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Kenmare Sets New Records with 2021 Production, Injury Rate, Shipments

Kenmare Sets New Records with 2021 Production, Injury Rate, Shipments

LSE-listed titanium minerals and zircon producer Kenmare Resources increased its 2021 production by 30% year-on-year, owing to a record 1.55-million tonnes being mined, and a 19% increase in ore grades to 4.63% as a result of wet concentrator plant (WCP) B’s relocation to the high-grade Pilivili ore zone in the third quarter of 2020.

The miner, which operates the Moma Titanium Minerals mine in northern Mozambique, increased its heavy mineral concentrate (HMC) production as a result of a 14% increase in excavated ore volumes, primarily as a result of a full year of production from WCP B in 2021.

As a result, HMC production in the fourth quarter of 2021 was 343 900 t – 11% higher than that of the corresponding period in 2020. A 24% increase in ore grades (4.31%) compared with the fourth quarter of 2020 was experienced as mining commenced in the highest grade area of Pilivili.

Ilmenite production guidance this year ranges between 1.125-million tonnes and 1.225-million tonnes, while primary zircon ranges between 54 400 t and 63 200 t.

Guidance for rutile this year ranges between 9 500 t and 11 500 t and concentrates (secondary zircon and mineral sands) between 40 300 t and 46 800 t.

MD Michael Carvill says 2021 was a record year for Kenmare in terms of safety, production and sales because on January 6 this year, the company achieved a major milestone of one year without a lost-time injury, representing more than six-million hours worked.

For 2021, Kenmare recorded its lowest-ever lost-time injury frequency rate of 0.03 per 200 000 hours worked – an 88% improvement compared with 2020.

Although, as anticipated in the mine plan, ore grades were down 11% compared with the third quarter of 2021, they nonetheless remained higher than expected. This was as a result of changes to the dry mining plan to partially offset the negative impact of power instability experienced during the fourth quarter.

Going forward, grades are expected to normalise at about 4.2% this year.

The decrease in grades was partially offset by a 23% increase in excavated ore volumes in the fourth quarter of 2021, primarily as a result of a full quarter of production from WCP B, in comparison to the ramp-up in the corresponding period of 2020.

Relative to the third quarter of 2021, excavated ore tonnes reduced by 8% primarily as a result of the power supply disruptions, which impacted mining utilisation rates. However, by mid-November 2021, power stability had improved and utilisation increased.

In addition, during the fourth quarter of 2021, increased slimes levels negatively impacted on feed rates and recoveries. Slimes levels are expected to remain high this year and, consequently, extensive mitigation measures are being implemented in the first quarter of this year.

These include the installation of an additional cyclone for ore desliming, an extended flocculation trial following an encouraging initial trial in the fourth quarter of 2021 and upgrades to the tailings infrastructure to reduce slimes recirculation and improve metallurgical recoveries.

Also, a rotary uninterruptible power supply project, which is due to be completed before the end of March, is expected to improve power stability on a consistent basis and reduce reliance on diesel generators going forward.

Product production 

Production of Kenmare’s main product – ilmenite, was within the guidance range for 2021, as was production of primary zircon and concentrates, despite the significant negative impacts of Covid-19 in the early parts of the year.

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As such, ilmenite production increased by a record 48% year-on-year to 1.11-million tonnes, primarily as a result of a 38% increase in HMC processed. It also benefitted from increased ilmenite content in the HMC following the relocation of WCP B to Pilivili, and improved recoveries relative to 2020.

The production of primary zircon increased by 30% to 56 300 t as HMC processed increased, albeit with a slightly lower zircon content than in 2020. Concentrates production, however, increased by 25% to 43 900 t, benefitting from increased HMC processed but partially offset by a lower grade feed mix.

The production of rutile increased by 48% year-on-year to 8 900 t in 2021 as a result of the previously reported rutile recovery improvement programme.

However, Kenmare missed the bottom of the guidance range by 6% due to delays in implementing this programme as a result of Covid-19-related complications, lower rutile feed grade in the HMC and power-related impacts at the mineral separation plant in the fourth quarter of 2021.

As for shipments, 2021 was a record year for Kenmare with 1.28-million tonnes shipped – a 51% increase year-on-year, reflecting higher production in addition to the drawdown of finished product inventory. Shipments also benefitted from increased transshipment capacity resulting from the previously completed upgrades.

Shipments during 2021 comprised 1.18-million tonnes of ilmenite, 52 900 t of primary zircon, 3 700 t of rutile and 41 800 t of concentrates.

“In 2021 we received higher average prices for all products compared to 2020 and the outlook for 2022 remains buoyant. We were delighted to return almost $100-million to shareholders during the year, through dividend payments and a share buyback, and we continue to target a 25% profit after tax total dividend payment in respect of 2021,” Carvill says.

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