16 Dec 2019
EAIF lends US$30 million to Kenmare Resources plc
Mozambique economic development, securing nearly 1,400 jobs
The Emerging Africa Infrastructure Fund (EAIF) is lending US$30 million to Kenmare Resources plc as part of the financing of a US$145 million expansion at the company’s Moma Mine, on the north east coast of Mozambique. Kenmare is repaying all previous loans from EAIF. The new US$30 million loan has a five-year term and is designated to meet the cost of the new infrastructure needed to move heavy equipment and provide electricity at the company’s new location.
Kenmare Resources plc is one of EAIF’s longest established commercial relationships. The Fund has supported the business for many years. It has seen Kenmare prosper, become a key player in Mozambique’s economy, a progressive employer and good corporate neighbour. In the middle part of this decade, EAIF was also able to assist the company during a lean period brought on by global market volatility.
“Kenmare Resources is buoyant and successful. Its new investment provides long-term job security for the workforce, extends the benefits Mozambique’s national finances enjoy from the company’s activities and brings new energy and transport infrastructure into the public realm. We are delighted to once again help Mozambique foster its economic and social stability,” says Martijn Proos of EAIF’s fund managers, Investec Asset Management.
Kenmare has established a reputation for supporting and initiating economic and social development programmes. Since 2004, the range and quality of the domestic infrastructure has steadily improved. All the villages in the area are now electrified, water access has been upgraded and mobile phone coverage is now universal. Primary schools have been built in 80% of the villages and in 2018 a vocational training centre opened. Kenmare also supports health care initiatives and facilities. In total to date, it has invested some US$8 million in community measures. Three-year strategic investment plans in economic development, education, health and education programmes are agreed through extensive consultation with communities.
Kenmare Resources plc is listed on the London Stock Exchange and the Euronext Dublin. Of its 1,433 employees, 1,398 are permanent staff based at the Mozambique location. 95% of employees are Mozambican nationals. Moma produces ilmenite, rutile and zircon, raw materials used in the production of ceramics, paint and a variety of household goods. Kenmare sends its output from its own nearby port on the Mozambique coast to customers in 15 countries worldwide.
The company’s new investment will see it complete one production site, open a new site at its current concession at Namalope and open up much larger new concession at Pilivili, some 20 km away. The overall aim of the business strategy is achieving an hourly production increase from 2,000 tonnes to 2,400 tonnes. The Moma Mine is estimated to have 100 years of reserves.
One of the company’s giant earth-moving machines, a Wet Concentrator Plant (WCP) is to be moved 20km on a new, purpose-built road and over a newly constructed causeway across the River Mualadi to Pilvili. The new road and causeway will be built to the high standards needed to allow the 7,000 tonne WCP to move safely to its new location. A specialist transporter used to move very large engineering structures will be used to carry the WPC along the new road. The transport infrastructure will become part of the public highway once the WCP has been moved, providing a significant economic development corridor for the local population and helping make the area more attractive to inward investors.
Investment in the Pilivili site will include other new production equipment and new energy infrastructure, which will also benefit adjacent villages.
Around 540 people are expected to be employed in the construction phases at both sites.
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