Kenmare Resources ‘not worried’ by Mozambique move

MINING company Kenmare Resources has said that it doesn’t anticipate its operations in Mozambique to be adversely affected by government plans to revise that country’s mining laws.

Dublin-based Kenmare’s chief asset is the Moma titanium mine, located on the Mozambique coast. The country’s government is looking to revise its mining laws, so that the state will receive a stake in strategic areas such as coal.

Speaking to the international media, yesterday, Kenmare’s managing director, Michael Carvill, said the company didn’t think the plans formed any radical re-think from what had already been understood and sees them as being “an appropriate change” in legislation. He added that the proposed amendments to legislation shouldn’t be retrospective, thus not affecting Kenmare’s operations.

Kenmare’s share price dipped alarmingly — by around 11% — on Wednesday, on the back of initial reports of the Mozambique government’s plans. This was the sharpest decline seen in the stock price for nine months, but the price began to recover yesterday.

In a research note, published yesterday, Davy Stockbrokers largely agreed with Kenmare’s view, adding that the negative share movement on Wednesday was something of an over-reaction.

“Mozambique has played a very steady hand over the last decade and succeeded in attracting considerable inward investment, and we find it hard to understand why this would be jeopardised. We suspect an equally considered reading of the actual statement by the minister will suggest that market moves were an over-reaction,” said Davy’s Job Langbroek.

Elsewhere, ISEQ-quoted Dragon Oil said that its sixth development well in its current drilling campaign in Turkmenistan has flowed at an initial rate of 1,767 barrels of oil per day (bopd).