Ongoing cost-cutting efforts at mineral sands producer Kenmare Resources’ Moma titanium minerals mine, in northern Mozambique, could result in a 15% to 20% reduction of the mine’s workforce, the company says.

Through its substantial cost-cutting programme, Kenmare has achieved a decline of 14% in unit cash operating costs per tonne of product produced for the first half of 2014 relative to the first half of 2013.

However, these and subsequent savings have been insufficient to offset the decline in the prices of resources.

Therefore, Kenmare has undertaken a thorough review of operations and staffing, which has resulted in the identification of areas where further efficiencies can be achieved.

“Unfortunately, this will result in a focused reduction of employees at the mine,” notes the company.

Kenmare has been engaged with employee representatives to explore alternatives, including amendments to pay scales and voluntary redundancies.

However, it is now expected that compulsory redundancies will be necessary.

“Kenmare continues to engage with the government of Mozambique and workers’ unions on this matter,” the company states.

Moma Mine
The Moma mine contains reserves of heavy minerals, which include the economic titanium minerals ilmenite and rutile, used as feedstocks to produce titanium dioxide pigment, as well as the relatively high-value zirconium silicate mineral, zircon.

Kenmare has the capacity to produce up to 800 000 t/y of ilmenite, 50 000 t of coproduct zircon and 14 000 t of coproduct rutile at the Moma mine.

The company is currently in the ramp-up phase of an expansion at Moma, which will be finished by the end of the year. The expansion will increase the mine’s production by about 50%, resulting in an increase in the production of ilmenite to 1.2-million tons a year, zircon to 80 000 t/y and rutile to 22 000 t/y.