ANNUAL REPORT AND ACCOUNTS 2023
RESPONSIBLY MEETING GLOBAL DEMAND
FOR QUALITY-OF-LIFE MINERALS
ANNUAL REPORT AND ACCOUNTS 2023
Read Kenmare’s
Sustainability
Report 2023
RESPONSIBLY MEETING GLOBAL DEMAND
FOR QUALITY-OF-LIFE MINERALS
SUSTAINABILITY REPORT 2023
SUSTAINABILITY REPORT 2023
For more information visit:
www.kenmareresources.com
Kenmare Resources Plc
@KenmareResourcesplc
@KenmareRes
KENMARE’S PURPOSE
RESPONSIBLY MEETING
GLOBAL DEMAND FOR
QUALITY-OF-LIFE MINERALS
Who Kenmare is
Kenmare Resources plc is one of the world’s largest
producers of mineral sands products. Listed on the
London Stock Exchange and Euronext Dublin, the
Company operates the Moma Titanium Minerals Mine,
which is located on the north east coast of Mozambique.
Kenmare’s mineral sands products are key raw materials
ultimately consumed in everyday “quality-of-life” items
such as paints, plastics and ceramic tiles. The Moma
Mine has been in production for 17 years and Kenmare
has a long-standing commitment to being a responsible
corporate citizen.
What Kenmare does
Kenmare’s production in 2023 accounted for
approximately 7% of global titanium feedstocks,
supplying over 25 customers operating in more than
15 countries. The Mine has Mineral Resources sufficient
to support production for more than 100 years at
current rates.
How Kenmare does it
Kenmare has three mining ponds where dredges mine
titanium-rich sands. Three to five percent of the ore
contains valuable heavy minerals, which are removed
and separated at its Mineral Separation Plant into
four final products: ilmenite, zircon, rutile and mineral
sands concentrate. These products are then loaded
onto ocean-going vessels at its dedicated port facility.
After mining, Kenmare rehabilitates the land, and it is
progressively returned to the local community. Kenmare
is proud of its low environmental impact, with hydro-
electric power providing half of its overall energy
requirements and over 90% of its electrical power
consumption, and with no toxic chemicals used in its
operations.
Read Kenmare’s
KMAD Report
2023
ANNUAL REPORT 2023
Learn more about Kenmare’s products
on pages 16 to 17
KENMARE’S GUIDING PRINCIPLES THAT
INFORM EVERYTHING THE COMPANY DOES:
We
Care
We
Grow
We
Excel
WELCOME TO THE
2023 ANNUAL REPORT
Contents
Business overview
Highlights 01
Kenmare’s unique value proposition 02
2023: A year in review 04
Strategic report
Chairman’s statement 08
Managing Director’s statement 12
Kenmare’s products 16
Kenmare’s business 18
Stakeholder engagement 22
Kenmare’s business model 24
Kenmare’s strategy 26
Market report 30
Key performance indicators 36
Kenmare’s operations 40
Operating process 42
Operating review 44
Mineral Reserves and Resources 48
Financial review 52
Sustainability 58
Principal risks and uncertainties 76
Viability statement 86
Governance
Governance at a glance 90
Board of Directors 92
Executive Committee 94
Corporate governance report 96
Nomination Committee report 110
Sustainability Committee report 114
Audit & Risk Committee report 118
Remuneration Committee report 124
Annual report on remuneration 128
Directors’ report 140
Group financial statements
Statement of Directors’ responsibilities 146
Independent auditor’s report 147
Consolidated statement of
comprehensive income 154
Consolidated statement of financial position 155
Consolidated statement of changes in equity 156
Consolidated statement of cash flows 157
Notes to the consolidated financial statements 158
Company financial statements
Parent Company statement of financial position 190
Parent Company statement of changes in equity 191
Notes to the Company financial statements 192
Other Information
Shareholder profile 200
Glossary – alternative performance measures 201
Glossary – terms 203
General information 206
2023 highlights
LOST TIME INJURY FREQUENCY RATE
0.15
Per 200,000 hours worked
SCOPE 1 CARBON EMISSIONS
57,141
tonnes CO
2
e
PRODUCTION OF FINISHED PRODUCTS
1,091,500
tonnes
SHIPMENTS OF FINISHED PRODUCTS
1,045,200
tonnes
REVENUE
$458.4
million
EBITDA
$220.3
million
PROFIT AFTER TAX
$131.0
million
DIVIDEND PER SHARE
USc56.04
BUSINESS OVERVIEW
01
Kenmare Resources plc Annual Report and Accounts 2023
A lasting social impact
Sustainability is central to every aspect of how Kenmare operates, whether it is
the safety and health of its employees, potential impacts to the environment, or
how the Company relates to its host communities.
