mozambiqueKenmare Resources

All data are collected in the Fiscal Year of 2008-2009.

Company Profile and History

Kenmare Resources plc is quoted on the official lists of the Irish and London Stock Exchanges. Kenmare's main asset is the Moma Titanium Minerals Mine, located on the coast of Mozambique.

The Moma Mine contains reserves of heavy minerals which include titanium, ilmenite and rutile, as well as zircon. At full production, the Moma Mine will produce 800,000 tonnes of ilmenite per annum. In addition, 56,000 tonnes of zircon and 21 000 tonnes of premium grade rutile will be produced per annum as co-products. To date, Kenmare has signed a number of multi-year off-take contracts for a significant component of ilmenite, rutile and zircon production with industry market lenders.

Kenmare was originally created as a junior oil explorer in Ireland and the current management team took control in 1987. Kenmare became involved in titanium minerals exploration in Mozambique in the 1980's, through drilling a medium-sized deposit at Congolone, 1 to the north of the Moma deposit, and still part of Kenmare’s reserves. From 1996 to 1999, BHP participated in the Moma Project as a joint venture partner. The joint venture was dissolved in April 1999 when BHP decided to exit the titanium minerals industry. During this period, drilling greatly expanded the known mineralisation to cover two coastal mineralised zones: Moma (the Namalope/Tupuito, Mualadi and Pilivili deposits), and Congolone (Marrua and Congolone deposits).

From 1999, Kenmare has focused on advancing the Moma Project towards project implementation. A Pre-Feasibility Study completed by GRD Minproc Limited in February, 2000 established the commerciality of the Moma Project. A Definitive Feasibility Study was completed by GRD Minproc Limited in February, 2001. A number of additional reports were prepared during 2002, including further testwork aimed at reducing capital and operating costs. Testwork was also conducted in 2003 by mineral technology specialist, Roche Mining, which resulted in an increased estimation of the level of zircon to be produced at Moma.

Full ramp up is expected by end of 2009.

In Country Location

The Moma mine site is located North East of the town of Moma on the North Eastern coast of Mozambique.

Maputo Office: Rua de Chuindi, No.67, R/C, Maputo, Mozambique;
Telephone: +258 21 494921/499701
Telefax: +258 21 499731

Services and Products

The principal activity of Kenmare Resources is the operation of the Moma Titanium Minerals Mine. The 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.

Number of Employees

444 employees at the mine

Financial Information

The profit after tax for 2008 was US$0.3 million and arises from deposit interest earned and foreign exchange gains, less corporate and exploration costs. During 2008, operating and financial costs net of revenue earned for the period, totalling US$60.1 million, were capitalised in property, plant and equipment as construction was not yet complete and as the mine was not yet capable of operating close to design capacity. Senior and subordinated loans drawn at the yearend amounted to US$334.8 million, US$121.7 million of which were Euro-denominated loans.


As for revenue, Kenmare has marketing agreements in place covering around 60 percent of the first five years production from the mine, with the majority of 2009 production covered by existing contracts. All existing contracts are fixed volume, based on either agreed or market prices, and according to the company, a year's output at full production should attract revenue of around US$120 million at current contract prices. A recent research note suggests contract prices of US$93, US$825 and US$560 for ilmenite, zircon and rutile respectively and operational costs at full production of US$48 million, leading to potential gross profits in the region of US$72 million.

Market Share

Moma is the first modern large-scale mine to be developed in Mozambique. Containing 100 years of JORC compliant Ilmenite resources, the Moma mine will produce 8 percent of the world’s annual supply of titanium minerals.

Business Objective

According to the company - “The principal business objective of Kenmare is to ramp-up production to 800,000 tonnes per annum of ilmenite plus co-products zircon and rutile. Further expansion opportunities are being considered in order to maximise the value of the world-class mineral reserves at the mine”

Business Model

According to analysts, Kenmare has a narrow but focused and appropriate strategy for a mid-tier mining company which owns outright such a major resource-minimising costs, maximising operational efficiency and ensuring the company stands on a sound financial footing.

Addressing all of these issues is the company’s performance improvement project (PIP) which comprises 42 separate projects and was instigated after numerous issues were experienced with its turnkey contractor. Kenmare has completed 95 percent of the PIP which, when completed, will remove the barriers to achieving its near-term target annual output of 800,000 tonnes of Ilmenite. This in turn ensure that Moma is highly cash generative and thus able to start both its expansion programme as well as the phased repayment of the project finance which has been accumulated in order to bring Moma into production.

According to Kenmare, key steps to ensure that its business objectives are realised are:

  • Manage the financing and construction of the Moma titanium mineral sands project;
  • Assume operational control of the mine when it has been constructed; pursue in due course "optimisation" strategies at Moma which may include, i) an expansion of initial capacity, and ii) improvements in operating efficiency; and
  • Review new business opportunities, including i) opportunities for vertical integration aimed at capturing potential market synergies, ii) new project appraisal 

Ownership of Business

Kenmare Resources has a 100 percent equity position in Moma Sands.

Major Shareholders

As at 14th April 2009 the following held in excess of 3 percent of the issued ordinary shares of the Company.

No. of Ordinary Shares % of Issued Share Capital
Nortrust Nominees Limited 130,625,480 16.42%
State Street Nominees Limited 51,336,000 6.45%
HSBC Global Custody Nominee (UK) Ltd 39,212,500 4.93%
Nederlandse Financierings - FMO 37,433,541 4.71%

Benefits Offered and Relations with Government

Kenmare and the Government of Mozambique signed two key Agreements in January 2002, which paved the way for the financing of Kenmare's Moma Titanium Minerals Project. The Agreements are a modified Mineral Licensing Agreement which includes enhanced provisions to protect lenders to the Project and the Implementation Agreement governing the operation of an Industrial Free Zone which covers the processing and exporting aspects of the Project.

Together these Agreements provide an attractive tax environment, free access to foreign exchange and guaranteed stability.

In December 2000 the Government of Mozambique approved a favourable tax status for the Moma Titanium Minerals Project. The Project Company was granted Industrial Free Zone (IFZ) status, which means that the Project processing plant will be exempt from corporation tax, import duties, export duties and Value Added Tax. The processing company will pay 1percent turnover tax after year six of production. The company has a 50 percent reduction in tax for the first 10 years following production start up, is subject to a 3 percent royalty on minerals sold and then an additional 1 percent revenue charge after 6 years of production.

In January 2001 Kenmare and the Mozambican Government signed a Mineral Licence Agreement (MLA). This agreement formally grants Kenmare the right to mine titanium minerals on terms that support the rapid development of the Project. It provides for the conversion of the existing exploration licences to a mining licence which is an important component in the Definitive Feasibility Study. The MLA covers an initial period of 25 years of mining, and is renewable thereafter. It grants Kenmare rights over a total area of 100 518 hectares. This licence includes an initial mining area of 15 240 hectares and allows for significant future resource expansion. The MLA provides rights to Kenmare which will facilitate the operation of the mine and protect the capital investment necessary to create it, including security of tenure, land access, water use rights and employment of personnel.

A Power Supply Agreement was signed in January 2003 between Kenmare and the Mozambican State-owned utility, Electricidade de Mozambique. This agreement, covering a 20 year period, sets out the terms and conditions for the provision of this power and ensures that the Project will pay a highly competitive tariff for the power supplied.

Product Development

Kenmare believes its current output ceiling of 800,000 tonnes is achievable during the 2010 financial year. An expansion programme is looking to increase annual Ilmenite output to 1.2 million tonnes within the next 3years, with the further possibility of 1.8 million tonnes beyond this.