Titanium mine financing nears completion

KENMARE Resources has moved a step closer to completing the financing of its mineral mine in Mozambique.

Shareholders in the company yesterday agreed to stump up $18.7 million (€15m) in a rights issue to help fund the $348 million titanium Moma mine in south-east Africa.

The company’s managing director Michael Carvill said he was delighted with the response of shareholders to the offer. He had expected to get just half of the amount.

He added that financing for the project was “95% complete” and he expected the rest, around $18m, to be finalised over the next few weeks.

Mr Carvill said one of the investors who was providing debt finance for the project was looking to get in on the equity side of the deal.

Once the finance is all in place the company said construction of the facility will begin as soon aspossible.

Of the total cost of the project, $269 is in the form of loans from a group of banks including the European Investment Bank, the African development bank, ABSA, a South African commercial bank, a Dutch development finance institution, and German outfit KfW Bankengruppe.

The Moma mine is expected to turn over around $90 million a year and the company has already signed sales agreements for 57% of annual output when production begins sometime in 2006.

Mr Carvill added yesterday that demand for titanium was, according to industry forecasts, set to grow by up to 9%. This compares to 2.5% last year with demand very strong from the surging economies of China and India.

Shares in Kenmare were down 1 cent on the Irish stock market at 24 cents. The company is valued at €103 million.