Kwale titanium growth steady as demand for sulphate holds

What you need to know:

• Prospecting for new mining sites continues despite threat of Covid-19 global march wiping out gains across various sectors

• At its mining sites in Kwale, the Base Titanium operations continued steadily on the South Dune orebody with mined tonnage of 4.3 metric tonnes, lower than the last quarter’s 4.6 metric tonnes.

• This will be further hampered by Covid-19 effects in the coming quarter after the company reduced its workforce by more than 40 per cent by introducing a “stay and work-at-home” policy for non-operational employees to reduce exposure of its employees to the viral disease.

Despite the Covid-19 pandemic, and seasonal factors, demand for titanium products during the first quarter this year has remained stable with orders from customers remain regular, Base Titanium Company has announced.

The company in its first quarter 2020 report indicates demand for titanium products has remained strong through the quarter and tight market conditions continued to prevail for sulphate ilmenite and high-grade chloride feedstocks (including rutile) resulting in further price improvement for both ilmenite and rutile.

Subsequent to quarter end, some Chinese customers have advised that there is a weakening outlook for pigment exports.

Subdued conditions in the zircon market continued through the seasonally weak March quarter resulting in some marginal price erosion.

"The shutdown of some operations in China during February 2020 resulted in the deferral of some shipments but concerns over security of zircon supply boosted demand towards the end of the quarter. The company’s sales and shipments remain normal and in accordance with plan for the June quarter," read part of the report.

Supply chain
The company’s small backlog of zircon sales, caused by the deferral of some shipments by Chinese customers in February, was cleared by early April after the company’s regular zircon customers in China agreed to take the full planned sales quantity of zircon for the June quarter at prices reasonably consistent with March quarter contracts.

Though the demand for zircon end products is uncertain over the coming months, it is expected that a drop in demand through the supply chain will be off-set to some extent by the restrictions on supply from major producers in South Africa.

At its mining sites in Kwale, the Base Titanium operations continued steadily on the South Dune orebody with mined tonnage of 4.3 metric tonnes, lower than the last quarter’s 4.6 metric tonnes.

This will be further hampered by Covid-19 effects in the coming quarter after the company reduced its workforce by more than 40 per cent by introducing a “stay at home” and “work from home” policy for non-operational employees to reduce exposure of its employees to the viral disease.

Mining tenure arrangements continue to progress with the Kenyan Ministry of Petroleum and Mining as a precursor to an anticipated updated Ore Reserve based on the expanded 2017 Kwale South Dune Mineral Resource as announced in October 2017.

However, progress has slowed as the government focuses on combating the Covid-10 pandemic.

Further drilling of the northern sections of the Vanga Prospecting License remained on hold pending resolution of community access issues.

A north eastern extension of the Vanga Prospecting Licence is under application to cover further prospective ground which is now available.

The additional prospecting licence applications lodged for an area south of Lamu together with an area in the Kuranze region of Kwale county about 70 km west of the Kwale Operation remain in progress through the granting process.