Competition Authority of Kenya (CAK) has approved the indirect control of Base Titanium by EFR Australia PTY Limited.
- EFR Australia is a wholly owned subsidiary of Energy Fuels Inc (EFI), which engages in the exploration, evaluation, development and mining of Uranium, vanadium and rare earth element properties.
- Base Titanium explores ilmenite, rutile and Zircon minerals in Kwale County.
- The transaction involves the acquisition of 100 per cent of the issued and outstanding shares in the capital of Base Limited by way of a scheme of arrangement in exchange for shares in the capital of Energy Fuels Inc.
“This approval has been granted based on the finding that the transaction is unlikely to negatively impact competition in the market for titanium minerals in Kenya, nor elicit negative public interest concerns, the two key considerations during merger analysis,” said Competition Authority of Kenya.
According to the parties, the rationale for the transaction is diversification of EFR PTY’s mining business.
The relevant product market for the proposed transaction is the market for titanium minerals. The target mainly exports its products to China, USA, Japan, Malaysia and Spain. It also sells some of its products locally.
The major by‐product/co‐product of mineral sand mining are Titanium Dioxide (Ilmenite and rutile) and Zircon. Paint and coatings account for half of all pigment consumption while the plastics industry (the second largest market) accounts for just over a quarter of titanium dioxide consumption.
The remaining production is allocated evenly across coated paper, paper laminate, fiber and ink manufacturers. The other major use of titanium feedstock is the production of titanium metal which is used by the aircraft, space, defense, industrial, medical and sporting goods industries. Kenya represents about 0.08 per cent and 0.25 per cent of the global ilmenite and rutile market, respectively.
Base Titanium’s main competitors for supply of ilmenite and rutile in the domestic market are suppliers in Sri Lanka, India, Belgium and China who account for 65 per cent of the local sales.
Base Titanium accounts for the balance – 35 per cent. The domestic market accounts for less than 1 per cent of the target’s total sales.
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