Base Resources Limited, the Australian company developing a mineral-sands project in Kenya, said it is working with the authorities in the country to have an export levy imposed by a local government rescinded. The Kwale County told the West Perth-based firm in June it plans to apply a Sh5,000 ($56) per metric tonne tariff on exports of rutile and ilmenite by Base’s Kwale Mineral Sands project. Base says the fee is unconstitutional and should be withdrawn. “Base remains comfortable with its legal position and expects to have the matter resolved in the near future,” the company said in a quarterly update published on October 8. “Political considerations are the prime impediment to the definitive resolution of this issue,” it said.
Additional charges
County governments are testing their authority to raise revenue under a revised constitution that was introduced in 2010. Mombasa County, which neighbours Kwale, said in May it plans to levy additional charges on users of East Africa’s biggest port to fund development plans. Kenya’s Constitution allows counties to impose charges for services they provide, property rates and other taxes approved by Parliament. They are prevented from imposing customs duties and other fees on the import and export of goods.
Base Resources said in June it would “assess its options further, including taking the necessary legal action to have the levy declared unconstitutional,” should the Kwale county government fail to repeal the levy.
Kwale County Governor Salim MvuryaВ was in a meeting when Bloomberg called his office last week seeking comment. Base Resources spokesman Simon Wall’s mobile phone was switched off when Bloomberg called him and an auto-response from his e-mail said he’s unavailable until November 3.
Kwale Mineral Sands boosted production of ilmenite, zircon and rutile by 10 per cent to 122,355 tonnes in the three months through September, according to the company. Exports of the minerals, which are used in the ceramics industry and as pigments in paint and plastics, totalled 132,102 tonnes, it said. Base Resources began its first shipment of minerals from the Kwale mineral sands project early this year after being given export approval by the Government. The firm plans to export over 450,000 metric tonnes of titanium minerals annually.
The Likoni marine facility was completed in December and deliveries of finished ilmenite and rutile product are being stockpiled in the 60,000 tonne capacity port storage shed in advance of shipment. Maiden shipment Mining Cabinet Secretary Najib Balala, who flagged off the maiden shipment, described the project as historic having taken 18 years before the realisation of the first export. The products included 340,000 metric tonnes of Ilmenite, 30,000 of Zircon and 80,000 metric tonnes of rutile products. The consignment was loaded to the MV African ship at the company’s $29 million port facilities at Likoni mainland jetty in the coastal city of Mombasa.
The short term market for titanium dioxide feedstocks continued to show signs of improvement through the December quarter with reports from major pigment producers suggesting pigment demand had improved, and stock levels and plant utilisation rates had started to normalise in the second half of last year. As at the time of the first shipment, industry sources indicated that Base had agreed sales schedules with all customers for 2014.
Source: Standard Digital
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