Kenmare Resources lowers Moma ilmenite guidance after power grid outages

Kenmare Resources plc said that outages in the electricity transmission grid had resulted in lower guidance for ilmenite production at the Moma titanium minerals mine in northern Mozambique.

GUIDANCE

Moma contains deposits of heavy minerals which include the titanium minerals ilmenite and rutile, as well as the zirconium silicate mineral, zircon.

In its Q3 2022 production guidance, the company had said it expected production to be at or around the bottom of the 2022 guidance ranges.

“During October 2022, Kenmare achieved an annualised run rate of 1.2 million tonnes per annum of ilmenite production, in line with original guidance and driven by the company’s robust performance in Q3 2022,” said Kenmare in a statement.

“However, more recently, heavy mineral concentrate (HMC) production weakened due to unplanned power outages.”

Kenmare added that the lower end of the revised guidance was based on continued power disruptions until the end of the year.

Production guidance for primary zircon and concentrates is unchanged due to higher zircon content in the HMC mined and stronger recoveries.

The company is working with the state electricity provider, Electricidade de Moçambique, to identify and rectify the issues “as a matter of urgency”.

FINANCES

Kenmare anticipates Q4 2022 to be the strongest quarter of the year for shipments due to seasonally favourable weather conditions and unrestricted shipping capacity.

The company expects cash operating costs to be slightly above the top end of 2022 guidance ($190-210 million), because of increased fuel prices.

Its Q4 and full year 2022 production report, which will include 2023 guidance, is scheduled for publication in mid-January 2023.

Kenmare supplies customers operating in more than 15 countries, with Moma’s production accounting for some 8% of global titanium feedstocks.