Increased production at Kenmare Resources
Second quarter ilmenite production up 20 per cent
Production of zircon, a raw material used in the ceramics industry, fell 16 per cent from 10,400 tonnes in the first quarter to 8,700 tonnes during the second three months.
Mining company Kenmare Resources increased its overall production during the second quarter of this year.
Between April and June the company’s production of ilmenite, a raw material that is used to produce titanium metal and welding electrodes, was up 20 per cent on the first quarter of 2013.
Some 165,100 tonnes of ilmenite were produced during the quarter, compared to 137,500 tonnes during the previous three months.
In July 80,000 tonnes of ilmenite were produced and Davy stockbrokers noted that this monthly production rate was likely to increase.
The stockbroker also added that when combined with the 302,600 tonnes produced during the first half of this year total ilmenite production for 2013 should reach 800,000 tonnes.
Similarly, heavy mineral concentrate production was up 53 per cent to 290,200 tonnes during the quarter.
However, production of zircon, a raw material used in the ceramics industry, fell 16 per cent from 10,400 tonnes in the first quarter to 8,700 tonnes during the second three months.
Not all of the inventory which had built up during the fist quarter of this year was sold in the second quarter. However, this stockpile is expected to be sold over the remaining months of 2013.
Investment bank RBC capital markets said that Zircon demand is improving and it expects prices to reach $1,250 per tonne during the second half of this year. RBC also added that sulphate ilmenite fetches $160 per tonne in China but higher-grades will sell for between $230 and $250 per tonne.
Kenmare has also started to increase production at the expanding Moma mining operation in Mozambique.
Managing director Michael Carvill said the firm is encouraged to see the expanded facilities operating and starting to contribute meaningful production.
“The company’s operations team at Moma are now in full control of the plants and we all look forward to completing the ramp-up as quickly as possible,” he said.
A more flexible arrangement for financing the Moma expansion has also been agreed with Kenmare’s bank.
Repayment of $13 million senior debt will now be deferred from August 2013 to August 2014 and subordinated debt repayments are also not required to start until August 2015. 2014),
RBC said this should relieve investor concerns that new equity would have to be raised in order to complete the expansion and that the “new head room could also enable (it)to withhold product from the Chinese market until prices improve”.