Kenmare Resources Plc, the titanium miner, is considering arbitration after prolonged and “inconclusive” talks with Mozambican authorities over the extension of its mining rights. The company’s 20-year agreement for its flagship Moma Titanium Minerals mine lapsed in December 2024, leaving its future operations in the country in limbo.
The dispute hinges primarily on a new royalty rate proposed by the Mozambican government. Kenmare’s managing director, Tom Hickey, revealed in a statement that the royalty rate was the “principal sticking point” in negotiations that have been ongoing since 2022. While the company has proposed a phased increase in the royalty rate from 2.5% to 3.5% over a new 20-year agreement, a resolution remains elusive.
The company’s proposal includes other concessions, such as a withholding tax on payments to non-Mozambican suppliers and increased capital investments and contributions to community development projects.
The Moma mine is a major global producer of ilmenite, a key source of titanium dioxide used in everything from industrial paints to cosmetics and electronics.
The potential for arbitration adds another layer of uncertainty for the company. Kenmare reported a challenging first half of 2025, with profit plunging 71% to $6.1 million despite a 3% increase in mineral sales to $160 million. This was largely due to higher operating costs and weak prices in an oversupplied market. The company also took a non-cash impairment loss of $100.3 million, reflecting a more cautious outlook on future revenue.
Despite the hurdles, Kenmare’s production numbers remain solid. Heavy Mineral Concentrate production was up 2% to 670,600 tonnes, and finished product production also rose by 2% to 500,800 tonnes. The company noted that demand for its ilmenite remains strong, supported by a stable global pigment market and growth in the titanium metal market.
Hickey remains optimistic about the company’s ability to meet its 2025 production and cost guidance and is exploring options to increase shipping capacity. He emphasized that the non-cash impairment charge will not affect operations, projects, or the company’s ability to pay dividends.
