The value of Kenya’s titanium mineral exports fell to a record low in the three months ended September 2024 amid reduced production and shipment as the Kwale-based operation run by Base Titanium prepared for a wind up towards the close of the year.
Fresh data from the Kenya National Bureau of Statistics (KNBS) shows that the value fetched from the shipments during the review period dipped 83.9 percent to Sh713.2 million down from the Sh4.4 billion raised during the preceding quarter ended June.
The value obtained from the sales in the review period is also a 76.96 percent dip from the Sh3.1 billion fetched in the same quarter a year earlier.
The weaker performance, which came as Base Titanium geared up to close down operations at the lapse of the just-ended year on account of exhaustion of titanium deposits at the Kwale mining site, also translated to lower royalties paid to the government.
The government has been earning royalties from titanium exports at a rate of five percent of the sales.
In 2023, Base Titanium announced that it would be exiting the Kenyan operation at the tail end of 2024, citing insufficient titanium resources to sustain its continued stay beyond the set date.
At the time, the firm noted it could not expand the mining activities in Kwale due to several factors that included prohibitive costs, weaker prices of titanium in the international markets as well as substantial land acquisition and community resettlement programme. By the end of last year, after a decade of operation, Base Titanium had generated more than Sh36 billion for the Kenyan government in taxes and royalties.
The miner made its first shipment of titanium ore weighing 25,000 tonnes on February 14, 2014, just a day after it was granted an export licence by the government.
At the time, the firm, which is a subsidiary of Australian Base Resources, estimated that the Kwale project would produce 340,000 tonnes of ilmenite which would translate to about 10 percent of the global supply, 80,000 tonnes of rutile and 30,000 tonnes of zircon annually.
Base acquired the Kwale project in 2010 from Canada’s Vaaldiam Resources (formerly known as Tiomin Resources) for $3 million—Sh388 million at the current exchange rate— after the latter failed to progress the operation to production in 14 years of holding the concession.
Over the 10-year period to June 2024, Base Titanium paid the government a cumulative Sh17.4 billion in royalties, while also forking out Sh12.3 billion in income taxes to the exchequer.
From 2021, the company started paying dividends to its Australian parent Base Resources, which yielded some Sh5.3 billion to the Kenya government in the form of withholding taxes on these payouts.
