Kenmare Resources, a leading global producer of titanium minerals and zircon, announced on Wednesday that the hunt for a successor to its long-standing managing director, Michael Carvill, is soon to end, with a decision expected prior to the presentation of its mid-year financial outcomes in a month’s time. Operating from its Moma mine in Mozambique, the Dublin-based firm outlined a robust increase in production during Q2 of 2024 but also reported a declined shipment rate by 18% year-on-year to 234,700 tonnes, a result of adverse weather conditions and functional complications at its shipping amenities.
The mine saw a production surge in ilmenite, a commodity used widely in the manufacturing of diverse products from textiles and ceramics to paints and plastics, by 8% to 238,600 tonnes. There was also a 12% increase in the production of primary zircon, a critical element in the foundry industry, reaching 13,000 tonnes.
The quarter witnessed buoyant demand for all Kenmare products, particularly ilmenite. Despite the market prices for ilmenite remaining relatively stable over H1, the second quarter saw a small drop in the average price Kenmare received compared to the first quarter.
However, meeting the firm’s expectations, the prices for H1 were above estimates. Kenmare saw a boost in the demand for its ilmenite, stimulated by an increase in operation rates among European and American pigment manufacturers to meet the stronger demand, and replenishment of titanium feedstocks. The possibility of potential tariffs on Chinese pigments entering the European Union further reinforced demand and prices for European pigment.
The current global supply of titanium feedstocks is adequate to meet the demand, with African supplies being shipped by Chinese manufacturers to China for processing. But over the past year, Kenmare share prices have seen a plunge of almost 27% to €3.82. In light of the ongoing underwhelming share price, which contrasts with the current average price target of €6.67 maintained by analysts, UK investor JO Hambro has prompted the company to consider a sale, a suggestion Kenmare has so far declined.
The organisation is presently committed to a key upgrade project of its primary mining facility, intending to relocate it to a different site in Moma. The projected expenditure for this is estimated to be $341 million by 2027. However, the company asserts that this investment will ensure the sustainability of their production for numerous future decades. Based on the present rate of production, Moma mine’s lifespan is projected to be a century from now.
In 1986, Mr Carvill established the company and disclosed this March his intentions to vacate his position by August. Nevertheless, he has pledged availability in a consulting role at least till year end, to facilitate a smooth leadership transition.