KENMARE Resources expects two years of lower-grade mining as it transfers to Nataka, the ore zone that will support production at Moma, its Mozambican mine, for decades.
The company has begun the switch from the Namalope zone to Nataka, COO Ben Baxter told investors following Kenmare’s third-quarter production update on Thursday. "There’s this transition that we have to get through of approximately two years of low grades before we get to what we would call Nataka proper,” Baxter said.
Once Kenmare reaches Nataka proper, grades are expected to rise to about 3% and remain at those levels for “multi decades”, he said.
Nataka contains about 70% of Moma’s mineral resources and is central to Kenmare’s long-term production plans.
Dublin-based Kenmare, which is listed in London and Dublin, produces ilmenite, zircon and rutile at Moma. Ilmenite, its main product, is used largely to make titanium dioxide pigment for paints, plastics and other products, while zircon is used mainly in ceramics, and rutile is another source of titanium.
On October 6, Kenmare said it had received a takeover proposal from International Resources Holdings (IRH), an Abu Dhabi company. Shares in the company are 29% higher since the announcement.
In order to move to Nataka, Kenmare is trying to overcome commissioning at Wet Concentrator Plant A (WCP A), its largest mining plant, which has taken longer than expected to reach its full operating rate.
Kenmare cut its 2026 ilmenite production forecast on Thursday to between 710,000 and 750,000 tons, from about 800,000 tons previously. Its internal forecast was towards the upper end of the new range.
Third-quarter ilmenite production nevertheless improved sharply to about 234,000 tons, up almost 60% from the second quarter, helped by improved performance at WCP A.
The plant operated at about 3,100 tons an hour during the quarter, with utilisation of 49%. Kenmare expects further improvements during the fourth quarter and expects WCP A to consistently reach its 3,500 ton-an-hour nameplate capacity during the first half of 2027.
Kenmare also reduced its 2026 shipments estimates by about 50,000 tons to 1.05 million tons after late-arriving vessels disrupted its shipping schedule.
The company said demand for its products remained stable, although the ilmenite market continued to be impacted negatively by oversupply and weak prices.
Further out, Kenmare is examining a lower-capital route to developing Congoloni, a high-quality ilmenite and zircon deposit that it regards as a long-term growth opportunity.
Baxter said Kenmare had completed pre-feasibility work on Congoloni and was reviewing whether it could use smaller, lower-cost Selective Mining Operations to develop the deposit.
“We see that Congoloni has a lower capital opportunity by using the SMO style of mining,” he said.
Kenmare’s other wet concentrator plants, WCP B and WCP C, also have multi-decade mining pathways, Baxter said. A future relocation of WCP C was expected to require capital in the “low tens of millions” of dollars rather than the substantially larger expenditure required for the WCP A move.
Implementation Agreement
Meanwhile, Kenmare said it remained hopeful of resolving its long-running Implementation Agreement with the Mozambican government in the near term.
The agreement governs Moma’s processing and export activities, including royalty arrangements. It is separate from the framework covering the mine itself.
Kenmare MD Tom Hickey said Kenmare’s mining agreements were more conventional than the Implementation Agreement.
“Our mining agreements are more standard. They are very clear in terms of the renewal terms, and they’re probably even stronger in terms of protections that they confer on us,” he said.
Hickey said Kenmare was hopeful the eventual renewal would be “a more straightforward process” and would not be as prolonged as the Implementation Agreement negotiations.
The company has continued operating under the old Implementation Agreement terms since the agreement nominally expired at the end of 2024.
Hickey said Kenmare believed it was “pretty much at the stage where we have a final position” on the Implementation Agreement. He cautioned, however, that the company had received no official notification after a Mozambican government spokesman was reported as saying the agreement had been finalised and would soon be approved.
Hickey said concluding the agreement would put Moma on a firm platform for the next 20 years of operations.