Michael Carvill, MD of mineral sands producer Kenmare Resources, said the third quarter, which ended September 30, was the first quarter of ilmenite production at nameplate capacity of 1.2 million tonnes per year, an 87 percent increase over the previous year’s equivalent quarter.
In northern Mozambique, Kenmare operates the Moma titanium minerals mine.
“Despite expected lower grades in the fourth quarter, we remain confident in the outlook for 2021 annual production and re-iterate our guidance of 1.1-million to 1.2-million tonnes of ilmenite.
“While we continue to remain vigilant against the threats posed by Covid-19. I am pleased to report that over 90% of our employees have now received two doses of vaccine. I’m also delighted to report that this quarter’s record production was achieved with no lost-time injuries (LTIs) and, in the past few days, we’ve achieved a new company record of five-million man hours worked without an LTI,” Carvill says.
He notes that market conditions for all products remained strong throughout the third quarter, with pricing having strengthened quarter-on-quarter, a robust order book in place and positive outlook across markets.
For the period, Kenmare recorded heavy mineral concentrate (HMC) production of 413 400 t, a 60% year-on-year increase, in line with expectations.
Ilmenite production was 314 400 t.
Primary zircon production was 15 700 t, representing a 44% increase year-on-year, benefitting from increased HMC production.
Total shipments of finished products was 322 600 t, a 173% increase compared with the previous year.
Demand for Kenmare’s products remained robust in the period, supporting strong sales volumes and further price increases.
The recovery in the downstream titanium markets continued, supporting high use at pigment plants globally and strong demand from titanium metal producers.
In the year to date, despite an increase in the supply of ilmenite from mines in China and concentrate products from Mozambique, the market has continued to be tight. Positive momentum continued in the period, as demand for ilmenite product to upgrade into high-grade feedstocks continued to grow strongly in China.
The outlook for the next quarter remains positive, with a strong order book in place.
The company says it continues to monitor the impact of power disruption to downstream industries in China, and the potential effect on demand related to the uncertainty in the Chinese real estate market.
However, it notes that demand remains strong from its customers in China, and elsewhere, into the next quarter and global feedstock inventories remain at low levels.
Demand for zircon improved in the quarter under review, as major economies continued their recovery following Covid-19 restrictions being lifted. Demand from the ceramics and foundry industries has recovered particularly quickly.
In China, Kenmare’s zircon concentrate benefited from a tight spot market. Coupled with supply disruptions, the strong demand has resulted in an undersupplied market and prices for zircon are expected to increase again in the next quarter following increases in quarter two and three.
The ramp-up of the HMC pumping system from Pilivili has continued to progress. Less road haulage was required in the quarter and is now being wound down. The overall forecast capital cost for the Wet Concentrator Plant (WCP) B project remains in line with prior guidance of $127-million.
The Rotary Uninterruptible Power Supply (RUPS) project has moved into the execution phase with civil engineering and building construction underway. Fabrication of the RUPS units is complete and transportation to site is under way.
The project is expected to be completed in the first quarter of 2022.
Work on the Nataka prefeasibility study (PFS) continues. Detailed orebody investigations are progressing well with a view to optimally mining with WCP A at Nataka from 2025. It is expected that the PFS will be finalised in 2022.