NEWLY appointed MD Tom Hickey says his top priority at Kenmare Resources will be to deliver the company’s transition of operations to the Nataka deposit at the Moma mine in Mozambique at a capital cost of $341m.
Hickey has just taken over from Kenmare founder Michael Carvill who has run the group for nearly 40 years including some 20 years of operation in Mozambique.
The Moma mine is one of the largest producers of heavy mineral sands products in the world accounting for about 7% of global titanium feedstocks and the move to the Nataka deposit which is the largest ore zone in Kenmare’s portfolio will “secure production from Moma for decades to come.”
Kenmare produced 659,000 tons of heavy mineral concentrate in the six months to end-June (six months to end-June 2023 – 633,900t) but revenue dropped 32% to $165.1m ($242.9m) because of lower shipments, pricing and product mix.
Despite this the EBITDA (earnings before interest, tax, depreciation and amortisation) margin was maintained at 41% and net cash stood at a record $58.9m at end-June despite paying $34.7m in dividends and investing $49.1m in capital expenditure.
The Moma mine ships its production from its own jetty and the product is then trans-shipped onto bulk carriers offshore. Total shipments in the first half of 2024 were down 14% at 477,600t because of poor weather conditions and additional operational maintenance which limited shipping time.
Hickey said shipments were expected to increase in the second half of 2024 with two zircon shipments delayed from the second quarter already dispatched early in the third quarter.
He added Kenmare was on track to achieve 2024 guidance on all stated metrics including ilmenite production of between 950,000t to 1.05mt with second half production estimates being supported by higher forecast grades.
The move into the Nataka region requires an upgrading of Wet Concentrator Plant A and the introduction of two new higher capacity dredges currently being manufactured in the Netherlands. A tailings storage facility will also be built.
Hickey said 54% of the capital for Nataka had been committed as of June 30 and 75% of the total was expected to be committed by end-December.
He commented: “My focus for the next few years is very much to deliver the move of the mining operations into Nataka. After that we might lift our heads, cast the net a bit wider and think about growth.
“We have additional reserves about 90kms north of Moma and based on some preliminary estimates these could add another 300,000t annually to what we do.”
