JOHANNESBURG (miningweekly.com) – Following the completion of the 50% expansion of titanium minerals producer Kenmare Resources’ Moma mine, in Mozambique, the operation’s ore mined increased by 81% to 7.54-million tonnes during the first quarter of 2014, with further increases expected as the year progressed.
Heavy mineral concentrate production increased by 52% to 287 000 t during the three-month period, while ilmenite production was up 53% to 210 800 t, the company reported on Thursday.
Kenmare sales of finished products also increased by 299% to 193 900 t.
MD Michael Carvill told Mining Weekly Online in a telephonic interview that the company’s full-year ilmenite production was expected to be around one-million tonnes, adding that the company, however, did have the capacity and equipment to potentially produce more.
“[Further], given stable electricity supply to our mineral separation plant in 2015, we would hope to move our [ilmenite production] up to [but might not yet achieve] full nameplate capacity of 1.2-million tonnes,” he added.
Carvill added that during the first quarter of the year the Moma operation had some difficulties relating to the reliability of electricity; however, this had historically been the case during Mozambique’s summer months, when lightning often disrupted electricity supply, and was, therefore, expected.
“We knew that this quarter would be a lower production quarter than what we expect the rest of the year to be,” he stated.
To address these electricity supply problems Kenmare had signed a contract with temporary power and temperature control solutions provider Aggreko for the rental of a 7.5 MW diesel-powered electricity generation plant.
Carvill explained that this plant would be used to keep the Moma mineral separation plant running during the coming months.
“What we are intending to do is completely disconnect our mineral separation plant from [the] grid and power it with the diesel generator during the summer months, which are late November, December, January and February,” he said.
Kenmare expected to take delivery of the electricity generation plant by the second half of this year, but did not expect to need to use it before the summer period started.
“[With this plant], hopefully, next year we will not be subject to the same summer dip in operational performance that we have experienced for the past several years,” Carvill added.
Further, Kenmare was also undertaking a programme to reduce its operating and capital costs.
Carvill said the company, through an extensive formal process, was looking at every one of its systems to ensure that work was being done in the most efficient and cost-effective manner possible.
He explained that the company had been building the mine since 2004, with the expansion project having been ramped up towards the end of 2013. As a result, the company had been in a development and expansion stage for the past ten years and, therefore, this was the first time Kenmare had the opportunity to focus on cost and efficiencies.
“We don’t know how much money could be saved, but we do believe that there is some, maybe even a lot, because some of these areas have not yet been tackled,” Carvill said.
Meanwhile, in future, Kenmare would consider ways in which to increase the possible revenue it would derive from the market to ensure that the company benefitted as much as possible from every tonne produced, he added.
“This is quite a critical situation as, titanium feedstocks are at an cyclical low. [Therefore,] decisions have to be made about contracting forward, as you don’t want to lock in too much of your production at too low a price,” he explained.
Kenmare’s share price was up 10.2% by 15:30 on Thursday, following the company’s announcement.