Kenmare shares jump 12pc as it predicts price increase
Kenmare Resources' share price has jumped after the mining company said prices on its core product ilmenite are likely to rise.
Management at Kenmare said they expect customers to pay more for the ilmenite it mines when it negotiates prices for the second half of the year.
"We're at the bottom at the moment," said managing director Michael Carvill. "The circumstances are such that prices should go up."
Shares in the company rose by as much as 12pc yesterday morning.
Prices for ilmenite, used as a pigment in paint, have collapsed as customers built up inventories. Prices of $250 (€180) and $300 a metric ton needed to sustain the industry won't be achieved this year, Mr Carvill said. Kenmare was selling ilmenite for $185 to $200 a ton in the first half, he said.
In an interim management statement released yesterday morning, Kenmare also revealed that major expansion works at its Moma titanium mine in Mozambique are starting to pay off; the company saw a significant increase in mining and production in the first quarter of the year.
The total amount of ore mined in the first quarter rose 81pc to 7.5m tonnes.
Addressing ongoing concerns about vulnerabilities in the supply of electricity to the Moma mine, Kenmare said it had signed contracts for the rental of an on-site diesel-powered electricity generation plant, expected to be operational in the second half of this year, which will "significantly increase security of power supply".
The company has had difficulty getting power at the mine due to weaknesses in Mozambique's electricity infrastructure.
(Additional reporting by Bloomberg)