Kenmare Resources, which is listed on the London Stock Exchange, has continued to see significant increases in production and sales volumes, resulting in higher profitability for the mineral sands producer.

This was demonstrated by the company’s 121 per cent year-on-year increase in earnings before interest, taxes, depreciation, and amortization (Ebitda) for the six months ended June 30, as well as a 278 per cent increase in profits after tax.

Kenmare, which operates the Moma titanium minerals mine, in northern Mozambique, remains confident in its outlook for full-year production, and on August 18 reiterated its guidance of producing between 1.1-million and 1.2-million tonnes of ilmenite in 2021.

MD Michael Carvill confirmed that Kenmare’s Rotary Uninterruptible Power Supply (Rups) decarbonisation project, which is targeting a material reduction in carbon dioxide emissions, was also underway.

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Market conditions for titanium feedstocks, meanwhile, remained strong in the first half of this year, with pricing strengthening. The outlook for zircon has also continued to improve, with price increases recorded in the first half of the year and continuing into the second half of the year, to date.

Kenmare has completed the first round of Covid-19 vaccinations of its mine workforce. The second round has started and is due for completion by mid-September.

The local community vaccination programme to distribute 12 000 inoculations started in July.

In terms of operations, Kenmare excavated ore volumes of 19.9-million tonnes, including a quarter-on-quarter record of 10.9-million tonnes in the second quarter.

Heavy minerals concentrate (HMC) production was 798 500 t, marking a 43% increase year-on-year, owing to higher ore grades and tonnes mined.

Total finished product production was 612 100 t, a 49% increase owing primarily to increased HMC availability.

Shipments totalled 594 100 t, a 44% increase owing to higher production volumes.

Kenmare declared an interim dividend of $0.07 a share, up 217% year-on-year and in line with the company’s dividend target to return 25% of profit after tax to shareholders.

Revenues were $167.8-million for the first half of the year – a 51% year-on-year increase as it benefitted from higher volumes shipped and higher prices.

Ebitda was $82.3-million, while profit after tax was $48-million, up 278% year-on-year and setting a new interim record.

The average received free onboard price for all finished products was $282/t in the first half of the year, marking a 5% increase as it benefitted from strong market conditions but was impacted by a lower proportion of zircon and rutile sales, which is expected to reverse in the second half of the year.

Cash operating cost per tonne of the finished product fell by 22% to $143/t as higher cash operating costs were more than offset by increased production volumes.

At the end of the interim period, cash and cash equivalents were $56.5-million and gross debt was $132.7-million, resulting in net debt of $76.2-million, which Kenmare said was mainly owing to the timing of capital expenditure payments and a reduction in the use of invoice factoring.

Strong ilmenite market conditions continued during the period and are expected to continue in the third quarter, with higher prices agreed and a strong order book in place.

The outlook for the zircon market, meanwhile, has improved, with received prices rising in the second quarter of the year.