Ilmenite market conditions remained challenging, zircon market continued to tighten in Q3 – Kenmare

In its third-quarter production report, Kenmare explains that prices for zircon increased again as the zircon industry continued to tighten.

Additionally, titanium feedstock availability in China remained elevated, supported by increased ilmenite production from imported concentrates and domestic mines. The company says this additional supply continued to displace demand for imported ilmenite and meant ilmenite prices remained depressed.

Demand from the titanium dioxide pigment sector continued to be mixed, with a subdued near-term demand outlook in Western markets. However, in China, continued growth in chloride pigment production supported consumption of ilmenite suitable for beneficiation, such as Kenmare’s.

Kenmare says elevated sulphuric acid costs weighed on sulphate pigment producers’ margins, although acid prices have recently eased. Demand for feedstocks from the titanium metal sector also remained robust.

Kenmare notes it has been in ongoing discussions with the proposed buyer of a customer’s Malaysian operations, which are in the process of being restructured, about recovering value from an ilmenite shipment made in the third quarter of 2025.

The company says the relevant volumes are reflected in its finished product stockpiles and Kenmare expects to conclude a sale in due course.

Moreover, Kenmare notes that the zircon market continued to strengthen during the third quarter of this year. This improvement was principally supply-led, reflecting reduced production and tighter availability outside China.

The company says underlying demand remained subdued, particularly from the ceramics sector.

Looking ahead, Kenmare says market conditions for titanium feedstocks are expected to remain weak in the fourth quarter.

Kenmare says its average ilmenite price received is expected to be lower quarter-on-quarter, reflecting soft market conditions and an anticipated lower value sales mix.

Conversely, Kenmare expects a further improvement in zircon prices in the fourth quarter, with constrained supply continuing to support the market.

PRODUCTION RESULTS

In the production report, Kenmare notes that its ilmenite production for the year is expected to be between 710 000 t and 750 000 t, compared with the about 800 000 t previously guided. This is owing to ongoing commissioning challenges at wet concentrator plant (WCP) A at the Moma titanium minerals mine, in northern Mozambique.

The company says full-year guidance for primary zircon and rutile production remains unchanged and guidance for concentrates production was exceeded in the first half of the year, owing to strong zirconium/titanium (ZrTi) production.

The company says it expects total cash operating costs to be towards the upper end of the guidance range of $215-million to $225-million.

Kenmare notes that heavy mineral concentrate (HMC) production was 334 100 t in the third quarter of this year, a 12% increase year-on-year, owing to a 22% increase in excavated ore volumes.

This was partly offset by an expected 12% decrease in excavated ore grades, primarily owing to WCP A reaching the end of its mine path in Namalope.

Ilmenite production was 233 600 t, up 12% year-on-year, primarily owing to a 19% increase in HMC processed. Kenmare MD Tom Hickey says Ilmenite production strengthened materially in the third quarter of this year, rising almost 60% compared to the second quarter, owing to increased excavated ore volumes at all three WCPs.

Primary zircon production was 13 000 t, up 6% year-on-year, and rutile production was 2 200 t, up 22% year-on-year, also owing to the increased HMC processed.

While performance and recoveries for all final products improved year-on-year, Kenmare explains that the third quarter of 2025 benefitted from the reprocessing of intermediate stockpiles, masking the significantly lower HMC processed.

Concentrates production was 44 500 t, up 109% year-on-year, primarily owing to increased ZrTi production, now that it is recognised as a commercial product.

Total shipments of finished products in the third quarter of this year were 242 900 t, up 7% year-on-year. The company says this represented a consistent performance during what is typically a challenging quarter for weather, with no dry dock impact in the third quarter of this year compared to the third quarter of 2025.

However, Kenmare says third-quarter shipments were below the run rate required to achieve the previous guidance of above 1.1-million tonnes for the reasons outlined above.

Kenmare says it expects shipments, the key guidance metric for the year, to be about 1.05-million tonnes this year.

This is owing to delays at other ports during the third quarter, causing customer vessels to arrive late at Moma and, consequently, limiting loading time, and operational protocols in place to ensure product quality, restricting the loading of different products at the same time.

Kenmare says that, if it had been able to load as usual during these times, the company believes it would have achieved in excess of 1.1-million tonnes of shipments for the full-year.

Shipments in the third quarter of this year included 196 300 t of ilmenite and 46 400 t of concentrates, principally comprised of ZrTi, in addition to an adjustment of 200 t of primary zircon.

Closing stock of HMC at the end of the third quarter of this year was 35 100 t, compared to 37 800 t at the end of the second quarter of this year, owing to HMC consumption slightly exceeding HMC production.

Closing stock of finished products at the end of the third quarter this year was 284 200 t, compared to 233 500 t at the end of the second quarter, owing to production exceeding shipments.

Meanwhile, the company also completed a prefeasibility study (PFS) during the period to investigate the potential to realise greater value from the rare earth elements within the Moma deposit.

The company says the PFS demonstrated an opportunity to produce up to 4 000 t/y monazite for a low capital outlay, thereby generating significant incremental long-term value from the Moma orebody.

Hickey says the company is now starting a definitive feasibility study (DFS), in conjunction with ongoing commercial discussions with potential offtake partners. Kenmare says the DFS is expected to take up to one year, with first production expected about two years after the decision to proceed is made.

WCP A

In the report, Kenmare notes that it continued to progress towards achieving nameplate capacity at WCP A during the third quarter. The company explains that, in the first half of the year, the key challenge impacting performance related to the dredges and improvements were realised during the third quarter.

Kenmare says it has been working intensively with the dredge supplier to support stronger winch brake performance and dredge pump configuration.

As a result of this, the supplier has implemented an effective interim software solution for the winch brakes, thereby achieving greater resilience; a permanent solution is expected on the first dredge by year-end.

The supplier is also working with Kenmare to improve mining rates, with a focus on understanding flow restrictions. Specialists from the supplier are on site at Moma and modifications to the pump control system are being developed.

Downstream improvements on the WCP A plant have also been made throughout the quarter, with debottlenecking and reliability improvements implemented successfully.

Kenmare says off-plant tails management continued to perform strongly, with the densification paddock and tailings storage facility also working well.

The company says improvements in throughputs and utilisation rates were recognised at WCP A as a result of these actions.

WCP A operated at 3 100 t/h at a utilisation rate of 49% during the quarter, compared with about 2 760 t/h and a 42% utilisation rate in the first half of the year, contributing to the increase in excavated ore.

The company says further improvements are expected in the fourth quarter, with nameplate capacity now expected to be achieved consistently in the first half of 2027.