1,708
People employed
by Kenmare at end 2023
$4.7m
Investment by KMAD
in 2023
A small environmental footprint
Kenmare aims to reduce emissions from its already low carbon intensity
operations. Through decarbonisation and active offsetting, the Company has an
ambition to achieve Net Zero on Scope 1 and 2 emissions by 2040.
204,000
Trees planted in 2023
>90%
Electricity provided by
renewable sources
A globally significant
titanium minerals deposit
The Moma Mine hosts one of the world’s largest resources of titanium minerals.
At current production rates, Moma’s mine life exceeds 100 years. This provides
growth optionality as global demand increases and other mines deplete.
>100yrs
Life of mine at current
production rate
9.0bnt
Moma’s Mineral Resources
A market-leading position
Kenmare is the world’s largest supplier of ilmenite, the primary mineral used in
the production of titanium dioxide. Titanium dioxide is a bright white pigment
consumed in the production of paints, paper and plastics. Demand for these
“quality-of-life” minerals has grown steadily over time.
7%
Of global titanium
minerals are produced
at Moma
$4.4bn
Titanium feedstocks
industry revenue
Significant shareholder returns
Kenmare aims to return value to its shareholders through a combination of
dividends, share buy-backs and capital appreciation. The Company has a
dividend policy to pay out 20%-40% of underlying profit after tax. Since 2019,
cumulative returns to shareholders exceed $250 million, including the 2023
dividend.
$50.0m
2023 dividend
distribution
>$250m
Returned to shareholders
since 2019
A strong balance sheet
Kenmare intends to maintain its strong balance sheet to fund healthy returns
to shareholders, the capital requirements of the business and the next phase of
growth.
$20.7m
Net cash at
31 December 2023
50%
2023 EBITDA margin
KENMARE’S UNIQUE VALUE PROPOSITION
WITH A COMMITMENT TO RESPONSIBLE BUSINESS PRACTICE,
A MINE LIFE OF OVER 100 YEARS, A 17-YEAR PRODUCTION TRACK
RECORD AND A STRONG BALANCE SHEET, KENMARE HAS A UNIQUE
VALUE PROPOSITION.
Operate
responsibly
Deliver
long-life, low-
cost production
Allocate capital
efficiently
02
Kenmare Resources plc Annual Report and Accounts 2023
A lasting social impact
Sustainability is central to every aspect of how Kenmare operates, whether it is
the safety and health of its employees, potential impacts to the environment, or
how the Company relates to its host communities.
1,708
People employed
by Kenmare at end 2023
$4.7m
Investment by KMAD
in 2023
A small environmental footprint
Kenmare aims to reduce emissions from its already low carbon intensity
operations. Through decarbonisation and active offsetting, the Company has an
ambition to achieve Net Zero on Scope 1 and 2 emissions by 2040.
204,000
Trees planted in 2023
>90%
Electricity provided by
renewable sources
A globally significant
titanium minerals deposit
The Moma Mine hosts one of the world’s largest resources of titanium minerals.
At current production rates, Moma’s mine life exceeds 100 years. This provides
growth optionality as global demand increases and other mines deplete.
>100yrs
Life of mine at current
production rate
9.0bnt
Moma’s Mineral Resources
A market-leading position
Kenmare is the world’s largest supplier of ilmenite, the primary mineral used in
the production of titanium dioxide. Titanium dioxide is a bright white pigment
consumed in the production of paints, paper and plastics. Demand for these
“quality-of-life” minerals has grown steadily over time.
7%
Of global titanium
minerals are produced
at Moma
$4.4bn
Titanium feedstocks
industry revenue
Significant shareholder returns
Kenmare aims to return value to its shareholders through a combination of
dividends, share buy-backs and capital appreciation. The Company has a
dividend policy to pay out 20%-40% of underlying profit after tax. Since 2019,
cumulative returns to shareholders exceed $250 million, including the 2023
dividend.
