16th Oct 2019 10:56
(Alliance News) - Kenmare Resources PLC is on track, the company said on Wednesday, though commodity prices have been mixed and shipments missed targets.
For the three months to September, Kenmare's ilmenite output fell 1% to 230,800 tonnes, but zircon climbed 26% to 12,900 tonnes and rutile by 24% to 2,100 tonnes. These figures were 5% higher, 18% higher, and 5% lower respectively on the second quarter.
Ilmenite and rutile are titanium ores, while zircon is used to make things such as ceramics and pottery more opaque. The firm mines these commodities at the Moma mine in Mozambique.
Overall, Kenmare's shipments for the quarter were 192,900 tonnes, down 3% on the year before, and 37% lower than the second quarter.
Third-quarter shipments were lower than expected, Kenmare said, with poor weather hampered loading rates. Some 35,000 tonnes worth of shipments which were meant for the third quarter will be registered in the fourth quarter, Kenmare said.
Fourth-quarter shipments should "increase significantly" due to strong demand and better weather conditions. The third-quarter miss comes after bad weather meant first-quarter shipments also missed expectations.
Looking at commodity markets, Kenmare said demand for pigments, the main consumer of titanium feedstocks, is weakening due to global economic worries, but Kenmare said demand is still exceeding supply.
Demand for ilmenite is being boosted by a desire for better quality feedstocks, which Chinese ilmenite cannot provide, while supply from traditional producers is weakening, helping prices.
Lastly, zircon's market has weakened, mainly due to slower global growth and a disruption to industry in China.
"Production and operating costs continued to track well against our guidance in the third quarter and we remain in line on both metrics. With the dredge and major components of the wet concentrator plant for the WCP C development now on site, our growth projects to deliver 1.2 million tonnes per annum of ilmenite continue to advance," said Managing Director Michael Carvill.
"We are on track to commence commissioning of WCP C later this year."
"The ilmenite market remained tight in third-quarter 2019, with strong demand for ilmenite suitable for upgrading to slag driving higher prices, despite softer pigment market conditions. We have secured higher prices for ilmenite spot shipments in fourth-quarter 2019. Although the zircon market has experienced some weakness in 2019, we believe the fundamentals for all of our products remain positive due to emerging supply constraints," Carvill continued.
By George Collard; [email protected]
Copyright 2019 Alliance News Limited. All Rights Reserved.
Related Shares:
Kenmare Resources