KENMARE Resources announced on Wednesday it would book an impairment of no more than $125m on its first half accounts as it expected long-term prices for its minerals to be “slightly lower” than forecast.
The UK-listed firm operates the Moma mine in northern Mozambique which produces titanium feedstocks ilmenite – used primarily in the paint pigment industry – and rutile. It also mines zircon which is consumed by the ceramics industry. The Moma mine also produces titanium metal which comprises a fifth of total sales whereas ilmenite, rutile and zircon are collectively known as heavy mineral concentrates (HMC).
Commenting in its second quarter and interim report for the 2025 financial year, the company said trading conditions had been affected by increased supply of HMC from Africa including Mozambique, Sierra Leone and Nigeria by Chinese producers. Combined with increased ilmenite production within China has resulted in market oversupply.
Rutile and lower-quality ilmenite producers have been most impacted by this oversupply, with some producers likely to be operating at or near marginal cost, the company said.
Tom Hickey, MD of Kenmare said the demand for the company’s products was strong. This was partly owing to increased plant utilisation among Western pigment producers following anti-dumping duties on Chinese producers. “However, uncertainty regarding market conditions in the medium term has led us to slightly lower our long-term pricing assumptions,” he said in the update today.
Zircon, which has been under pressure for most of this year, was further pressurised with an increase in concentrate supply, especially in the lower end of the market. Hickey said Kenmare’s high grade zircon gave the company a marketing advantage. “The company continues to experience consistent demand for zircon, exceeding its ability to supply,” Hickey said in commentary to the update.
The West is participating in an increasingly fierce trade battle with China for a foothold in the global minerals supply chain which China dominates, especially in specialist critical minerals. Mick Davis, CEO of Vision Blue which invests in critical minerals such as graphite, told a conference in Washington in April the West had been “asleep at the wheel”.
Kenmare said it was continuing discussions with the Mozambique government regarding renewal of an implementation agreement which expired on December 21. The implementation agreement is not a mining licence but regulation affecting Kenmare’s mineral processing and export activities.
Hickey met with Mozambique president Daniel Chapo in June but there is yet to be any signal from the Mozambicans as to when the extended agreement will be fully renewed.
“The company continues to engage constructively with the Government of Mozambique, while reserving the right to safeguard its contractual entitlements, if an agreement cannot be reached,” Kenmare said in its update.
