•Base Titanium produced a total of 137,881 tonnes of the three key minerals mined at Kwale—ilmenite, rutile and zircon
•According to Base, global pigment producers have generally indicated that demand for pigment was strong through the quarter
Titanium minerals mined in the country went up 20 per cent in the first quarter of 2020, production update by Base Titanium shows, amid growing sales compared to last year.
The Australian mining company produced a total of 137,881 tonnes of the three key minerals mined at Kwale—ilmenite, rutile and zircon.
The volumes are high compared to 114,293 tonnes mined during a similar period last year.
During the period(January-March), ilmenite produced totaled 105,035 tonnes, rutile 23,683 tonnes and zircon was 9,163 tonnes.
Last year's production, similar period, was 87,179 tonnes(ilmenite),20,171 tonnes(rutile) and 6,943 tonnes (zircon).
Minerals sold this year have equally grown 16.7 per cent as the company secured market for a total of 120,476 tonnes, compared to 103,192 tonnes last year.
The sale comprises 87,819 tonnes (ilmenite), 25,280 tonnes (rutile) and 7,377 tonnes (zircon).
“There was sound demand from customers, with ilmenite and rutile prices continuing to strengthen in the quarter while zircon prices reduced slightly,” Base notes in its report released on Thursday.
Its exports have remained steady even as China, its key export market, remains among the most affected in the global trading patterns, over COVID-19.
According to general manager external affairs, Simon Wall, Chinese companies dealing with titanium are far from the affected areas, hence business has not been hit.
“Export of minerals continues as normal. There is no disruption ” Wall told the Star in an interview.
Demand during the quarter for all products was firm and most customers, across the various products, market segments and regions, have advised that their facilities operated at normal levels with regular orders received from their customers, Base notes.
The sales have also been supported by long-term contracts entered with its buyers.
According to Base, global pigment producers have generally indicated that demand for pigment was strong through the quarter.
“Tight market conditions continued to prevail for sulphate ilmenite and high-grade chloride feedstocks (including rutile) resulting in further price improvement for both ilmenite and rutile,” it says in its quarterly report.
Some Chinese customers have however advised that there is a weakening outlook for pigment exports.
Subsequently, subdued conditions in the zircon market continued through the seasonally weak March quarter resulting in some marginal price erosion.
The shutdown of some operations in China during February 2020 resulted in the deferral of some shipments but concerns over security of zircon supply boosted demand towards the end of the quarter.
The Company’s small backlog of zircon sales, caused by the deferral of some shipments by Chinese customers in February 2020, was cleared by mid-April.
The Company’s regular zircon customers in China have agreed to take the full planned sales quantity of zircon for the June quarter at prices reasonably consistent with March quarter contracts.
Demand for zircon end products is uncertain over the coming months, the firm said, but it is expected that a drop in demand through the supply chain will be off-set to some extent by the restrictions on zircon supply coming from major producers in South Africa and other locations.
Base Titanium has refund claims for VAT paid in Kenya, relating to both construction of the Kwale Project and the period since operations commenced, totaling approximately $19.5 million (Sh2.067 billion) at March 31, 2020.
Refunds totaling $2.4 million (Sh254.4 million ) were received during the quarter. It received $3.1 million(Sh328.6 million) in the December quarter.
Meanwhile, the company has reduced its personnel at the mine site by 40 per cent, introducing a “stay at home” and “work from home” policy for non-operational employees.