Sales to rise at Base despite weak prices

Australian miner Base Resources is banking on its rising productivity and additional license to boost her revenue and resize the mining sector's proportion of GDP.

In an interview on Friday, Base Resources, managing director Tim Carstens said the anticipated increase in production in all its three product range; Rutile, Ilmenite and Zircon would spur exports and elevate revenues.

In the financial year ending June 2016, the company’s rutile production went up by 19 per cent to 85,654 tonnes as Ilmenite output rose 6.5 per cent to 455,870 tonnes, but Zircon production jumped 40 per cent to 31,389 tonnes.

“Operationally, the quarter (June 2016) has been one characterized by consistent production, further enhanced plant performance in throughput and cost control. We expect an increase in throughput in 2017,” Mr Carstens said in an interview.

The MD however noted that sagging global commodity prices have weighed down revenues with one tonne of the minerals going for Sh19,100  from Sh20,800 the previous years.

Exploratory license

Kenya exported titanium worth Sh12.8 billion compared to Sh8.8 billion in 2014 despite a 5.4 per cent drop in the price.

The miner was recently granted another exploratory drilling license by the Ministry of Mining covering an expanded area of 177 square kilometers in Kwale County.

Mr Carstens revealed the firm is eyeing the speedy refund for its VAT claims by the tax man totalling Sh1.9 billion ($19 million) as at 30 June 2016 to boost its operations.

The Kenya Revenue Authority, (KRA) has since reimbursed the miner a total of Sh100 million out of these claims.

Titanium lifted Kenya’s mining exports by 14.7 per cent to Sh24 billion helping the industry to contribute the second-highest growth of gross domestic product after the construction sector last year.

“Base Resources is continuing to engage with the Kenyan Treasury and the Kenya Revenue Authority to expedite the remainder of the refund. We are encouraged by the recent move by Treasury to allocate KRA monies for VAT claims through a supplementary budget,” said Mr Carstens.

By 2017, Mr Carstens said the company expects to have a clearer vision of the potential titanium ore deposits in the area.

It has mined over 22.2 million tonnes since commissioning in October 2013.

Base Resources has also applied for an additional special prospecting license for an additional area covering 136km2 towards the Tanzanian border.

Titanium, which accounted for more than half of the minerals value is used as an alloy with other metals to produce lightweight metals for jet engines.

Rutile is used in the manufacture of refractory ceramic, zirconium is mainly used in linings for furnaces, kilns, incinerators and reactors; while Ilmenite is mined for titanium dioxide production used as a base pigment in paint, paper and plastics.