JOHANNESBURG (Reuters) - Mining company Kenmare Resources swung into profit and boosted production of ilmenite and zircon in its first half as prices for the minerals jumped.
The Mozambique-focused miner, which produces minerals used in paints, plastics and ceramics, said ilmenite production in the six months to June rose 25 percent to 504,800 tonnes. Zircon output increased by 32 percent to 37,700 tonnes.
“In terms of production, we achieved record volumes of ilmenite over the last 12 months but we don’t by any means see this as the end ... we think we have more to go,” Managing Director Michael Carvill told Reuters.
Higher prices for its minerals saw earnings before interest, taxation, depreciation and amortisation (EBITDA) reach $29.8 million, compared with a loss of $10.7 million a year earlier.
Prices for ilmenite, a titanium ore, shot up 61 percent while zircon gained 6 percent, Kenmare said.
The company had agreed further price increases in contract volumes for ilmenite in the second half but Chinese spot prices had softened recently, it said.
Kenmare flagged that it could defer or reduce spending as it assesses its options at the Moma titanium minerals mine in northern Mozambique due to declining grades.
“Overall a fair set of figures and in line with consensus,” Canaccord Genuity analyst Des Kilalea said.
“Positive is that the company has also indicated plans to change its mining programme to defer or reduce capex. This should please the market.”
Kenmare said it was on track to deliver its previously announced annual targets.
The company’s shares in London had inched up 0.4 percent by 1443 GMT, underperforming an index of larger peers, which rose 2.4 percent.
Reporting by Zandi Shabalala; Editing by Dale Hudson