Titanium miner sales fall to Sh7.9bn on exports dip
County governments collected below one percent of the Sh16 billion they could have raised from natural resource exploitation fees. FILE PHOTO | KEVIN ODIT | NMG
Base Titanium, the firm mining titanium minerals in Kwale County, saw its sales drop by 6.4 percent to Sh7.96 billion in the quarter that ended December as exports declined.
The revenue declined from Sh8.51 billion recorded in a similar quarter a year earlier, reflecting the impact of a reduction in the quantity of exported minerals ilmenite and zircon.
The miner sold 74,100 tonnes of ilmenite, marking a 43 percent decline from what had been sold in a similar quarter in 2021.
Zircon sales also dropped by 19.4 percent to 5,000 tonnes. Rutile sales rose by 26.6 percent to 14,700 tonnes as those of low-grade zircon tripled to 4,700 tonnes but were not enough to compensate for revenues lost on reduced sales of ilmenite and zircon.
The average price per tonne increased to $651 (Sh80,822) from $459 (Sh56,985), helping to mitigate the impact of reduced shipment of the commodities.
Base Resources, which owns the Kenyan subsidiary, said that rutile prices experienced further gains while ilmenite and zircon prices declined.
The prices of the three minerals are expected to fall in the quarter ending March 2023.
“Subdued conditions in most downstream markets are applying downward price pressure across all products for the March quarter, however demand for most products is expected to stabilise and provide a steady footing for future prices,” said the firm.
Base Resources says rutile demand from smaller welding and titanium metal sectors remains strong.
Increased rutile inventories in Asia have, however, placed pressure on the price premium.
During the quarter, the firm increased production by 3.8 percent to 116,600 tonnes.
Base Resources has kept unchanged the Kwale operations’ production guidance for the 2023 financial year ending June, given that the mining of the South Dune and the lower grade North Dune are set to start in March.
“Export demand for these producers is likely to be maintained, particularly as high-cost sulphate pigment production in Europe has been curtailed,” said the firm.
The miner is also counting on the potential recovery in the Chinese domestic market following the lifting of the government’s Covid-19 restrictions to lift the demand for ilmenite imported into China.
Base Titanium continues to implement the Bumamani Project, which will extend Kwale operations mine life.
Expenditure on the Bumamani project during the quarter was $9.9 million (Sh1.5 billion compared with $9.2 million (Sh1.4 billion) in the preceding quarter as construction, earthworks and final land access activities continued.
The company had lodged prospecting licence applications to the Kenyan government for an area in the Kuranze region in Kwale as well as an area south of Lamu.
However, the two applications remain on hold pending the lifting of the government's November 2019 moratorium on the issuance of new mineral rights.
