KENMARE REPORTS INCREASED PRODUCTION AT MOMA

The Irish company Kenmare Resources has announced that production of ilmenite (iron titanium oxide) at its dredge mine in the northern Mozambican coastal district of Moma increased by 12 per cent in the second half of 2010.Ilmentite is the main ore produced at the mine. Production of zircon (zirconium silicate) rose by 21 per cent over the same period, and production of rutile (titanium dioxide) by a remarkable 147 per cent.   Production of the heavy mineral concentrate (from which the three ores are later separated) rose by eight per cent, and in the second half of the year 346,202 tonnes of finished products were shipped from Moma.  This brings total shipments for the year to 712,650 tonnes, an increase of 71 per cent on the 418,000 tonnes exported in 2009. Kenmare regards this as “a very strong performance”, particularly because mining at Moma stopped for a month because of a breach in the wall of a tailings pond in October. This accident led to a wave of water, sand and mud crashing through the village of Topuito, killing a child, and damaging a large number of homes.Kenmare announced that all affected families gave now returned to their homes and have received compensation. Extensive earthworks were erected “to ensure there could be no repetition of the spillage”, said the Kenmare statement. Mining resumed on 9 November, and in the latter half of the fourth quarter, the mine was running at full capacity.The company also announced that “site work will commence shortly on the upgrade of the jetty, which will enhance operational flexibility by allowing berthing and loading of the trans-shipment vessels on both sides of the jetty. This project is on schedule for completion in the second quarter of 2011”.Kenmare says that its project for expanding production, so as to increase the mine’s output by 50 per cent, is on schedule. The full expansion team of 110 staff is now in place. “The construction of long lead-time items is well underway, while the remaining packages have been tendered and further contract awards are due shortly”, announced the statement. Kenmare expects the conditions for increased production to be completed in 2012.The company reported strong world demand for pigments (the main use of titanium minerals). “The speed and strength of the demand recovery in 2010 caught many industry participants by surprise and feedstocks are now in tight supply, despite producers returning production to full capacity”, said Kenmare. “This shortage will become more acute in the coming years”.From the company’s point of view this is good news, because “prices are expected to increase significantly as limited new supply is expected to enter the market within this time horizon”.There is particularly strong demand in the United States, Europe and China for Kenmare’s main product, ilmenite, and the company expects to be able to charge customers much more for its ilmenite in 2011. Strong Chinese demand for zircon means that the price of this ore will also increase substantially.