Strategic objectives
Kenmare's vision is to be a leading titanium minerals producer positioned in the first quartile of the industry revenue to cost curve.
We will deliver this vision through the Group’s strategy, which is focused on three pillars of operating responsibly, delivering long life, low cost production, and allocating capital efficiently.
Operating Responsibly
Sustainability is central to Kenmare’s business. The Company has a proven commitment to being a
trusted corporate citizen during its more than 30-year history and it aims to continually improve its
environmental, social, and governance performance. Kenmare’s sustainability strategy, comprised
of four strategic priorities, ensures it maximises value and creates opportunities from the Moma
Mine for the benefit of all stakeholders.
Priorities
We are focused on:
- Developing a safe and engaged workforce
- Supporting thriving communities
- Protecting a healthy natural environment
- Being a trusted business
Performance
Kenmare achieved an important safety milestone in December 2023, with two million hours worked without a Lost Time Injury (LTI) and zero LTIs in Q4. Three million hours without an LTI was achieved in late February 2024. Highlights of the year for the Kenmare Moma Development Association (KMAD), included a further three water supply systems constructed or repaired, taking the total number of wells drilled by KMAD to over 30 since 2004. KMAD also built a third community health centre and a contract was signed for the construction of a new district hospital. Kenmare maintained its B score for the Carbon Disclosure Project (CDP) climate questionnaire and achieved a B score for the water questionnaire, which the Company completed for the first time in 2023. Meanwhile, an audit of targeted suppliers to the Moma Mine achieved 84% compliance with Kenmare’s supplier Code of Conduct, compared to 79% in 2022.
Outlook
Kenmare intends to build on the strong safety performance achieved in the final months of 2023 and to continue to provide opportunities for the development of its workforce in 2024. KMAD will begin construction of the new district hospital as well as the electrification of five villages around Pilivili. Work will continue on the Company’s Biodiversity Offset Management Plan to deliver 15% Net Gain in biodiversity and on increasing the level of sustainability due diligence in its supply chain, looking beyond policy commitments to evidence of strategies, action plans and performance management. Kenmare continues to raise the standards it holds itself to and further details of its sustainability targets for 2024 and beyond can be found on page 58 and in the Sustainability Report.
Delivering Long Life, Low Cost Production
Kenmare is the world’s largest supplier of ilmenite and the Moma Mine is one of the largest titanium minerals deposits in the world. The Company has a first quartile position on the industry revenue to cost curve, allowing it to generate strong cash flow at all stages of the commodity price cycle. With over 100 years of Mineral Resources at the current production rate, Kenmare has significant potential for growth when market conditions are right.
Priorities
We are focused on:
Performance
HMC production in 2023 was 1,448,300 tonnes, a 9% decrease compared to 2022 (1,586,200 tonnes). Mining was impacted by an unusually severe lightning strike in February 2023 and power interruptions throughout the year, leading to a 4% decrease in excavated ore tonnes. Ore grades also fell by 5% due to WCP B mining a lower grade wetland area and WCP A mining lower grades as it approaches the end of its mine path in Namalope. Total cash operating costs of $228.1 million were up 4% on 2022 ($218.7 million), due to increased heavy mobile equipment rental, higher fuel costs, and costs associated with the severe lightning strike in Q1 2023.
Outlook
Preparations for the transition of WCP A to Nataka are expected
to advance significantly in 2024. The total capital cost of the
project to the end of 2027 is anticipated to be $326-341 million,
including up to $179 million to be incurred in 2024. Production in
2024 is anticipated to be in line with 2023 and Kenmare is focused
on maintaining its position as a first quartile producer on the
industry revenue to cost curve.
Allocating Capital Efficiently
Kenmare continuously assesses the best ways to deploy the capital generated from its activities to
ensure it creates value for all stakeholders. A strong balance sheet provides the platform to fund
the Company’s capital requirements, while a dividend policy was established in 2018 to provide
returns to shareholders. Kenmare also works hard to uncover, assess and develop value accretive
projects to deliver growth.
Priorities
We are focused on:
Performance
Kenmare finished 2023 with a strong balance sheet and net cash of $20.7 million. Total dividends are in line with 2022 at $50.0 million and dividends per share are up 3%, benefitting from the reduced share count following the share buy-back. This is in line with Kenmare’s dividend policy payout ratio of 20%-40% of underlying profit after tax, while also taking into account the Company’s operating performance and product market conditions.
Outlook
The Company continues to be focused on making shareholder returns, balanced with the necessary investment in the long-term future of the business. WCP A is expected to transition to the Nataka ore zone from late 2025 and the capital invested in this project will support future production from Moma. In addition, Kenmare’s corporate development team continues to assess potential opportunities for organic and inorganic growth.
