Kenmare Resources reports strong demand for ilmenite in first quarter
Explorer says market conditions better as cash generation continues to improve
During the first quarter of 2017, Kenmare shipped 256,100 tonnes of finished products.
Irish titanium and zircon miner Kenmare Resources has reported stronger market conditions for minerals as first quarter production levels increased.
The explorer, which operates the Moma mine in northern Mozambique, recorded solid production in the first three months, particularly for its main revenue-generating products of ilmenite and primary zircon, in what is traditionally been a low-producing quarter.
It added cash generation at the mine continued to improve in the period.
“Demand for ilmenite was strong in the first quarter, due to solid offtake in the Chinese spot market for pigment and slag production. Demand for imported ore also benefited from some disruption in Chinese domestic ilmenite production, due to stricter enforcement of environmental regulations. This was despite an increase in ilmenite by-product volumes in the second half of 2016 due to higher iron ore prices,” Kenmare said.
“Output from southern India has also reduced in recent months due to a mining ban imposed by the authorities, subject to a pending court case. Ilmenite prices have increased strongly in the past 12 months and are expected to incentivise the restart of some supply to meet additional demand, which may lead to a moderation of future price increases as the market reaches greater equilibrium,” it added.
During the first quarter, Kenmare shipped 256,100 tonnes of finished products, comprised of 245,000 tonnes of ilmenite, 10,100 tonnes of zircon (including 3,300 tonnes of secondary grade zircon) and 1,000 tonnes of rutile.
The level of ore mined rose 19 per cent to 8.4 million tonnes, at an average grade of 4.86 per cent, producing 353,500 tonnes of heavy mineral concentrate (HMC), a 29 per cent increase on the same quarter a year earlier.
Finished product volumes were up 39 per cent, and zircon production was up 59 per cent.
HMC production rose by 29 per cent to 353,500 tonnes versus the first three months of 2016 but declined in comparison with the preceding quarter.
Kenmare reported in January that 2016 was a record year for both production and shipments of products from the Moma mine as it forecast higher prices for 2017.