Base Titanium recorded a 20.8 percent decline in sales in the quarter that ended June on reduced exports, a performance that will reduce royalties for the Kenyan government.
The company recorded sales of Sh10.3 billion (at current exchange rates) in the review period from ilmenite, rutile and zircon which it mines in Kwale County.
This was down from sales of Sh13.1 billion in a similar quarter the year before. The government earns royalties from the firm at five percent of export sales value.
The firm’s exports of titanium minerals fell 21.3 percent to 104,000 tonnes in the review period, resulting in reduced turnover.
The average price per tonne sold rose marginally to $695 from $691. The company had previously benefited from rising prices of the commodities in the international markets but demand has weakened in recent months.
Among the minerals impacted by the slowdown in the price rally is ilmenite which is top product for Base Titanium by production and export quantities.
Producers of pigment — whose applications include food colouring, paint and sunscreen— are among the major buyers of titanium minerals.
“Ilmenite demand and prices in China improved at the end of the March quarter and into the start of the June quarter as Chinese pigment plants ramped up production in anticipation of a rebound in the domestic pigment market,” Base Resources, the parent firm, said in a statement.
“However, sentiment became increasingly negative through the quarter as the expected improvement in conditions was not realised. Increasing competition for pigment sales...led to reduced production from some operations in China, which led to a corresponding decline in overall demand for ilmenite over the quarter.”
