Moma kickstarts Q1 with double-digit production increases

JOHANNESBURG (miningweekly.com) – Output from the Moma titanium minerals mine, in northern Mozambique, during the first quarter of this year has set the pace for a targeted 5% to 16% year-on-year increase in full-year production, London-listed Kenmare Resources said on Thursday.

Double-digit year-on-year increases seen in production during the three months to March 31, supported the titanium minerals and zircon producers’ production guidance of 950 000 t to 1.05-million tonnes of ilmenite and associated by-products for the full year.

"Kenmare has delivered solid production in the first quarter, particularly for the main revenue-generating products of ilmenite and primary zircon, in what has traditionally been a lower producing quarter,” said Kenmare MD Michael Carvill.

During the quarter under review, Kenmare mined 8.4-million tonnes of ore, a 19% increase on the prior corresponding quarter in 2016, at an average grade of 4.86%, producing 29% more heavy mineral concentrate (HMC) at 353 500 t.

Ilmenite production increased 39% year-on-year to 256 500 t during the quarter, while zircon production increased 59% to 18 500 t, including 5 700 t of a lower-grade secondary zircon product, which was up 73% on the 3 300 t achieved in the first quarter of last year.

During the first quarter, total shipments of finished products were up 93% year-on-year to 256 100 t, comprising 245 000 t of ilmenite, 10 100 t of zircon and 1 000 t of rutile.

Kenmare pointed out that demand for ilmenite remained strong in the first quarter of the new year, which resulted in further price increases.

“First-quarter cash generation at the mine has continued the trend of quarter-on-quarter improvement, since bottoming in the second quarter of 2016. The company remains on track in its strategy of maximising cash generation through increasing production and reducing cash costs in what remains a strong market for our products,” said Carvill.

Further, the mine benefited from increased stability and reliability of electricity from Electricidade de Moçambique during the first quarter, while supplementary diesel-powered generators were used to protect power stability against inclement weather in the rainy season.

Kenmare said the quarter ended with 22 100 t of HMC closing stock, compared with 66 500 t at the start of the year, and closing stock of intermediate magnetic concentrate of 70 500 t.

The closing stock of finished products at the end of the first quarter was 212 200 t, of which 60 000 t is being held for a customer, which has already paid.