Firm sees higher mineral output from Kenya

Mineral explorer, Base Resources Limited, has recorded an increased output and shipment on all its three mineral products in the financial year to June 30, 2016.

The company, which has roots in Australia, said in its quarterly report that production of zircon was up by 40 per cent to 31,389 tonnes from 22,416 tonnes mined in the previous year. The output for rutile, a raw material used in paints, plastics, paper and foods, increased by 19.7 per cent to 85,654 tonnes. In 2015, the firm got 71,537 tonnes.

Some 455,870 tonnes of ilmenite were mined in the 12 month period, being 6.6 per cent improvement. The mineral is used in production titanium dioxide production. In his operational update, the firm’s Managing Director Tim Carstens said that bulk loading of the three products at Likoni Port continues to run smoothly.

“More than 155,000 tonnes of ilmenite and rutile have been dispatched during the quarter ended June 2016. By end of quarter, all stocks of ilmenite had been sold from Base Resources’ warehouse in China,” he said.

According to the update, revenues per tonne sold in the quarter ended June was $208 (Sh21,067). This was a drop considering that in the second quarter, a tonne fetched $245 (Sh24,766). However, Carstens said that it is normal for quarter-on quarter revenue to vary significantly since the number of bulk rutile sales in each quarter also varies.

VAT refunds

The firm is upbeat that there will be improvement in ilmenite prices through the September quarter pegged on the expectation that major consumers of high grade feedstocks will increase their demand. The firm managed to bring down operating costs by slightly over $1 million (Sh101 million) to $12.3 million (Sh1.2 billion) in the fourth quarter.

Base Titanium, Kenya’s first large-scale international mining project, shipped the first consignment of minerals in February 2014 after years of delays.

The management noted that operating costs per tonne in three months to June averaged $82 down by 15 per cent in prior quarter but expects it to shoot up in future. “Operating costs in the coming quarter is expected to increase due to planned mid-life servicing of the mobile fleet, however the timing is dependent on condition monitoring of the fleet,” said the company in a statement.

The Kenya Revenue Authority owes the firm $19 million (Sh1.9 billion) in Value Added Tax refund claims since it began its operations in Kwale. Mr Carstens said that he expects that National Treasury and KRA will refund them so as to further explorations.

In the next 12 months, the firm targets zircon and rutile output to rise by up to 27 per cent and 11 per cent respectively while that of ilnerite to increase by 6 per cent. The mine is also expected to increase production of zircon by up to 27 percent to between 35,000 and 40,000 tonnes.