Kenmare Resources sees profits rise in ‘record year’

Michael Carvill, managing director of Kenmare Resources

Caoimhe Gordon

Irish mining company Kenmare Resources recorded a rise in profits and revenues last year in a “record year.”

The company operates one of the world’s largest ilmenite mines, Moma, in Mozambique.

Mineral product revenues rose by 18pc to $498.4m (€462.6m) last year, a growth attributed to a 42pc increase in prices over the year.

Earnings before interest, taxes, depreciation and amortisation (Ebitda) rose by 39pc to $298m (€276.8m) last year.

Heavy mineral concentrate production rose by 2pc at the mine due to an increase in volumes of excavated ore mined.

Ilmenitre production decreased by 3pc in the same period to around 1.09 million tonnes, while shipments of finished products last year fell 16pc compared to 2021 due to four months of maintenance on a transshipment vessel.

After processing, ilmenite has a number of applications, ranging from paint and paper production, to the manufacture of titanium.

Titanium oxide pigment consumption correlates closely to global GDP growth. Following sharp rises last year, Kenmare now expects prices to stabilise in 2023 as inflation slows following interest rate hikes.

“We see a year of relatively stable but slightly subdued pricing compared to last year,” managing director Michael Carvill said.

He pointed to strong volume demand in its existing markets.

"We believe that we will sell some of the inventory we built up last year when we didn’t have our whole complement of transshipment vessels,” he added. “We don't expect prices to surge back up again.”

China, the United States and Europe are “relatively evenly balanced” markets for the company, with China taking a slight lead in recent months.

The company will also place its focus on moving one of its wet concentrator plants to a new mineral zone located around 15km away from its current base in Mozambique this year.

A lightning strike at the mine last month impacted production at the site for an “extended period” but the company expects this will not hinder performance for the year.

This incident required the company to use all its spare electrical control systems and variable speed drives required for mining and purchased equipment from other markets, including South Africa.

"We are running successfully but on scarce spares. So there’s slightly heightened risk,” he said, adding that Kenmare has increased orders with all global manufacturers of this necessary equipment.