Kenmare Resources reports operating loss of $17.9 million

Irish mining company Kenmare Resources has reported an operating loss of $17.9 million for the six months to June-end, down significantly from the $6.9 million profit it posted during the same period last year.

Revenues at the Irish and London listed company rose to $81.2 million (€51.5 million) in the first-half, up from $79.3 million in the first half of 2013.

Earnings before interest, taxation, depreciation and amortisation (EBITDA) were $2.3 million for the six month period, compared with $18.9 million in 2013.

The company said management has been conducting an in-depth review of operating costs and has instigated a cost reduction programme. This has realised an absolute cost reduction in the first half of 2014. Together with higher production volumes, this has contributed to a 14 per cent decline in operating costs per tonne of final products produced in the first half of 2014, compared to 2013.

Kenmare managing director Michael Carvill said revenues have remained broadly flat as higher sales volumes have been offset by a reduction in product pricing, particularly for ilmenite.

“A significant proportion of global production is struggling to cover cash operating costs, before debt service or return on capital: this is an unsustainable situation.”

He said the company expect results for the full year to benefit from a more favourable sales mix, increased volumes and targeted cost reductions.