Kenmare titanium mine hit by strike

PRODUCTION has been temporarily suspended at Kenmare Resources’ Moma titanium mine in Mozambique after employees went on strike over wage demands.

The Dublin-headquartered company told the Irish Stock Exchange that the strike action was unofficial and had been called by a group of employees during annual wage negotiations between the company’s management and the employees’ union.

“Kenmare, employee representatives and officials from the Ministry of Mines and the Ministry of Labour are now working towards an early resolution of the issues,” the company said.

Market reaction to the news was guarded, given that an early resolution is being targeted.

“The news is clearly unwelcome, although the action is just one day old and an early resolution is hoped for. The immediate impact is on lost production,” said Job Langbroek of Davy Stockbrokers.

“The action is completely unofficial and sudden in its nature and, as yet, the demands are unclear. It is the first instance of industrial unrest at the mine, and there is no history of industrial action in the area (albeit there has been no prior industrial activity).”

Last week, Kenmare reported a near halving of full year pre-tax losses, for 2010 (down from $30.4m — €25.6m — to $16.3m) with management forecasting a “very positive” outcome for the current year; with production up and the mine operating well.

Kenmare’s share price was down by more than 3.2%, yesterday, at 51c.