Kenmare Resources (LON:KMR) used an investor presentation to review 2025 operating performance and outline 2026 priorities as it completes a major upgrade at its Moma titanium minerals mine in Mozambique and adjusts to a weaker pricing environment.
Business overview and long-term focus
Management described Moma as a long-life asset, noting close to 100 years of mineral resources at current production rates. Kenmare has operated in Mozambique for nearly 40 years and has produced at Moma for more than 18 years. The company produces titanium minerals, including ilmenite and rutile, used in paints, paper, plastics, and titanium metal, and said it is the largest vendor of ilmenite into open markets, representing about 6% of global supply.
Safety, sustainability, and community initiatives
The company reported what it characterized as one of its best years for safety, with three lost time injuries in 2025, and said 97% of its staff are Mozambican. Kenmare said it has invested more than $25 million in community initiatives since 2004 and cited recent work on a new district hospital that it said is nearly 80% complete. It also reported more than 200,000 trees were planted as part of rehabilitation and said waste recycling exceeded 60% in 2025, extending the expected life of its existing landfill.
Management added that Kenmare has won Mozambique’s “most transparent company” prize for each of the last five years and said the president commended the company in meetings during 2025 for social programs, transparency, and job quality.
2025 operations: production, shipments, and a new product
Operations director Ben described Moma as a low-cost bulk mining operation, mining up to 50 million tonnes per annum, using dredge mining units with floating wet concentrator plants. Concentrates are transported to a mineral separation plant where ilmenite, rutile, zircon, and a monazite concentrate are separated using physical methods, with no chemicals, and shipped via Kenmare’s jetty using offshore transshipment.
Kenmare said 2025 production was impacted by the WCP A upgrade, contributing to a 15% year-on-year reduction in heavy mineral concentrate production. Management said it made a deliberate decision not to offset the shortfall using higher-cost supplementary mining. Ilmenite production was also lower, though the company said it met revised guidance. Zircon production improved, with Kenmare saying it achieved original guidance by processing intermediate stockpiles and benefiting from improved recoveries at the mineral separation plant.
On concentrates, management highlighted production of a new product called “ZirTi,” created from previously stockpiled material that had not been valuable. The company said ZirTi will continue into 2026 and beyond.
Shipments were lower in 2025 due to poor weather in the first half and the five-year compulsory dry-docking of one transshipment vessel in the second half, management said.
WCP A upgrade and transition to Nataka
Kenmare detailed progress on the WCP A upgrade, which is designed to enable the company’s largest plant to mine a new ore body, Nataka. Management said Nataka represents more than 70% of the mine’s mineral resources and is expected to support operations for more than 20 years with the new equipment being implemented.
The company said the WCP A upgrade has a total cost of $341 million, with more than 80% spent by the end of 2025. Major construction is complete, installation is done, and the plant has been handed over to operations, management said. Commissioning and ramp-up are ongoing, and while the project has been “slightly later” than anticipated, Kenmare said remedial measures discussed in prior Q4 announcements—such as the slimes handling facility and a new tailings storage facility—are operating as expected. Additional debottlenecking and process optimization are continuing through the first quarter, according to management.
Market conditions, financial items, and 2026 guidance
Management distinguished between demand and supply conditions. Kenmare said demand for its products was stable and that it could sell as much as it produced, citing that zircon and rutile were sold out toward year-end. However, it said additional ilmenite supply in China—along with ilmenite derived from imported concentrates—has contributed to oversupply and weaker pricing. Kenmare said it has a strong order book for the first quarter of 2026 and signed new sales contracts during 2025, while adopting more conservative pricing assumptions for recovery timing.
Finance director James provided unaudited financial updates ahead of full-year results expected in March. Kenmare ended 2025 with approximately $48.6 million in cash and net debt of just under $159 million. The company agreed with its lender group to relax its net debt to EBITDA covenant from 2.0x to 3.0x, which it said it considered a “fairly safe level” to remain compliant at year-end 2025.
Kenmare also discussed several accounting impacts tied to pricing and receivables:
- Customer administration: A customer that received a shipment in September went into administration, leaving $9.3 million outstanding. Kenmare said sales processes are underway for two plants associated with the situation, including one at an advanced stage, and it is working to recover the amount.
- Impairment: After a $100 million impairment at the half year, Kenmare expects a full-year impairment of between $250 million and $300 million, driven mainly by weaker medium-term pricing expectations. The company emphasized the impairment is non-cash.
- Inventory valuation: Kenmare expects an expense of around $15 million in preliminary results because some ilmenite inventory net realizable value has fallen below production cost.
For 2026, Kenmare said it is shifting emphasis from production targets to shipments and cash generation, aiming to reduce high finished-product inventories. The company guided to:
- Shipments: 1.1 million tonnes of finished products, roughly 15% above 2025, supported by having both transshipment vessels available.
- Production: More than 800,000 tonnes, with management indicating output will be set as needed to meet shipment objectives.
- Operating costs: $215 million to $225 million at the 800,000-tonne production level, reflecting cost actions, including a retrenchment program of up to 15% of personnel.
- Capital spending: About $30 million of development CapEx in 2026 as the WCP A project nears completion, plus sustaining capital guidance of around $30 million. James said remaining WCP A spend beyond 2026 includes about $40 million spread over 2027 to 2032.
In a Q&A, management said it does not expect further multi-hundred-million-dollar “obligatory” investments, noting that future moves of other plants to Nataka should be significantly cheaper and not require material upgrades.
Kenmare also provided an update on ongoing efforts to renew its implementation agreement with the Mozambican government, saying it has proposed royalties rising from 2.5% to 3.5% over coming years versus the prior 1% rate, though it noted the company is entitled to renewal on the same terms. Management said the agreement requires approval by the Council of Ministers and cited broader government priorities as a factor in timing, adding there is “no formal timeline” but that it hopes to conclude the renewal in 2026.
About Kenmare Resources (LON:KMR)
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