•Production however slowed down with total produced ores closing at 112,046 tonnes compared to 118,787 tonnes same period last year.
•This signals good returns for the government, which earns royalties at 2.5 per cent on revenues from titanium ores, after a drop in 2019.
Kenyan based, Australian mining firm Base Titanium yesterday reported a strong sales record for the June quarter despite a drop in production.
Total sales for the three key minerals mined at Kwale—ilmenite, rutile and zircon closed at 140,234 tonnes .
This is an increase compared to 139,696 tonnes sold in a similar period last year, signaling higher revenues for the government in royalty earnings.
The good performance comes at a time when the Covid-19 pandemic has disrupted the global export and import market.
Production however slowed down due to the effects of Covid-19, with total produced ores closing at 112,046 tonnes compared to 118,787 tonnes same period last year.
Base’s general manager external affairs, Simon Wall, attributed the high sales to a stable supply and demand in the market, with key customers remaining committed to purchases (contracts).
However, despite the good show, there is uncertainty on the future of titanium mining in the country, with the current mine life at the Base Titanium’s Kwale project ending in less than two years.
“Chinese pigment producers (the Company’s main ilmenite customers) have re-confirmed their demand for ilmenite and their intention to proceed with planned shipments over the remainder of the calendar year 2020,” Wall said during a production briefing yesterday.
Ongoing firm demand from customers in the quarter supported further upward movement in ilmenite prices, while rutile and zircon prices remained steady, Wall said.
Chinese domestic pigment demand has been recovering since shutdowns in February 2020 and has partially off-set a decline in export demand.
The Covid-19 related shutdowns of ilmenite production in China and India through the March and June quarters further exacerbated the global ilmenite shortage, which Kenya capitalised on.
“The market for ilmenite remains tight in the early stages of the September quarter,” Wall noted.
This indicates good returns for the government, which earns royalties at 2.5 per cent on revenues from titanium ores, after a drop in 2019.
The Economic Survey 2020 shows the total value of the three titanium ore minerals dropped from Sh20.3 billion recorded in 2018 to Sh19.6 billion in 2019.
“Ilmenite and Zircon minerals’ values declined by 18.0 and 11.1 per cent respectfully while that of Rutile mineral increased by 13.2 per cent in 2019,” the survey released in April shows.
Export earnings from titanium ores and concentrates declined from Sh15.4 billion to Sh13.9 billion, even as the unit price of titanium ores and concentrates exports rose by 19.5 per cent to Sh32,555.6 per tonne, in 2019.
Base Titanium is hoping to expand and extend its operations in Kenya beyond 2025 when its current Special Mining Lease ends.
Production, based on the mine life, comes to an end by December 2022.
It is hoping the government will speed up approval for prospecting and mining licenses it has applied for, to allow production and exports to continue.
To date, it has paid more than Sh2 billion in royalties and expects the contribution to GDP to reach Sh100 billion over the life of the current mine.
Base Titanium alone represents 65 per cent of Kenya’s minerals output value contributing about Sh20 billion annually to the country’s exports of which 55 per cent goes to China.