London-listed Kenmare Resources’ production guidance for the year remains unchanged, albeit towards the bottom end of guidance for ilmenite and rutile, despite a “challenging” first quarter ended March 31, with operations and production significantly disrupted by a severe lightning strike in February, MD Michael Carvill says.

“The market for ilmenite stabilised in the first quarter, with evidence of spot price increases in recent weeks supported by recovering Chinese pigment demand. While received prices are lower than the peaks achieved in 2022, they nevertheless remain near all-time highs,” Carvill highlights. 

Heavy minerals concentrate (HMC) production from the company’s Moma titanium minerals mine, in northern Mozambique, decreased by 18% in the period to 315 000 t from the previous year’s corresponding quarter, heavily impacted by the lightning strike and lower recoveries.

Ilmenite production decreased by 20% to 204 300 t and primary zircon production decreased 12% to 11 400 t owing primarily to lower HMC availability.

Rutile production decreased by 15% to 1 700 t, in line with lower HMC consumption.

Concentrates production decreased by 6% to 10 100 t, benefitting from the processing of stockpiles.

Total shipments of finished products increased 17% to 271 700 t, benefitting from increased transshipment capacity and availability of ocean-going vessels.

The lost time injury frequency rate was 0.15 per 200 000 hours worked on a 12-month rolling basis; and 1.3-million lost time injury-free hours were achieved by the end of March.

As alluded to, the market for ilmenite stabilised in the quarter, at lower levels than the previous one, with evidence of spot price increases in recent weeks.

However, received prices of ilmenite decreased quarter-on-quarter, because of weaker demand for pigment in the fourth quarter of 2022.

The global pigment market remained weak as destocking of inventories only halted in early 2023 and underlying demand was impacted by higher interest rates. However, chloride pigment production in China rebounded strongly in the period and demand from the titanium metal sector continued to increase, supporting demand for Kenmare’s ilmenite, the company highlights.

It says that, despite increased supply from domestic ilmenite producers and Chinese concentrate producers operating in Mozambique, spot ilmenite prices in China have increased in recent weeks, benefitting from stronger pigment production.

Customer enquiries for ilmenite shipments in the second quarter have also risen with pigment demand, while demand for ilmenite beneficiation remains strong.

Demand for zircon weakened in the second half of 2022 and this continued in the period under review; while the Chinese market has remained subdued, India has continued to show strong demand growth, Kenmare outlines.

It says zircon prices remained stable in the period, benefitting from lower supply, owing to production issues in Australia and South Africa. Kenmare is continuing to see strong demand for its zircon products in the second quarter, the company notes.