London-listed Kenmare Resources has reported that it has achieved its revised 2025 production guidance for ilmenite and rutile at its Moma titanium minerals mine, in northern Mozambique, and has also achieved and exceeded its original guidance for primary zircon and concentrates, respectively.

In its fourth quarter production report, the company reports heavy mineral concentrate (HMC) production of 1.23-million tonnes in 2025, down 15% year-on-year, primarily owing to lower excavated ore volumes relating to upgrade work on the company’s wet concentrator plant (WCP) A.

Ore grades were down 3% year-on-year, with higher grades mined at WCP B in Pilivili partially offset by WCP A approaching the end of its mine path in Namalope.

Encouragingly, Kenmare says, the selective mining operation (SMO) met its expected production rate of 50 000 t in 2025, benefitting from a strong fourth-quarter performance.

Kenmare notes that total production of finished products was one-million tonnes, down 10% year-on-year, impacted by a 16% decrease in HMC processed.

Ilmenite production was 842 300 t in 2025, down 17% year-on-year, broadly in line with the reduction in HMC processed.

Primary zircon production was 50 000 t, down only 1% year-on-year, with the lower HMC processed largely offset by the decision to reprocess intermediate stockpiles and attain higher recoveries.

Rutile production was 8 600 t, down 12% year-on-year, with the lower HMC processed also partially offset by reprocessing of intermediate stockpiles.

Additionally, Kenmare notes that concentrates production was 103 100 t, including 59 960 t of zirconium/titanium in 2025, up 124% year-on-year, benefitting from the incorporation of zirconium/titanium in production metrics.

Total shipments in 2025 were 947 900 t, down 13% year-on-year, owing primarily to poor weather conditions in the first half of the year and the Peg transshipment vessel going into its five-yearly dry dock for maintenance work between June and September.

Although shipment volumes in the first half of the year were slightly stronger than in the second half, the company explains that the product mix was higher value in the second half of the year, as expected, with 35 500 t of primary zircon shipped in the second half and 10 600 t of rutile.

Kenmare says it also shipped 23 900 t of zirconium/titanium in 2025, which is included in concentrates production, and has identified significant ongoing demand for this product.

Shipments during the year comprised 820 600 t of ilmenite, 50 200 t of primary zircon, 10 600 t of rutile and 66 600 t of concentrates.

Closing stock of HMC at the end of 2025 was 29 200 t, compared with 14 100 t at the start of the year, while closing stock of finished products at the end of 2025 was 344 000 t, compared with 287 200 t at the end of 2024.

This includes about 30 000 t of ilmenite partially loaded at year-end.

Kenmare says it had higher than usual levels of finished product stock at year-end and shipments are expected to materially exceed production this year, driving a significant reduction in finished product inventories.

“Demand for Kenmare’s products remained stable in 2025 and we have a strong order book for the first quarter of this year. However, continued uncertainty regarding market conditions in the medium term has led us to further reduce our pricing assumptions.

“Consequently, we expect to recognise an impairment charge on our assets in 2025 that is not anticipated to exceed $300-million for the year, inclusive of the impairment loss recorded at half-year.

“This will be a non-cash charge with no anticipated impact on our operations, projects or financing facilities or the company’s ability to pay dividends,” says Kenmare MD Tom Hickey.

CAPITAL PROJECTS UPDATE

Meanwhile, Kenmare says it has completed all major construction and installation work associated with the upgrade of its largest mining plant, WCP A, ahead of its transition to the Nataka orezone.

The company notes that it is now in the final stages of the commissioning and ramp-up process.

Kenmare says WCP A’s transition to Nataka is essential to securing Kenmare’s production for decades to come. WCP A will mine in Nataka for the remainder of its economic life, which is expected to exceed 20 years.

The capital cost estimate for the WCP A upgrade, transition to Nataka and associated infrastructure remains unchanged at $341-million, with unallocated contingency remaining within that figure.

Kenmare says project capital spend in 2025 was about $156-million, with an additional $12-million incurred that will be paid this year.

At year-end, about $280-million of the project capital for the WCP A upgrade had been incurred, representing approximately 82% of the estimated total spend, in line with expectations.

The company says capital expenditure (capex) on the WCP A project is scheduled to reduce significantly from 2026 onwards, with about $30-million expected to be spent in 2026 – including the $12-million mentioned above.

