Kenmare Resources (LON:KMR) management used its investor presentation alongside final results to emphasize a sharper focus on liquidity and balance sheet resilience amid weak titanium minerals pricing, geopolitical volatility, and ongoing uncertainty around a long-running implementation agreement with the Mozambican government.
Chief Executive Tom Fitzgerald described the Moma mine as a long-life asset with “100 years of mineral resources,” but said near-term actions are aimed at preserving financial flexibility through a “value over volume” approach, tighter cost control, reduced capital spending, and the suspension of the dividend.
2025 results reflected weaker pricing, lower shipments, and a large impairment
McCullough said unit costs rose 11% in 2025, partly due to lower production volumes. EBITDA fell to $58 million from $157 million a year earlier, and Kenmare reported a loss after tax of $24 million. The company also recorded an impairment charge of $301 million, described as “majorly market driven” due to weakening price expectations, with additional adjustments related to costs and anticipated changes in implementation agreement terms.
Capital expenditure totaled $205 million, including about $156 million of development CapEx related to the WCP A upgrade project and $49 million of sustaining CapEx. Net debt ended the year at $159 million, reflecting peak capital spend and weaker market conditions, with a closing cash balance of about $49 million.
Liquidity measures: cost cuts, lower 2026 CapEx, and dividend pause
Fitzgerald said Kenmare is prioritizing liquidity and the balance sheet, calling the decision to retrench 15% of site colleagues and pause the dividend “regrettable,” but necessary given uncertainty in markets and around Mozambique’s fiscal and licensing framework.
Management guided that 2026 CapEx will be sharply lower, with McCullough outlining total capital guidance of $60 million, split evenly between development and sustaining capital. He said development capital is front-end weighted and includes a rollover of $12 million from 2025. Fitzgerald stated 2026 CapEx will be about 70% lower than 2025.
On financing, McCullough said Kenmare secured a covenant reset with lenders for 2025, moving net debt-to-EBITDA from 2x to 3x, and is in discussions on appropriate covenant levels for 2026. In Q&A, management said there was no fee for the 2025 covenant amendment, though lenders are compensated through interest and other fees. McCullough also noted the company’s going concern statement includes a “material uncertainty” tied to implementation agreement outcomes and broader market and geopolitical risks, though the going concern basis was signed off subject to successful outcomes on those uncertainties.
When asked why the dividend was fully halted rather than reduced, Fitzgerald said the company is “pulling every lever” to preserve cash amid uncertainty. McCullough added that the revolving credit facility includes distribution covenants, which can be subject to waivers and consents, but that the chosen approach was prudent given the broader context.
Operations: lower mining rates, improved safety, and WCP A commissioning progress
COO Ben Baxter said 2025 production was impacted by the WCP A upgrade, resulting in heavy mineral concentrate (HMC) production 15% lower year-over-year due to reduced mining rates. He highlighted commissioning of a selective mining operation (SMO), which met its 50,000-ton HMC target and is expected to be further developed.
Despite lower HMC, Baxter said finished products were down 10% year-over-year, helped by higher draws from intermediate stocks and the introduction of a new product, ZrTi, which “materially exceeded” concentrate guidance and was well received by customers. Zircon production met original guidance due to strong recoveries in the mineral separation plant and the drawdown of intermediate stocks.
Shipments fell 13% year-over-year due to worse-than-expected weather in the first half, dry docking of a transshipment vessel for five-year recertification between June and September, and a customer being unable to take volumes in the fourth quarter. Baxter said higher finished product stocks entering 2026 support shipment guidance of more than 1.1 million tons, representing a 15% expected increase versus 2025. Management said year-to-date 2026 shipping is consistent with that run rate, with a focus on inventory reduction.
On the WCP A upgrade, Baxter said major construction and installation are complete and handed over to operations. While commissioning challenges extended into the first quarter of 2026, he said the plant is now regularly operating at its nameplate 3,500 tons per hour. Rectifications—such as winch brake work, software changes, cooling and pumping improvements, and tailings-related upgrades—were described as low-cost and covered within existing project budget and contingencies. Baxter said the project remains on a $341 million budget and is “materially de-risked,” with more than 80% of capital spent in 2025.
Market conditions: ilmenite weakness persists; zircon shows “green shoots”; ZrTi demand builds
General Manager of Marketing Cillian Murphy said 2025 was challenging across product markets, pointing to slow housing markets in major economies and increased Chinese supply—both from imported concentrates upgraded in China and growth in China’s domestic ilmenite—contributing to oversupply, particularly in ilmenite.
Murphy said the market started 2026 on “a soft footing,” and management expects 2026 prices to be lower than 2025, particularly for ilmenite. He attributed weaker realized prices in the first quarter partly to cancellations and postponements that pushed Kenmare toward spot sales with late notice. In contrast, Murphy said zircon prices stabilized in late 2025 and that price increases have been announced for the second quarter of 2026; he noted Kenmare has already agreed a Q2 price increase on one zircon product, and suggested announced increases are generally in the 5%–10% range, closer to 5% depending on market.
Murphy also addressed supply discipline. In Q&A, he estimated 5%–10% of global ilmenite supply has come off-stream due to production cuts and issues, with Kenmare “towards the upper end” of that range. He said the company does not expect that supply to return in the short term and expects tightening effects to develop through 2026, similar to what the company is observing in zircon.
ZrTi was a major theme in the discussion. Baxter and Fitzgerald said Kenmare shipped more ZrTi in the first three months of 2026 than in all of 2025, supporting its “value over volume” approach and helping offset customer shipment disruption. In Q&A, Murphy confirmed ZrTi contains small amounts of monazite, which in turn contains rare earth elements, and said the product is sold with value attributed to those rare earths. Management clarified that ZrTi is not necessarily higher-priced, but described it as a margin enhancement opportunity that Kenmare had not previously pursued.
Murphy also updated investors on a customer in financial distress. He said Kenmare had retained title to two shipments; payment has been received for one shipment valued at $4.6 million, and the company is arranging to retake control of the second stockpile, which he said had not been touched.
Mozambique implementation agreement: royalty applied; negotiations ongoing; arbitration remains an option
Fitzgerald reiterated that talks continue with the Mozambican government on an implementation agreement and license renewal. He said tax authorities had moved to impose a 2.5% royalty “prematurely” in Kenmare’s view, before full negotiations were complete, though he noted the 2.5% level was consistent with a prior Kenmare proposal and has been accrued in the financial statements. He said there have been no other moves toward implementation and that both sides remain focused on a negotiated outcome, though he provided no firm timeline.
Fitzgerald said Mozambique’s president has spoken positively about Kenmare and expressed an expectation that issues could be resolved without arbitration. Still, he said arbitration remains on the table if needed. In Q&A, Fitzgerald said arbitration under ICSID rules in Washington could take up to two years, though the company could seek interim measures that would return the situation to the prior operating status quo if granted. He said the parties have agreed arbitration as the dispute settlement route and that outcomes would be binding.
