Business Irish

Thursday 8 December 2016

Kenmare hits two-week low as strike halts production

Thomas Biesheuvel

Published 28/04/2011 | 05:00

Kenmare Resources Plc fell to a two-week low in London trading after a strike forced the company to suspend output at its Moma mine in Mozambique. Kenmare dropped 0.8 pence, or 1.7pc, to 46.2 pence by 4:30pm yesterday, the lowest closing price since April 7. The stock earlier slumped as much as 6.8pc.

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"Annual wage negotiations between Kenmare and the employees' union had been progressing when an unofficial strike was called by a group of employees," Dublin-based Kenmare said in a statement.

Impact

"Kenmare, employee representatives and officials from the Ministry of Mines and the Ministry of Labour are now working towards an early resolution of the issues." The stoppage marks a further setback at the Moma project after a pond at the mine in northern Mozambique breached a retaining wall last October, sending water, sand and clay flowing through part of a nearby village.

"The news is clearly unwelcome," Job Langbroek, a Davy's analyst said.

"The immediate impact is on lost production," with the mine's ilmenite output at 2,000 to 2,300 metric tonnes a day, zircon at 120 to 140 tonnes and rutile at as much as 35 tonnes, Langbroek said. (Bloomberg)

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