Kenmare hits two-week low as strike halts production
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.
"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.
"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)