The remaining circa $40-million of project capital largely relates to infrastructure within the Nataka area and is planned to be invested between 2027 and 2032.

While overall progress on the commissioning of WCP A in the fourth quarter of 2025 was positive, the company explains that some elements of the commissioning process have taken longer than anticipated, which impacted 2025 production.

However, Kenmare says the ramp-up of WCP A is continuing and remedial measures implemented in the fourth quarter are working well.

As the commissioning process has progressed, additional bottlenecks have been identified, and the company says it is undertaking a range of low-cost rectification measures in the first quarter to achieve a sustainable nameplate capacity of 3 500 t an hour.

The company assures that the extended ramp-up of WCP A is not expected to impact this year’s ilmenite sales owing to Kenmare’s relatively high product inventories.

Hickey says the company continues to target nameplate capacity operations at WCP A on a consistent basis in the first quarter of this year.

“Capex will be significantly reduced in the year ahead, with about $30-million expected to be incurred at WCP A and lower sustaining capex than in 2025,” he says.

FINANCIAL POSITION

Kenmare notes that it had cash and cash equivalents of $48.6-million at year-end.

Gross bank loans, including accrued interest, were $206.4-million, compared to $80.4-million in 2024, and lease liabilities were $1-million.

As a result, the company says it had net debt of $158.8-million at year-end.

Kenmare explains that the increase in net debt is primarily owing to peak capex on the WCP A upgrade project during the year of about $156-million of cash spent, and the company also made dividend payments of $24.1-million.

Kenmare says net debt is expected to remain elevated through this year.

Kenmare is meeting its funding obligations through operating cash flows, available current assets and its $200-million revolving credit facility (RCF).

In late 2025, following a request by the company, Kenmare says its lenders granted a reset of the net debt to earnings before interest, taxes, depreciation, and amortisation covenant under its RCF, including adjusting the full-year 2025 covenant to a level of three times.

The company says these adjustments are intended to maintain ongoing covenant compliance through this period of elevated net debt.

GUIDANCE

Hickey explains that, in light of current industry outlook, the company’s primary operating focus for this year will be on value over volume, representing a shift from the historical focus on maximising production.

Under this approach, Hickey says, the company will be producing sufficient volumes to achieve product shipments of at least 1.1-million tonnes, an increase of over 15% year-on-year, which will unlock the value of the working capital contained in its current product inventories.

“Annual production guidance for 2026 is therefore lower than in recent years and we will also seek to limit operating costs, where possible,” says Hickey.

The company says it intends to produce lower volumes of finished products this year than it has in recent years to minimise operating costs and accelerate the drawdown of finished product stocks.

Consequently, ilmenite production is expected to be a minimum of 800 000 t, with corresponding reductions in the production of primary zircon and rutile.

Kenmare explains that production will be flexed upwards from this minimum guidance level to meet market demand once inventory levels have normalised.

The reprocessing of tailings to produce zirconium/titanium is expected to supplement concentrates production and as such, concentrates production is expected to be in excess of 81 000 t this year.

Kenmare says constraining production this year will allow the company to target a reduction in operating costs compared to 2025, in line with its value over volume approach.

Kenmare’s guidance for total cash operating costs in 2025 was between $228-million and $252-million; the company says operating costs for 2025 will be within this range and full details will be provided in the 2025 Preliminary Results.

Kenmare says it has also conducted a thorough assessment of its cost structure and identified some opportunities to further decrease operating costs this year, including minimising the use of dry mining.

Additionally, the company says the retrenchment process in respect of about 15% of its workforce was also initiated in the fourth quarter of 2025, which it says, while regretted, is a necessary and proportionate response to the challenges currently being experienced by Kenmare and the wider industry.

Total cash operating costs this year are, therefore, expected to be from $215-million to $225-million, with cash costs per tonne of finished product of $240 to $250, at the minimum production guidance.

The WCP A project remains on budget, with a total cost estimate of $341-million. Sustaining capital costs in 2026 are expected to be approximately $30-million, which is lower than in 2025.

“Kenmare is committed to maintaining a strong and flexible balance sheet and ensuring it is well-positioned for a recovery in its product markets, therefore will seek to defer discretionary capital cost items wherever practicable and safe to do so,” the company says.