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Kenmare says poor sea conditions hit shipments

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Operations: Kenmare Resources staff in Mozambique

Operations: Kenmare Resources staff in Mozambique

Operations: Kenmare Resources staff in Mozambique

Kenmare Resources said that mineral shipments from its Mozambique mine by fell 14pc in the first half of this year when compared with the same period in 2019 due to poor sea conditions.

The Dublin-listed company said in a trading update yesterday expects that it expected shipping volumes to increase in the second half of the year, although it warned that a key project faced higher costs due to Covid-19.

Kenmare operates the Moma Titanium Minerals Mine on the north east coast of Mozambique which produces titanium minerals, used in the production of paints, paper and plastics, and zircon which is used in ceramics.

The company said in its statement that output of heavy mineral concentrate (HMC) fell by 12pc year-on-year to 558,400 tonnes in the first half of 2020.

Production of ilmenite was 368,900 tonnes, down 19pc.

Kenmare said that it expected to produce 700,000 to 800,000 tonnes of ilmenite this year and added that the market for the mineral "remained strong".

Meanwhile, Kenmare said the relocation of its Wet Concentrator Plant (WCP) B, its third development project, has been hit by global restrictions relating to Covid-19.

It continues to target the move of WCP B to Pilivili over the next couple of months, with mining starting later this year.

The company said however that initiatives needed to mitigate the impacts of Covid-19-related delays are anticipated to increase overall project costs by approximately 10pc.

As of June 30, Kenmare had cash and cash equivalents of $98.6m (€87m), its debt was $52.7m, up from $13.7m (€12m) net cash at December 31 mainly due to scheduled capital expenditure.

"While our fiscal outcome for the year is under review given the now lower production expectation, operations continue to perform well, its markets have held up and the group remains in a strong financial position," Davy said in a note.

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