Australian mining company Base Titanium has reported increased mineral production in Kenya in the third quarter of 2017, as the firm continues to intensify its operations in the South coast region.
Total production of the three main minerals mined in Kwale-Rutile, Ilmenite and Zircon increased by 800 tonnes, from 150,501 tonnes in June, to 151,301 tonnes in September.
Ilmenite production between July and August increased to 119,376 tonnes up from 119,364 tonnes in June.
Production of Rutile went up to 22,789 tonnes from 22,762 with an increased rutile recovery of 100 per cent compared to 98 per cent last quarter. Zircon production went up to 9,136 tonnes from 8,375 tonnes.
In the period under review, the miner exported 128,137 tonnes of Ilmenite, Rutile and Zircon for sale in the global market.
“Bulk loading operations at Base Titanium Likoni port facility continued to run smoothly, dispatching more than 116,000 tonnes of ilmenite and rutile during the quarter (178,000 tonnes last quarter). Containerised shipment of rutile and zircon through the Mombasa port proceeded according to plan,” the company said in its quarterly report released on Thursday.
Meanwhile the company has secured an increase in price per tonne for Zircon, in the wake of rising demand for the rare earth mineral.
According to general manager external affairs Joe Schwarz, demand remained strong through the September quarter, with inquiries and volumes requested from customers continuing to exceed the company’s capacity to supply.
He said the company has secured an increase of $150(Ksh15, 490) per tonne on Zircon contracts for the December quarter-making a total gain of $300 (Ksh30, 980) per tonne, or 34 per cent since the end of financial year 2017.
“Lower than anticipated global zircon supply, from both inventories and ongoing production, for calendar 2017 has led to an increasingly tight market and solid price improvement since the start of the year,” Schwarz said.
Ilmenite prices are also expected to go up in the last quarter of this year.
This is as a result of a drop in Chinese domestic ilmenite production which sharply dropped through July and August, on the back of tightened government environmental controls.
These supply constraints, when combined with improving ilmenite demand from increased pigment production during the seasonally strong northern autumn, has seen ilmenite prices begin to move upwards again through the latter part of the September quarter and into the December quarter.
“It is expected that prices will experience continued modest improvement through the December quarter,” Schwarz said.
Global average prices for ilmenite is at $70 (Ksh7, 229 ) per tonne, Rutile $900 (Ksh92,941) per tonne while Zircon goes for between $800 (Ksh82,615) and $1,000 (Ksh103,268) per tonne.
The emerging supply in the high-grade feedstock sector (which includes rutile) is resulting in continued upward price momentum.
Contract renewals for sales of bulk rutile to large mainstream customers in the second half of calendar year 2017 are reported to be at price premiums in the order of 10 per cent.
However, overall average market prices are constrained by the fact that most of the global high-grade feed stock volume was contracted on a 12-month fixed price basis for the 2017 calendar year, a common practice in the high grade feed stock market in recent years.
By Martin Mwita