Kenmare confident despite global uncertainty

Kenmare Resources managing director Michael Carvill expects production levels this year to exceed 2021's record output.

Irish mining firm Kenmare Resources has said momentum from a record year of production and financial growth has continued into the early part of 2022, but it remains too early to know how the economic impact from the war in Ukraine may affect its operations.

Kenmare is one of the world’s largest suppliers of titanium minerals, which it mines from its Moma mine in Mozambique. 

Ukraine is also a huge supplier of titanium feedstocks - which ultimately go into the making of everything from paper and packaging to paints and carpets - but war stopping mining in the country is not being seen as an opportunity by Kenmare.

"The tragic conflict in Ukraine has created significant uncertainties in global trade routes and the wider economy. It is too soon to speculate on the overall effects on our business, but Ukraine is a significant supplier of titanium feedstocks, while lower global growth could reduce demand for our products," the company said.

Economic chaos

Kenmare’s managing director Michael Carvill said harmonious societies prospering and buying more end product is good for the company, while disruption, war, and economic chaos is not good for Kenmare.

Kenmare’s latest results show the Dublin-headquartered company generated revenues of $455.9m (€414m) last year; 87% more than in 2020. Pre-tax profits jumped from $22.7m to $137.3m.

Kenmare achieved record production levels, with 1.5 million tonnes of heavy mineral concentrate produced, 30% up on the previous year. Mr Carvill said, despite a weather-impacted first quarter of this year, 2022 targets remain in focus and production should still see a slight increase this year.

Mr Carvill said 2021 was a record year for Kenmare on all fronts. 

"Our financial results were driven by record production volumes and higher average prices received for our products...Production in the first quarter of 2022 has been impacted by poor weather conditions but we remain on track to achieve our 2022 guidance," he said.

The positive momentum we saw in all our product markets in 2021 has continued into 2022. Global demand for ilmenite, our primary product, continues to exceed supply and our production volumes are being well received by the market.

Kenmare, which returned nearly $82m to investors via a share buyback last year, has recommended a 32.71(US)c per share dividend for last year.

Mr Carvill said Kenmare's board is conscious of being a single-asset company, but hasn't identified any new assets that would complement its investment at Moma.