$50.0m
2023 dividend
distribution
>$250m
Returned to shareholders
since 2019
A strong balance sheet
Kenmare intends to maintain its strong balance sheet to fund healthy returns
to shareholders, the capital requirements of the business and the next phase of
growth.
$20.7m
Net cash at
31 December 2023
50%
2023 EBITDA margin
THROUGH THE COMPANY’S THREE STRATEGIC PRIORITIES,
KENMARE AIMS TO DELIVER COMPELLING VALUE FOR ALL
STAKEHOLDERS.
BUSINESS OVERVIEW
03
Kenmare Resources plc Annual Report and Accounts 2023
2023
A YEAR
IN REVIEW
April
Capital Markets Day
held in London
Kenmare hosted a Capital Markets Day to present
its plans to upgrade Wet Concentrator Plant A
and to move it to the Nataka ore zone in late
2025. Nataka is the largest of Moma’s ore zones,
representing over 70% of Kenmare’s Mineral
Resources. Capital expenditure to the end of
2027 for the upgrade and move is expected to be
$326-341 million.
>70%
of Moma’s Mineral Resources are in Nataka
February
Severe lightning strike
impacts the Moma Mine
Kenmare employs a range of protection systems
to minimise the impact of seasonal lightning
strikes on operations, which alleviate most dips
and spikes in power supply to the Mine.
However, in early February 2023, power lines
close to Moma were hit by a direct lightning
strike of unusually high intensity, which cut
two powerline conductors and overwhelmed
the Mine’s lightning protection systems. Mining
operations were severely disrupted and this
impacted annual production of Heavy Mineral
Concentrate and ilmenite.
80%
of power dips and spikes
typically alleviated
August
Record first half revenue
and profit after tax
Kenmare generated record first half revenue
and profit after tax in H1 2023. As a result, the
Company paid a 2023 interim dividend of USc17.5
per share in October 2023, which represented a
59% increase compared to H1 2022 (USc10.98).
59%
increase in interim dividend per share
04
Kenmare Resources plc Annual Report and Accounts 2023
December
Two million hours worked
without a Lost Time Injury
Kenmare achieved two million hours worked
without a Lost Time Injury (LTI) in December
2023. The Company continues to focus on the
training and development of its employees with
the aim of fostering a robust safety culture at
the Mine.
2 million
hours worked without an LTI
Outlook
2024 is going to be an exciting year of delivery for Kenmare, in terms of
operations, growth opportunities and sustainability.
Sustainability pillars
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
SAFE AND
ENGAGED
WORKFORCE
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
THRIVING
COMMUNITIES
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
HEALTHY
NATURAL
ENVIRONMENT
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
TRUSTED
BUSINESS
Read more
about what
Kenmare’s
Environmental,
Health & Safety
Manager is
looking forward
to delivering in
2024 on page 6
September
Share buy-back completed
Kenmare repurchased 5.9% of the Company’s
issued share capital through a share buy-back for
a total consideration of $30.0 million. The share
buy-back was part of Kenmare’s programme to
deliver strong shareholder returns.
5.9%
of issued share capital repurchased
BUSINESS OVERVIEW
05
Kenmare Resources plc Annual Report and Accounts 2023
In late February 2024, Kenmare passed the milestone of
three million hours worked without a Lost Time Injury. For the
remainder of 2024, Babra’s objective is to further strengthen
Kenmare’s safety culture by building on past success.
Babra Mudzanapabwe
ENVIRONMENTAL, HEALTH AND SAFETY MANAGER
06
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC
REPORT
Chairman’s statement
08
Managing Director’s statement
12
Kenmare’s products
16
Kenmare’s business
18
Stakeholder engagement
22
Kenmare’s business model
24
Kenmare’s strategy
26
Market report
30
Key performance indicators
36
Kenmare’s operations
40
Operating process
42
Operating review
44
Mineral Reserves and Resources
48
Financial review
52
Sustainability
58
Principal risks and uncertainties
76
Viability statement
86
07
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Dear shareholders,
Introduction
Kenmare faced a number of challenges in 2023, both
internal and external. For some of these challenges,
such as a weaker product market, the resilience we
have built into the Company over the past few years
has enabled us to continue to operate profitably. For
others, such as the severe lightning strike close to the
Moma Mine in February, we have since built in additional
protective measures to minimise future interruptions to
production. I am proud that, against this backdrop, we
delivered another year of robust financial results and
strong shareholder distributions.
