Australian-owned Base Resources says it received $3.5 million (Sh363 million) from the Kenya Revenue Authority (KRA) in the financial year ended June as part of the accumulated Value Added Tax refund claims.
The refunds translate to 14.5 percent of $24.2 million (Sh2.5 billion) that the firm says is the backlog owed since starting its Kwale operations in late 2013 where it mines titanium.
“Base Resources is continuing to engage with the Kenyan Treasury and the KRA, seeking to expedite the remainder of the refunds,” the firm says in its latest disclosures.
The Treasury has been slow at clearing the refunds as compared to the Sh1.5 billion royalties that Kenya earned from the Australian firm in the review period, up from Sh1.4 billion last year. The government charges royalties at the rate of 2.5 percent of the export values.
In July, the KRA released Sh14.2 billion that was owed to numerous companies in the country, with Kenya Private Sector Alliance saying the tax refunds would boost cash flows and spur activity in the private sector.
The Kwale unit is key for Base’s profitability. It posted a 13 percent jump in net profit to Sh4.96 billion in the period under review.
This helped Base Resources to post Sh4.1 billion net profit up from Sh3.5 billion. This was despite the Toliara Project in Madagascar posting Sh25.7 million net million while other operations booked Sh881 million loss.
The company is keen on expanding its Kwale operations in a move that is expected secure further revenues. It estimates that Kwale North Dune Mineral Resources contain 171 million tonnes.
“With the expectation that the resource will support modest extensions to Kwale Operations, further drilling has been completed and a study phase has commenced to assess the economics of potential mine life extensions,” the firm said.
The company recently shifted its mining operations within Kwale to the southern dune from the central dune where it had exhausted titanium.