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Kenmare confident despite 27% slump in production

Irish-owned titanium miner Kenmare Resources has said it is on course to meet targets even after a fall in production.

In the three months to June 30, the group reported a year-on-year decrease of 27% in heavy mineral concentrate (HMC) production to 274,700 tonnes.

This was due to a planned mining of lower ore grades, a situation which is expected to improve in the second half of the year, according to a trading update from the company.

Ilmenite production decreased 8% year-on-year to 220,100 tonnes, and there was a 6% decrease in primary zircon production to 11,000 tonnes.

Mozambique-focused Kenmare insisted, however, that it was "on track" to achieve its guidance for the year on all stated metrics.

Managing director Michael Carvill said: "Excavated ore volumes continued to increase during quarter two.

"The investments we are making to grow our mining capacity are already beginning to deliver.

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"Quarter two was the weakest quarter forecast for 2019 in terms of grade, which resulted in lower HMC production, but consequently higher grades are anticipated for the remainder of the year."

Mr Carvill, who is originally from Warrenpoint in Co Down, has been managing director of the company for 32 years.

On June 30, the business had a net cash position of $3.5m (£3.1m), a reduction on the net cash of $13.5m (£12.1m) on December 31 last year.

This was due to reduced shipments in the first half of this year and development capital expenditure on the company's growth projects.

Market conditions for ilmenite continued to improve in the second quarter, with further price strengthening continuing into the second half of this year, the group said.

The zircon market remained stable in the three months to June 30 and had strong long-term fundamentals, the company added.

Ilmenite is the feedstock for making titanium dioxide, which is used in a vast array of products, from toothpaste and cosmetics to paint and plastics.

As well as zircon, the Mozambique mine produces rutile. Zircon and rutile are used in items such as ceramics and paint respectively.

Mr Carvill's father, Charles, was chairman of Kenmare from 1986 to 2012 and was also a co-founder of Tara Exploration, which got one of Europe's largest lead and zinc mines, at Navan in Co Meath, off the ground.