Kenmare Resources keeps head above water amid tight markets
Titanium minerals and zircon producer Kenmare Resources, which operates the Moma Titanium Minerals Mine in northern Mozambique, reported a 9% increase in heavy mineral concentrate production to 304,100 tonnes year-on-year for its third quarter on Wednesday, as a result of a 10% increase in tonnes of excavated ore.
The London-listed firm said its lost time injury frequency rate was 0.20 per 200,000 man-hours worked for the 12 months ended 30 September, down from 0.29 a year earlier.
Ore grades for the three month period through September were said to be in line with the third quarter of 2018 at 3.63%, but represented an increase of 18% compared to the second quarter of 2019 at 3.07%, which was expected.
Ilmenite production totalled 230,800 tonnes, which was in line with the same period a year earlier.
Kenmare reported a 27% increase in primary zircon production to 12,900 tonnes, and a 26% increase in rutile production to 2,100 tonnes, primarily due to spillage retreatment during the quarter.
It also reported a 78% increase in concentrates production to 10,700 tonnes, which benefited from the introduction of a mineral sands concentrate product.
There was a 3% decrease in total shipments of finished products to 192,900 tonnes, with the board saying 2019 total shipment volumes were expected to be in excess of one million tonnes.
The wet concentrator plant C development project remained on track to begin commissioning in the fourth quarter, the directors added.
Ilmenite market conditions remained tight in the third quarter, with higher prices achieved than in the second quarter and further spot price increases agreed with customers for the fourth quarter.
Zircon prices weakened in the period, due to slower global growth concerns, however long-term fundamentals remained “strong” due to supply constraints, despite short-term oversupply, the board explained.
“Production and operating costs continued to track well against our guidance in the third quarter and we remain in line on both metrics,” said managing director Michael Carvill.
“With the dredge and major components of the wet concentrator plant for the WCP C development now on site, our growth projects to deliver 1.2 million tonnes per annum of ilmenite continue to advance.
“We are on track to commence commissioning of WCP C later this year.”
Carvill said the ilmenite market remained tight in the quarter, with strong demand for ilmenite suitable for upgrading to slag driving higher prices, despite softer pigment market conditions.
“We have secured higher prices for ilmenite spot shipments in the fourth quarter.
“Although the zircon market has experienced some weakness in 2019, we believe the fundamentals for all of our products remain positive due to emerging supply constraints.
“We are delighted to be paying our maiden dividend on 25 October 2019, delivering on our strategy to provide shareholder returns, in addition to growth and margin expansion.”