London-listed Kenmare Resources achieved a “good” 2022, with ilmenite production  from the Moma titanium minerals mine, in northern Mozambique, of 1.09-million tonnes, despite the challenges of power interruptions in the fourth quarter, MD Michael Carvill says in a trading update for the year and fourth quarter ended December 31. 

Shipments in the fourth quarter were near record levels, with both transshipment vessels achieving high availability following the recent dry docking of the Bronagh J, he notes.

“Despite some macroeconomic headwinds, we continue to see a robust market for our products, with strong pricing achieved in quarter four 2022. As China further relaxes Covid-19 restrictions, we expect higher domestic demand to support our sales in the region.

“Kenmare has moved to a net cash position of $27.5-million at the end of 2022, which represents a $110.3-million improvement from the previous year, while also having paid record dividends. We continue to target a total dividend payment of 25% of profit after tax in respect of 2022,” Carvill outlines.

The company achieved its 2022 revised production guidance for ilmenite and rutile, while its original production guidance was achieved for primary zircon and concentrates.

Heavy mineral concentrate (HMC) production increased by 2% year-on-year to 1.57-million tonnes, benefitting from higher tonnes mined and improved grades.

Ilmenite production decreased by 3% to 1.09-million tonnes.

Shipments of finished products reached 1.08-million tonnes, a 16% decrease compared with the record tonnes shipped in 2021, reflecting planned maintenance on the transshipment fleet.

Higher average prices were achieved for all products in 2022.

Kenmare had a lost-time injury frequency rate of 0.09 per 200 000 hours worked to period end, with three lost-time injuries recorded.

Work continues on the prefeasibility study (PFS) for the Nataka orezone, where Wet Concentrator Plant (WCP) A is scheduled to begin mining in 2025. It is estimated that the capital cost of the WCP A relocation to Nataka is unlikely to be less than $225-million.

Also, Kenmare is making good progress on the environmental-impact assessment for the project.

OUTLOOK

Kenmare’s 2023 ilmenite production guidance range has been set at 1.05-million to 1.15-million tonnes.

Closing product inventories at the end of 2022 were above normal levels, which provides flexibility regarding shipment volumes in 2023. This year’s shipments will depend on market conditions and the cadence of production through the year, Kenmare points out.

Total cash operating costs are anticipated to increase in 2023 owing to cost increases in labour, power and fuel as a result of forecast inflation, as well as one-off operational costs associated with traversing the Namalope West area at WCP A and increased insurance costs.

Expenditure on development projects and studies is expected to be about $14-million in 2023, with these costs primarily relating to ongoing feasibility works for the Nataka orezone, and for optimising mining capacity.

Improvement projects are expected to cost $8.5-million and relate to numerous smaller projects in water, energy and security management. There are also projects relating to improvements at WCP A, WCP B and the mineral separation plant.

Sustaining capital costs in 2023 are expected to be about $33.5-million.

Kenmare plans to release its 2022 preliminary results on March 22. This will be followed by a capital markets day for analysts and investors on April 26.