Kenmare chairman buys into recovery

The company mines ilmenite in Mozambique, which is used in paint pigment. It provides around 7 per cent of global supply of titanium feedstocks, so a hit to demand would be a major issue for Kenmare.

However, the upside of the relatively small market compared with other commodities is that Covid-19 has also impacted supply. Kenmare said this month “reduced new production coming on stream” would keep prices stable. The company has forecast that demand will outpace supply, although it estimates steady growth from the current 8m tonnes a year demand for TiO2, or titanium feedstock. 

Part of the new supply uncertainty comes from Kenmare’s own expansion plans this year. The company was on track to increase output from its Moma mine in Mozambique by shifting to a new area of mineral sands and moving its massive wet concentrator plant B in a $106m (£86m) plan, but this is now in question because of Covid-19 restrictions. There is limited exposure to the virus itself in Mozambique, but equipment and people need to come onto site to make it happen. 

The share price dropped around 40 per cent through February, to 170p, but has since come back to 220p. Chairman Steven McTiernan came in after the rise had started, buying two lots of shares on 20 and 21 May at a total value of £99,760.