www.kenmareresources.com
Kenmare Resources plc is quoted on the official lists of the Irish and London Stock Exchanges. The principal activities of the Group are the exploration for commercial deposits of natural resources and the development and operation of mines. Kenmare Resources main asset is the Moma Titanium Minerals Mine, located on the coast of Mozambique. The Moma Mine contains reserves of heavy minerals which include the titanium minerals ilmenite and rutile, as well as the high-value zircon mineral.
Kenmare Resources turns the titanium corner
With operations at one of the world's largest mineral sands deposits now online and contributing to earnings, London and Dublin main board quoted Kenmare Resources reckons it has now fully recovered from the start-up problems which had plagued it and delayed the onset of commercial production.
Speaking at a Proactive Investors/Mineweb One2One Forum in London yesterday evening, company CEO Michael Carvill, who broke off from a holiday to participate, expressed considerable confidence in the project and that the company's trials and tribulations over construction and equipment failures at its big Moma titanium rich mineral sands deposit in Mozambique are now over. The current two-dredge operation is ramping up to full production, which should be achieved by the year-end and July marked the point where the company achieved the transition from developer to operator.
The Moma mineral sands deposit is situated virtually on the coast in northern Mozambique and has sufficient reserves of mineral sands containing ilmenite, rutile and zircon to last for over 100 years of mining. The first section to be mined - the Namalope orebody - has reserves now estimated at 26 million tonnes - sufficient for 25 years mining at the current rate, while the subsequently discovered Nataka deposit, located close by on the other side of the operation's process plant has a resource estimated as sufficient for over 100 years of mining. Overall the resource is estimated as containing some 160 million tonnes of ilmenite.
Initial problems at the big operation revolved around construction at the mine site, the breakdown and slow replacement of both dredge pump motors and then problems caused by Cyclone Jokwe, all of which conspired to affect operations in 2008. Indeed the delays necessitated the deferment of 2009 capital repayments and the fact that this deferment was able to be negotiated at the nadir of the market collapse last year does give some indication of long term confidence by the lenders in the project.
At full output, Moma will produce 800,000 tonnes a year of ilmenite, 47,000 tonnes a year of zircon, and 18,000 tonnes a year of rutile. The concentrated product is loaded onto ocean going bulk carriers offshore from the company's own jetty immediately adjacent to the mine site so there are no major long distance logistical problems from mine to port.
The Moma production is sufficient for about 7% of world supply according to Carvill, but it is unlikely that once things really get under way that with the size of deposit that Kenmare will not substantially expand production further.
Carvill pointed out also that at a total capital cost of ca $500 million, the Moma development has been achieved at around half the cost of the similarly sized Rio Tinto mineral sands development in Madagascar, which is still a year away from completion.
Cheap power at Moma from hydro-electric capacity means that mining costs will be at the bottom end of the cost quartile, and with virtually all-new highly experienced operating management in place, Carvill reckons the problems which have beset the company are behind it. Now the company will need to show good operating results, in a difficult market, to prove itself, but the portents are good if, indeed, the teething problems are behind it.
