Base Titanium says it is ready to double the royalty rate to five per cent in exchange for payment of pending valued-added tax refunds that now stand at Sh2.4 billion.
The government has not taken up the multinational’s offer.
The company expects titanium prices in the international markets to remain stable or rise further this year, a move that will support revenue growth as production is also expected to rise.
Australian mining firm Base Resources exported titanium products worth Sh5.3 billion from its Kwale mine in the quarter ended December, a marginal 3.6 per cent rise compared to Sh5.1 billion a year earlier.
Higher prices of titanium minerals such as zircon and rutile helped offset reduced output in the review period.
Production declined 6.8 per cent to 141,222 tonnes from 151,576 tonnes but prices of the commodities, per tonne, jumped 16.7 per cent to $377 (38,077) from $323 (Sh32,623).
“Higher zircon and rutile prices in the quarter and steady ilmenite prices contributed to the average revenue per tonne increasing to $377 (Sh38,077) per tonne,” the multinational said in a trading update.
The company did not say the amount it paid in royalties but it usually remits 2.5 per cent of sales to the Kenyan government, indicating that the State could get about Sh132 million.
Base Titanium says it is ready to double the royalty rate to five per cent in exchange for payment of pending valued-added tax refunds that now stand at Sh2.4 billion.
The government has not taken up the multinational’s offer.
The company expects titanium prices in the international markets to remain stable or rise further this year, a move that will support revenue growth as production is also expected to rise.
“Ongoing supply constraints in the high-grade feedstock sector (including rutile) have maintained upward pressure on rutile prices,” the company said.
“This will continue into the March 2019 quarter with solid price increases being contracted for upcoming rutile shipments.”
Base Titanium is set to shift its operations to the South Dune by June at a cost of Sh1.2 billion, having mined most of the titanium reserves in the current Central Dune.
“Engineering work, procurement, clearing and earthworks for the transition continued in the quarter with equipment deliveries commencing in December 2018,” the company said.
“The project primarily involves the supply and installation of 7,400 metres of slurry and water piping, an 8,500 metre 11kV power line, a pipe bridge across the Mukurumudzi Dam spillway, a 1.25-megawatt slurry booster pump and a 1-megawatt process water booster pump.”
PAYE Tax Calculator
Note: The results are not exact but very close to the actual.
