Firm business

Base Titanium pays 10.7 billion shillings to parent company


Base Titanium pays 10.7 billion shillings to parent company

Operations at the Base Titanium Mining Plant in Kwale County in this photo taken June 29, 2022. PHOTO | KÉVIN ODIT | NMG

Base Titanium, the titanium ore mining company in Kwale County, paid a record 10.7 billion shillings dividend to its Australian parent company Base Resources in the year to June, when its income net has tripled.

The local subsidiary had paid the Perth-based multinational a dividend of 7.1 billion shillings the previous year.

The new payment cemented Base Resources’ position as the recipient of Kenya’s second-largest dividend income after Vodacom Group Limited and Vodacom Group Plc are set to earn a combined 22.2 billion shillings from Safaricom for the year ending in march.

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“During the reporting period, the group’s Kenyan subsidiary and owner and operator of Kwale Operations, Base Titanium, distributed $90 million (10.7 billion shillings) of excess cash, via dividends, to the entity ultimate parent of the group, Base Resources,” said the Australian. indicates the multinational in its latest annual report.

The cash distribution came as the local subsidiary’s net profit reached $105 million (12.5 billion shillings) during the reporting period, from $28.8 million (3.4 billion shillings). ) the previous year.

The Kenyan government has been one of the main beneficiaries of the boom in titanium sales, collecting a total of 6 billion shillings in the form of taxes and royalties. The dividend attracted a withholding tax of $13.5 million (1.6 billion shillings) during the reporting period, compared to $9 million (1 billion shillings) deducted in the previous payment.

Base Titanium also paid corporation tax of $19.6 million (2.3 billion shillings), well above the $9.2 million (1.1 billion shillings) paid the previous year.

Mining royalties paid to the government also increased from $13.8 million (1.6 billion shillings) to $18 million (2.1 billion shillings).

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The royalty rate was doubled to 5% of titanium sales last year in a deal that saw Base Titanium get a bigger mining area while the government kept value tax refunds added (VAT) that were due to the minor.

The agreement announced in October 2021 gave the company the right to expand its mining operations beyond the original boundary drawn on its special mining permit, which covered 1,661 hectares.

Meanwhile, Base Titanium has waived its VAT claims of $16 million (1.9 billion shillings) resulting from the construction of its mining infrastructure.

The Kwale operation has become more profitable, helped by stable production and soaring prices for ilmenite, rutile and zircon titanium minerals in world markets.

The miner’s sales jumped 39.8% to 33.3 billion shillings in the year ended June, reflecting the impact of the average mineral price rising 32.9% to $621 (74,426 shillings) per ton.

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“Higher product prices and disciplined cost control have resulted in Kwale operations [earnings for the year ended June]says Base Resources in the report.

Titanium is an important pigment for industrial, household and artistic applications. It is also a material of choice for joint replacement, dental implants and body piercing.

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