and royalties, making the Kwale operation the most profitable extractive business for the country.
Base Titanium, the company extracting titanium minerals in Kwale County, paid the government a total of $26.5 million (Sh3 billion) in taxes and royalties in the quarter ended December.
The payments came after the company reached an agreement with the government to pay higher royalties in exchange for an expanded mining area.
“Base Titanium Limited made royalty payments to the Government of Kenya totalling US$18.8 million (Sh2.1 billion) comprising the necessary catch-up payments to the June 2021 quarter and payment of the September quarter royalty at the agreed increased rate,” the miner’s Australia-based parent company Base Resources said in a trading update.
“Base Titanium Limited also paid corporate tax instalments of US$7.7 million (Sh874 million) to the Government of Kenya for the first half of full-year 2022.”
The latest payments to the government add to the billions of shillings that the State has earned from the mining venture in the form of taxes and royalties, making the Kwale operation the most profitable extractive business for the country.
The Kenyan government in September last year gave the company the right to extend its mining operations beyond the original boundary drawn on its special mining licence, which covered 1,661 hectares.
As a result, the royalty rate to be paid to the government doubled from the previous 2.5 percent of export sales value to five percent. The titanium minerals being extracted in Kwale County are rutile, ilmenite and zircon.
Titanium is an important pigment for industrial, domestic, and artistic applications. It is also a choice material for joint replacement, tooth implants, and body piercing.
The deal with the government also gave Base Titanium the right to extend the mine life to December 2023 and the company says it intends to keep operations beyond the new deadline by applying to expand the life and area covered by its special mining lease.
“The company is progressing a definitive feasibility study (DFS) on higher grade subsets of the Bumamani and Kwale North Dune deposits to extend Kwale Operations mine life to July 2024,” the miner’s parent firm said.
“Following a pit optimisation study completed in the quarter, a further Kwale North Dune pit area, referred to as the P200 pit area (in addition to the original P199 pit area), has been included in the DFS, which could further extend Kwale Operations mine life to early fourth quarter 2024.”
