Kenmare Resources has provided a trading update for the quarter and half year ending 30 June 2021.
MD, Michael Carvill, states:
“Kenmare’s capital investment over the last three years continues to deliver as Q2 saw a record quarter of production for ilmenite, improving on the record set in Q1 2021. WCP B continues to perform well in Pilivili, supporting higher volumes of ore mined and final product output. We remain confident in the outlook for annual production and re-iterate our guidance of 1.1-1.2 million tonnes of ilmenite in 2021.
“We are concerned by the rise in delta variant COVID-19 cases in Southern Africa. Therefore I’m particularly pleased that we expect to offer COVID-19 vaccinations to all Mine employees and contractors, as well as local communities, later this month.
“Market conditions for ilmenite, and titanium feedstocks in general, remained strong in Q2 2021 with pricing strengthening quarter on quarter. The outlook for zircon has also continued to improve, with price increases during the quarter and continuing to date.”
Q2 2021 overview
- Improved LTIFR of 0.14 per 200,000 man-hours worked for the 12 months to 30 June 2021 (30 June 2020: 0.32), zero lost time injuries recorded during the quarter
- COVID-19 vaccinations of the workforce and local communities are expected to start later this month
- HMC production of 436,600 tonnes in Q2 2021, representing a 41% increase compared to Q2 2020 (310,300 tonnes), benefitting from higher grade and excavated ore volumes
- Record ilmenite production of 283,900 tonnes in Q2 2021, representing a 35% increase compared to Q2 2020 (209,900 tonnes), benefitting from increased HMC production
- Primary zircon production of 14,900 tonnes, representing a 28% increase compared to Q2 2020 (11,600 tonnes), also benefitting from increased HMC production
- Total shipments of finished products of 249,600 tonnes, representing a 14% increase compared to Q2 2020 (219,100 tonnes)
- Kenmare expects production of all products to be within 2021 guidance
- Strong ilmenite market conditions continued in Q2 2021 and this is expected to continue in Q3 2021, with higher prices agreed and a strong order book in place
- The positive outlook for the zircon market has continued to strengthen, with received prices rising in Q2 2021
- At the end of H1 2021, net debt was US$76.1 million (31 December 2020: US$64.0 million net debt), as a result of higher prices and sales being offset by the timing of capital expenditure and a reduction in the use of invoice factoring