SPOT prices for ilmenite “increased strongly” in the fourth quarter which boded well for improved capital returns, said Michael Carvill, CEO of Kenmare Resources.
In August last year, Kenmare announced a maiden dividend which it followed up with an interim dividend payment of $2.31 cents per share this August.
Commenting in a progress report regarding the relocation of processing equipment at its Mozambique mine, Carvill said: “It’s been encouraging to see that spot prices for ilmenite, our primary product, have increased strongly in Q4, after a marginal softening in Q3.
“Higher production and lower unit costs, coupled with a robust commodity market, will help to support higher capital returns for shareholders from 2021”.
Kenmare recently moved its Wet Concentrator Plant B (WCP) some 23 kilometres from the mined out Namalope section of its Moma resource in northern Mozambique to the new site at Pilivili. The relocation would result in an estimated a capital cost overrun of about 17% compared to a previous forecast of a 10% overrun of the $106m project.
But the short-term pain is intended to result in long-term benefit. Once the expansion is complete, Kenmare will have an annual run-rate of 1.2 million tons in ilmenite output which compares to last year’s production of 892,000 tons.
Heavy minerals such as ilmenite are used in the manufacture of paint and pigments along with a host of other industrial uses.
“The ramp-up of WCP B is progressing well, having been operating for more than a month, and production is in line with expectations,” said Carvill today.
Kenmare reported third quarter production totalled 167,900 tons, down 27% year-on-year owing to less heavy minerals production stemming from the WCP B relocation.
