Companies

Base Resources pays Sh1.1bn to Treasury on Sh2.1bn profit

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Base Resources mines titanium in Kwale. FILE PHOTO | NMG

Australian mining firm Base Resources paid Sh1.1 billion to the Kenyan government in the form of taxes and royalties in the six months ended December, when its net profit more than doubled to Sh2.1 billion.

The multinational, which mines titanium in Kwale, says in a regulatory filing that it paid the government income taxes of Sh467.4 million and royalties amounting to Sh635.9 million in the review period.

Base paid Sh490.3 million royalties in the same period the year before when it did not, however, pay income taxes.

Higher payouts to the government came on the back of rising prices for its exports rutile, ilmenite, zircon and zircon low grade, which have significantly boosted its profits.

The Sh2.1 billion net profit is more than double the net earnings of Sh859 million recorded a year earlier, with the performance driven by a 27.8 per cent sales jump to Sh9.2 billion.

Sales volume declined 5.3 per cent to 284,499 tonnes but higher titanium prices led to the jump in sales value.

Base said the average price per tonne of its titanium minerals surged 34.7 per cent to Sh32,373 from Sh24,021.

“In the reporting period, Base Resources sold more than 280,000 tonnes of product from the Kwale Operation, with shipments being made to a combination of customers with existing offtake agreements, regular customers buying on a spot basis and casual spot customers,” the company said in a statement.

The multinational added that it has maintained its strong market presence in China –the world’s largest ilmenite market– with over 225,000 tonnes of ilmenite sold into the Chinese market during the reporting period.

“Solid relationships with major Chinese ilmenite consumers have ensured regular sales through a mix of shorter term contracts (one to three-year duration) and spot sales.”

Base said it raised its capital investment at the Kwale mine to Sh1.7 billion in the review period from Sh238 million a year earlier.

The higher investment went into construction of the second phase of the mine which is expected to be complete by June.

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