Kenmare Resources first-half profits reach €3m

KENMARE Resources made a profit of $3.7 million (€3m) in its first half-year arising from foreign exchange gains on Euro debt and deposit interest.

In the six months to June 30 2005, investment at Moma, its mine development in Ghana, increased by $84,411,649 to $220,056,203 while borrowing increased $64,548,488 to $119,522,623.

Its cash and bank balances at June 30 stood at $80,527,088.

Implementation of Kenmare’s Moma Titanium Minerals Project in Mozambique is continuing on schedule with 41% completion already achieved. Commissioning of the plant is on track for the fourth quarter of 2006.

In its statement the group said the market outlook for titanium minerals continues to be positive, driven by strong pigment demand, most notably in China.

Industry analysts forecast tightness in the ilmenite market to continue for the coming years. This has led to a firming of prices, which is set to continue as limited new supplies are to enter the market and Moma is well placed to capitalise on the positive demand outlook.

Negotiations are ongoing with a number of customers for the balance of Moma’s ilmenite production. Demand for zircon continues to be very strong and prices have increased to circa $700 per metric tonne for premium grade. The outlook is for zircon supply to remain tight for the foreseeable future.

Kenmare has contracted a significant titanium dioxide (TiO2) pigments are white inorganic pigments used primarily in the production of paints, printing inks, paper and plastic products. TiO2 is also used in many white or coloured products including foods, cosmetics, UV skin protection products, ceramics, fibres, rubber products and more.

Kenmare’s investment is the biggest ever project undertaken by an independent mining company in Africa.

The deal involved $269m loan agreement and a $97m equity investment to see the project through to production.

Lenders include the African Development Bank, ABSA, the European Investment Bank and FMO of Holland.