Kenmare Resources lowers production targets after Covid delays

Kenmare Resources lowers production targets after Covid delays
Att: Business DeskPictured at signing of Moma loan agreement are from left, Mr. Tony McCluskey, Finance Director and Mr. Michael Carvill Managing Director Kenmare Resources Plc. Picture Colm Mahady/Fennells

Irish mining firm Kenmare Resources expects to produce 700,000-800,000 tonnes of ilmenite this year.

The target – which represents a partial reinstatement of performance guidance following a Covid-driven pause to forecasts – is down from the 800,000-900,000 tonne target before guidance was withdrawn. 

The drop in outlook is largely due to Covid restrictions delaying Kenmare’s movement of drilling operations to a new and potentially more lucrative portion of its Moma titanium mine in Mozambique.

Earlier this year Kenmare said its 2020 profits may be impacted by a Covid-led slowdown in industrial activity. However, it said with good liquidity levels it would be well-placed to survive most scenarios that could play out due to the virus.

The company’s current cash balances are $98.6m. This is despite it closing the first half of this year with net debt of nearly $53m, compared to net cash of nearly $14m at the end of 2019, the change being caused by spending related to its ongoing capital programme.

Kenmare managing director Michael Carvill said he expects mining to begin at the new area of Moma in the fourth quarter of this year.

He said while prices for ilmenite, the main product from Moma, increased for the fifth consecutive quarter in the second three months of the year, the market is expected to be more “subdued” in the remainder of the year, due to the Covid impact.

More in this section

Lunchtime News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up
Revoiced
Newsletter

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up