KENMARE Resources said the outlook for titanium minerals and zircon was “buoyant” as the pricing momentum of 2021 had continued into the first quarter.
Demand for ilmenite produced by Kenmare, which is used in the manufacture of paint pigments, exceeded its ability to supply resulting in a fourth quarter price increase of 14%. Strong demand was expected to continue even after pigment production summited record highs last year, the company said.
The company operates the Moma mine located in northern Mozambique.
“In 2021 we received higher average prices for all products compared to 2020 and the outlook for 2022 remains buoyant,” said Michael Carvill, MD of Kenmare Resources. He was commenting in fourth quarter production and guidance report for 2022.
“We were delighted to return almost $100m to shareholders during the year, through dividend payments and a share buy-back, and we continue to target a 25% profit after tax total dividend payment in respect of 2021,” he said.
Kenmare has guided to ilmenite production of between 1.16 million tons (Mt) to 1.2Mt for 2022. Ilmenite production last year was 1.13Mt. In addition to ilmenite, Kenmare also produces zircon, the production of which has been guided to between 54,400 and 63,200 tons compared to 56,300 tons last year.
The increase in production was due primarily to higher tons mined which would more than offset a lower anticipated grade of 4.2%. The increase in tons mined, coupled with inflation, would lead to an increase in operating costs. Operating costs for the 2021 financial year would be 3% above the upper end of guidance, the company said.
This was owing to higher repairs and maintenance costs, heavy mineral concentrate haulage costs and increased costs relating to Covid-19. Kenmare is due to report its full year end results on March 23.