Power supply challenges that have affected production at the Moma mine have been eased considerably with visibly improved power quality and consistency since December, enabling a production surge during the first quarter of the year.
Ore mined at Moma during the period increased 120% to 7 061 000 t from 3 211 000 t in the first quarter of 2015.
The company predicts that heavy mineral concentrate (HMC) will also benefit from an increase in grade from the latter part of the 2016 second quarter onwards.
HMC production increased by 90% to 274 800 t from 144 500 t reported in the first quarter of 2015.
Future plant availability is also forecast to improve, owing to the completion of mechanical reliability improvements. Additionally, further recovery improvement projects are being implemented throughout 2016 in the nonmagnetic section of the plant, which is processing rutile and zircon.
During the 2016 first quarter, rutile, which is a mineral composed primarily of titanium dioxide, saw a production decrease of 21% to 1 100 t from 1 400 t in 2015. Production of zircon, a gemstone, on the other hand, increased by 12% to 11 600 t from 10 400 t in the comparable 2015 quarter.
Zircon prices declined over the course of 2015 by about 10%. Although some of the larger producers sought to align production with market demand, increased supply from new producers, coupled with positioning by various producers for year-end sales, contributed to the softness, says Kenmare.
Further price weakness has been seen in recent weeks, owing to ongoing competitive tensions between major producers, Kenmare notes in an April 29 release.
Meanwhile, ilmenite saw a production increase of 39% to 185 000 t during the 2016 first quarter from 132 900 t in the same quarter of 2015.
Kenmare explains that there was a stabilisation of ilmenite prices in the first quarter of 2016 as reductions in ilmenite – a black mineral consisting of iron titanium oxide – production globally met with strong demand from pigment customers, who saw sales volumes increase by between 6% and 12% in the first quarter of 2016.
Offtake conditions have continued to improve following the end of the first quarter, resulting in the first tentative price increases for both domestically produced and imported ilmenite in the Chinese spot market. As the largest offtake market for sulphate ilmenite, the Chinese market conditions strongly influence global market price movements. Kenmare says stronger global pigment demand conditions should continue through 2016 and drive increased feedstock consumption.
“We are continuing to push down our costs to the extent possible and expect that, as volume increases throughout 2016, with the benefit of improved power and product recoveries, our unit cost a tonne of final product produced will continue to reduce,” said Kenmare Resources MD Michael Carvill.
The capital required to maintain production and operations in 2015 was $5.6-million as a result of stringent cost management, though it is expected to average $20-million a year in the medium term.
For the five-year period from 2011 to 2015, the average grade of each metal fed into the mill at the Moma mine was 5.2%. It is expected that, over the five years from 2016 to 2020, the average grade will decline to 4.5%. This decline in grade will require an increased mining fleet to maintain levels of HMC.
The capital expenditure (capex) required to enhance the mining fleet over this period is yet to be approved by the board and will be subject to market conditions. However, preliminary studies estimate the additional capex to be $100-million, over the five-year period. No material capex is expected prior to the fourth quarter of 2017.
The Namalope deposit, 50 km from Moma, will be mined until 2024 by wet concentrator plant (WCP) A and until 2020 by WCP B. The capital costs associated with the movement of the WCP from the Namalope deposit to the Nataka deposit, 60 km from Namalope, are in addition to the capital outlined to increase the capabilities of the mining fleet.
Source: Mining Weekly
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