Kenmare Resources suffers a massive $88.6 million loss, largely due to a $100 million write-off on mining assets.
Kenmare Resources Faces Challenges Amidst Ongoing Negotiations and Rising Costs
Kenmare Resources, the operator of the Moma titanium mine in southeast Africa, is currently engaged in protracted negotiations with the government of Mozambique to extend its mining contract, which is set to expire in 2022.
The company has been undergoing significant changes, with Tom Hickey taking over as CEO following the departure of Michael Carvill. Despite the challenges, Hickey remains optimistic, stating that Kenmare is open to future approaches.
The demand for Kenmare's products remains encouraging, and the company is well-capitalized to fund future shareholder returns, including an interim dividend of $0.10 per share. However, the first half of 2025 has not been without its difficulties.
Operating costs at Kenmare soared by 14%, reaching $150.5 million, primarily due to higher labor costs and production overheads. This increase in costs was reflected in the company's financial results, with adjusted earnings falling by 25% compared to the same period last year.
Kenmare also took a $100 million impairment charge on its mining assets in Mozambique, and lowered its future revenue assumptions due to uncertainty around the pricing of ilmenite. These factors contributed to an $88.6 million loss before tax in the first six months of 2025.
The bid from Carvill's consortium, which "shone a light on the fundamental value of the business" and "reminded people of the value that's there", was not successful. The consortium made it clear it would only proceed with a bid below its initial £473 million (€553 million) proposal.
Despite the financial challenges, Kenmare generated mineral product revenues of $159.6 million in the first half of 2025, an increase of 3%. However, the company's share price fell by 3.7% in early trading on Wednesday, and has decreased by around 9% over the past year.
Looking ahead, Kenmare plans to pay an interim dividend to shareholders. Hickey's optimism remains, with him stating that the company remains well-positioned to navigate these challenges and deliver value to its shareholders.
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