Michael Carvill

KENMARE bought back $30m of its shares last year. The transaction, valued at £4.22 per share, was characterised as “a last chance” for returns of this ilk prior to reprioritising cash for Nataka, a $341m project to be spread over three years. Once completed, Nataka will enable Kenmare to sustain one million tons a year of ilmenite production at its northern Mozambique mine, Moma. Periodically, the firm relocates one of two enormous mobile concentrators over new pools of resource that it then dredges. Nataka’s time has come. According to Carvill, it will give Kenmare better production forecasting ability once complete.

A definitive feasibility study is due before end-June. Titanium minerals – ilmenite and zircon – are used in ceramics and paint pigments and rely heavily on the health of China’s economy. For the first half of 2023, demand was relatively good. Unfortunately, production from Moma was knocked by a lightning strike that Carvill described as the worst in over 15 years of operations, damaging electronic devices and power lines.

Then, for the second half of the year, Kenmare enjoyed decent production but sold minerals into a weaker market, thus proving that in mining you can’t have it all. Carvill expects a softening in ilmenite pricing for 2024 but it’s difficult to call China’s economic fortunes. Its emergence from an extended Covid lockdown regime was slower than anticipated last year amid a sluggish property demand. Shares in Kenmare have also been pedestrian. Carvill commented he would like to see an appropriate upward adjustment in Kenmare’s share price in recognition of the Nataka capital programme. It will be interesting to see what he makes of the firm’s share price in 2024.