JOHANNESBURG (miningweekly.com) – London-listed Kenmare Resources recorded earnings before interest, taxes, depreciation and amortisation (Ebitda) of $5.2-million for the year ended December 31, a turnaround from the loss of $11.5-million recorded in the prior financial year.

Heavy minerals concentrate production increased 28% year-on-year to 1.41-million tonnes, while ilmenite production rose 18% to 903 300 t and zircon production 32% to 68 200 t.

"The ilmenite market has been experiencing a strong recovery over the past 12 months, as evidenced by the increase in Ebitda in the second half of the year and the market continues to improve. The period also benefitted from improved shipment volumes and lower unit costs,” MD Michael Carvill said in a statement on Wednesday.

Cash operating costs per ton of final product declined by 18% during the year as final product volumes increased and total cash operating costs declined.

“As well as focusing on reducing total and unit cash operating costs, we are increasingly exploring the potential to enhance margins through increasing revenues by increasing the quality of products produced, particularly zircon, and increasing recoveries of valuable minerals,” chairperson Steven McTiernan said.

He added that global economic growth, increasing wealth and urbanisation were driving sustained increases in demand for the minerals the company produced.

The company’s Moma titanium minerals mine, which is located on the north-east coast of Mozambique, contains deposits of heavy minerals which include the titanium minerals ilmenite and rutile, as well as the zirconium silicate mineral, zircon.

“The Moma resource base can supply the world with these essential minerals for decades to come.”

Kenmare mined over 30-million tons of ore in 2016, up 9% on 2015.

The improved stability of the power supply the mine enjoyed in 2016 was primarily the result of the grid infrastructure improvements delivered by Electricidade de Moçambique in late 2015 and throughout 2016.

Meanwhile, several performance improvement projects were completed during the period and an enhanced maintenance system was commissioned, resulting in a steady increase in performance.

“We have made significant progress in improving recoveries in the mineral separation plant’s nonmagnetic circuit that produces our rutile and zircon products. Secondary zircon production increased as work from 2015, to recover valuable material from waste streams, continued in 2016,” he said. 

He added that the projects under way would increase the proportion of primary zircon to further enhance revenues.

“In 2017, we are targeting additional operating hours, taking advantage of the improved mechanical availability achieved in 2016 to further increase utilisation rates.”

Mined grades have shown a steady improvement through 2016 but are expected to average at slightly lower levels for full year 2017.

“Despite this, we expect to increase production of ilmenite by 5% to 16%, zircon by 6% to 22% and rutile by 15% to 28% over the levels achieved in 2016. This is possible owing to the operational performance improvements we have delivered at the mine,” McTiernan said.

Meanwhile, the company announced on Monday that Peter Bacchus has agreed to join the board as nonexecutive director.

His appointment will coincide with the retirement of Sofia Bianchi from the board in May.

"Bianchi's contribution to Kenmare over the last nine years has been immense. On behalf of the board, I would like to thank her for her commitment and strategic guidance,” McTiernan said.

He added that Bacchus’s advisory experience and deep knowledge of the mining industry would benefit the company greatly.