KENMARE Resources downgraded its ilmenite production forecast for this year owing to delays at a $341m project aimed at accessing a new section of the company’s Moma mine in Mozambique.
The UK-listed miner said in an update on Tuesday ilmenite production was now expected to be between 870,000 and 905,000 tons for this year. This compares to previous guidance of 930,000 to 1.05 million tons of the material.
Ilmenite is used to make paint pigments. Another mineral recovered at Moma is zircon. Used in the ceramics industry, zircon production from Moma would be unaffected by the project delays. But production of a third mineral, rutile, will be lower.
Despite the delays, the overall project capital is unaltered. However, the phasing of capital will change with more capital to be spent this year than budgeted.
The commissioning problems relate to the upgrade of one of Kenmare’s concentrators, known as Wet Concentrator Plant A (WCP A), and the installation of two new dredges, used to recover the minerals from ‘ponds’ at Moma. Kenmare said there were also delays with the upgrade of a tailings management component at the plant.
“While overall progress is positive, some elements of the commissioning process have taken longer than anticipated, which has impacted production,” said Ben Baxter, COO of Kenmare in a statement. “This change in production is not anticipated to affect sales in 2025,” he added.
The fourth quarter was “typically a strong period for shipments”, said Baxter. Kenmare will also continue to supply the market through a combination of existing production and stockpiles, both for this year and into 2026 as the WCP A is installed – a process that is expected to take 18 months.
The project, which began in October, is to move the WCP A to Nataka, a section of the Moma mine that comprises about 70% of total reserves and is expected to prolong mining at the site for about 20 years.
Kenmare has had a tough year. It is still to finalise an Implementation Agreement with the Mozambican government. The agreement, which governs mineral processing and exports at Moma (not production), expired in December 2024. The Government of Mozambique extended the licence pending an extension, but Kenmare CEO Tom Hickey said in October the company was “reserving the right to safeguard its contractual entitlements, up to and including arbitration, if an agreement cannot be reached”.
Earlier in the month, Kenmare said a police officer was killed at Moma in an event related to the theft of electrical cables.
The company also turned down a takeover proposal. In June, a consortium led by Oryx Global Partners that also included former MD and founder Michael Carvill said it had ended negotiations after its second offer (lower than the first) was turned down by the company.
Shares in Kenmare are down nearly 18% this year. There was downward pressure on the share today – 5% lower at the time of writing – following the production guidance change.
