Kenmare Resources (LON:KMR) said it is navigating weak titanium-mineral markets while completing a major upgrade at its Moma Titanium Mineral Sands mine in northern Mozambique, an operation the company said has more than 100 years of remaining mine life.
During a presentation, James of Kenmare said Moma has operated since 2007 and supplies about 6% of global titanium dioxide feedstock. The mine produces titanium minerals, principally ilmenite, used in titanium dioxide pigment applications including paints, plastics, paper and inks. It also produces zircon for ceramics, refractories and chemical applications.
Upgrade ramp-up and market pressure
The upgrade added two more powerful dredges and expanded the concentrator plant to handle higher sand dunes and increased slimes content in the next ore zone. However, James said the ramp-up has progressed more slowly than anticipated, resulting in lower production this year than both expectations and the previous year.
Kenmare has maintained shipments by selling down finished-product inventories and developing customers, particularly in China, for products previously treated as waste concentrates. The company said its shipments rose despite lower heavy mineral concentrate and ilmenite production.
Pricing remains the principal challenge. James said average realized pricing fell from the mid-$300s per tonne to $240 per tonne during the first half, despite higher shipment volumes. Ilmenite prices have declined to about $200 per tonne, and in some cases lower, after elevated prices following the COVID-19 pandemic encouraged new supply from lower-cost and relatively rudimentary operations in countries including Mozambique, Sierra Leone and Nigeria.
Kenmare said it sees conditions that could eventually support an ilmenite-price recovery, including supply leaving the market, higher diesel costs for producers reliant on diesel-fired power, and improved conditions for downstream customers. Nevertheless, it said a recovery has not yet materialized.
Zircon has provided a relative bright spot, with the company reporting stronger conditions and price increases emerging during the second half. Traditionally, ilmenite accounts for about 70% of Kenmare revenue, zircon generates roughly 20% to 25%, and other concentrates make up the balance. James said Kenmare is targeting areas with higher zircon content and better-quality ilmenite using its smaller, more flexible mining assets.
Cost reductions, debt and government agreement
The company said it reduced its workforce by approximately 15% and cut costs across categories in response to the downturn. Those actions partly offset lower revenue, but EBITDA fell to about $4 million in the first half, which James described as the company’s lowest result in some time.
Net debt stood at approximately $175 million. Kenmare has a $230 million revolving credit facility with four South African banks, and said it has received waivers for EBITDA-based debt covenants through 2026. The company said the waivers reflect both the project ramp-up and weak market conditions, while providing financial headroom.
A further focus is renewal of Kenmare’s implementation agreement with Mozambique’s government. The agreement, originally implemented in 2004, governs fiscal terms for processing and export activities and expired in December 2024. Kenmare said it has continued operating under legacy terms with government permission while negotiating a renewal.
James said discussions over the past six months have been constructive and that the parties are nearing an arrangement. The company has accrued for a royalty-rate increase from 1% to an expected 2.5% for the past year and a half. Kenmare said concluding the agreement would remove a key uncertainty for shareholders and lenders.
Production outlook and rare-earth opportunity
For 2026, Kenmare expects to produce between 900,000 and 950,000 tonnes of product and sell about 1.1 million tonnes, using inventory sales to generate cash while managing costs through the market trough.
The company also highlighted a potential rare-earth opportunity. Kenmare currently sells mineral sands concentrate containing monazite, a rare-earth-bearing mineral, under applicable licensing and handling arrangements. James said the company is completing a prefeasibility study for an on-site processing facility at Moma that could produce an upgraded monazite product for sale to external counterparties.
He said the company is assessing pricing and potential commercialization routes, noting that the market is opaque but that there is substantial interest in secure feedstock supplies for planned rare-earth processing facilities.
Kenmare also emphasized its local operations and environmental practices, stating that 98% of its workforce is Mozambican and that it has invested more than $25 million since 2004 through the Kenmare Moma Development Association in infrastructure, education, sanitation and healthcare. The company said it uses hydro-generated electricity for about 90% of its power, recycles water, does not use toxic chemicals and progressively rehabilitates mined areas for agricultural use.
