Titanium miner Kenmare Resources said that 2020 was a strong year for the titanium feedstocks market, with Kenmare achieving higher average prices for its ilmenite and rutile products compared with 2019.
However, zircon prices decreased for the second consecutive year due to continued oversupply in the market.
Despite the disruption caused by the global Covid-19 pandemic, Kenmare said that demand for ilmenite remained strong in the first half of 2020.
It reported a marginal softening in the third quarter of 2020, but market conditions tightened strongly in the fourth quarter, which delivered a 5% increase in average received prices over the previous quarter.
Kenmare, which operates the Moma Titanium Minerals Mine in northern Mozambique, said this momentum has continued into 2021.
The company said the fourth quarter of 2020 was the strongest quarter of the year for production and shipments, as expected. It benefitted from the higher ore grades being mined by the Wet Concentrator Plant at Pilivili and calmer sea conditions.
Kenmare's total shipments of finished products of 853,100 tonnes was down 17% on the 1,029,300 tonnes shipped in 2019 due to poor sea conditions and works to upgrade transhipment capacity.
Michael Carvill, Kenmare's managing director, said the fourth quarter of last year was a pivotal quarter for the company as it began mining the Pilivili ore zone.
This followed the successful move of Wet Concentrator Plant B in the third quarter.
"WCP B began operating in late October and made a significant contribution to our best production quarter of 2020, benefitting from exceptionally high grades mined. It was also pleasing to see a strong quarter for shipments, with over 300,000 tonnes shipped during the period," Mr Carvill said.
He said the company achieved or exceeded the midpoint of its August 2020 guidance ranges for all finished products and is targeting an uplift of ilmenite production in 2021 of between approximately 45% and 60%.
"In addition to higher revenues, increased production will deliver lower unit costs, significantly increasing cash flows and bringing us closer to our target of becoming a first quartile producer on the industry revenue to cost curve," the managing director said.
Mr Carvill said that global demand for ilmenite - Kenmare's primary product - exceeded supply in the fourth quarter of 2020 and led to significant price increases.
"Following our second and third consecutive dividends paid in 2020, these positive operational and market dynamics are expected to support increased cashflow, and in turn our objective to increase shareholder returns," he added.