Kenmare agm: promising news from Mozambique:KENMARE RESOURCES expects its titanium mine in Mozambique to begin full production in November after making progress in dealing with problems that have delayed the project.
The Dublin- and London-listed company told shareholders yesterday that a programme to deal with problems with plant and equipment and other issues was 90 per cent complete, and should be finished next month or in August.
Managing director Michael Carvil confirmed after Kenmare’s agm in Dublin yesterday that the mine at Moma in Mozambique, Africa, should reach full production by November.
Last month Moma produced 40,000 tonnes of ilmenite, a mineral from which titanium is extracted, and quantities of other ores which the mine produces.
In a statement, Kenmare said this level of production meant that it had “more than crossed the cash operating breakeven point”.
From next month the company’s accounts will include operating costs. Up to this point it has been capitalising those figures.
Responding to questions from shareholders, finance officer Tony McCluskey said Kenmare expected the value of this year’s sales to be between $50 million and $60 million, while costs would be “close to $50 million”.
At current production rates Kenmare is extracting the equivalent of 800,000 tonnes of ore from Moma. At full production that should come to 1.2 million tonnes.
Also in response to questions from a shareholder, Mr Carvill said it emerged that the plant and equipment which caused the difficulties were not “fit for purpose” and conceded that this fact could have been better communicated to shareholders.
The difficulties frustrated Kenmare’s efforts to get the Moma mine to full production by the original deadline last year. The problems led to the company renegotiating the terms of its loans with its bankers.
Kenmare is looking at the scope for expanding its operations in Moma. The current mine has 25 years’ worth of ore, while another nearby, which is also covered by its licence, has 100 years.
Mr Carvill said yesterday that the company hoped to move on to planning for expansion within a short period of time.
Kenmare also announced yesterday that it had co-opted its recently-appointed chief operations officer, Jacob Deysel, on to the board.
He joined in February from Richards Bay Minerals, which is the world’s biggest single producer of titanium, and has responsibility for bringing the mine to full production.
Titanium is used in paints, pigments and cement, and its alloys are used in components for military and civil aircraft, ships and a range of industrial equipment.
