Kenmare Resources lowers ilmenite production guidance

Titanium minerals and zircon producer Kenmare Resources, which operates the Moma Titanium Minerals Mine in northern Mozambique, announced on Monday that it no longer expected to achieve its full year 2019 production guidance of between 900,000 and 960,000 tonnes of ilmenite.

The London and Dublin-listed firm said 2019 ilmenite production was now expected to be up to 3% below the lower end of the guidance range, and added that guidance for all other products and shipping volumes remained unchanged.

It explained that, following the successful automation of WCP B’s dredge, the company was in the process of automating the first of the two dredges at WCP A, with the objective of increasing plant throughput and utilisation.

“Implementation of this project has been more challenging than expected, resulting in unplanned production downtime, and tipping the balance of Kenmare’s 2019 ilmenite production below 900,000 tonnes,” the board said.

“In recent weeks, the company has also experienced reduced power reliability, due to upgrade work being undertaken on the national power grid, contributing to decreased heavy mineral concentrate production during the fourth quarter of 2019.

“This upgrade work on the transmission grid is now complete.”

As a result, full-year 2019 ilmenite production guidance was being revised to between 870,000 and 900,000 tonnes.

Kenmare said that, while total cash operating cost guidance remained unchanged at between $151m and $167m, cash operating cost per tonne guidance was being revised to $160 and $165 per tonne from between $150 and $160 per tonne, due to reduced production volumes.

Full-year 2019 production guidance for Kenmare’s co-products was maintained at between 44,500 and 52,000 tonnes of primary zircon, 8,100 to 9,500 tonnes of rutile and 33,500 to 43,500 tonnes of concentrates.

“Kenmare also still expects total shipments in full-year 2019 to be above one million tonnes, due to strong inventory availability, and the company continues to experience tight market conditions and upward price momentum for titanium feedstocks,” the board added.

At 0952 GMT, shares in Kenmare Resources were down 2.28% in London at 214p.