In 2024, we are embarking on a capital programme
to unlock the value from the Nataka ore zone, which
represents over 70% of Moma’s Mineral Resources. I
am confident that we have the skills and experience to
navigate the challenges that come with large projects:
we have strong relationships with our partners in
Mozambique, our customers, and other stakeholders,
supported by a team with 17 years of operational
experience and more than 30 years in country.
I would like to recognise Michael Carvill’s role in
developing the Company to this point and in preparing
the way for the Nataka development. The Moma deposit
was developed and Kenmare exists only because of
Michael’s focus, determination, and ability to build
enduring relationships. I am very grateful to him for
agreeing to continue to provide the Company with his
insights as a senior advisor on the Nataka transition and
our relationship with the Government of Mozambique.
Transition to Nataka
In 2023, we completed a Definitive Feasibility Study
(DFS) for the main elements of the upgrade of Wet
Concentrator Plant (WCP) A and its transition to Nataka.
Nataka is the largest ore zone within Moma’s portfolio
and WCP A is expected to mine there for the remainder
of its economic life. Our detailed studies have confirmed
the optimal method to mine Nataka and upgrade the
mining plant, with the objective of retaining our first
quartile position on the industry revenue to cost curve.
The capital cost for the Nataka transition to the end
of 2027 is estimated to be up to $341 million. This
includes costs for additional WCP A infrastructure, with
the DFS for this work due to be completed in Q2 2024.
Your Directors are very conscious that this represents
a significant increase to the cost estimates announced
following the Pre-Feasibility Study and the Board and
executive team are focused on detailed oversight and
effective delivery of the project, supporting successful
mining in the new ore zone for many years to come.
In order to maintain maximum financial flexibility during
this short period of increased capital spend, the Board
took the decision in late 2023 to defer the upgrade of
WCP B. While we continue to study ways of enhancing
production at WCP B, which is likely to represent
an attractive investment, in the short-term we are
prioritising the WCP A investment.
08
Kenmare Resources plc Annual Report and Accounts 2023
CHAIRMAN’S
STATEMENT
“WE DELIVERED ANOTHER
YEAR OF ROBUST
FINANCIAL RESULTS
AND WERE ABLE TO
RETURN $80 MILLION TO
SHAREHOLDERS.”
Andrew Webb
CHAIRMAN
Delivering value for our shareholders
During the year, I was pleased to get the opportunity to
meet with a number of Kenmare’s shareholders as it is
vital for the Board and management to understand their
perspectives, priorities and concerns. In early 2024, we
undertook an investor perception study to allow a wider
group of existing shareholders, potential investors and
sell-side analysts to share their views on all aspects of
the Company. One of the key pieces of feedback was
the importance of maintaining a sound balance sheet,
particularly while undertaking the Nataka transition.
My fellow Directors and I will continue to foster open
dialogue with our shareholders and we remain focused
on maximising shareholder value.
The Board is recommending a final dividend of
USc38.54 per share (2022: USc43.33). This amounts
to a total dividend in respect of 2023 of USc56.04 per
share, up 3% (2022: USc54.31). We also completed
a second share buy-back in September 2023, when
Kenmare repurchased 5.9% of its issued share capital
for a total consideration of $30.0 million. Including the
2023 dividend, over $250 million will have been returned
to shareholders through a combination of dividends and
share buy-backs since 2019.
The majority of the capital investment to support the
Nataka transition will be incurred in 2024 and 2025. We
recently announced a new $200 million debt facility
with our lenders, which is an important element of our
capital structure and financial planning. To the extent
possible during this period, we will aim to pay dividends
towards the top of our stated payout range of 20-40%
of underlying Profit After Tax. However, additional
shareholder returns will need to be balanced with a
requirement to maintain a strong balance sheet to fund
the programme.
Sustainability
Sustainability has always been central to Kenmare and
from speaking to employees at Moma, I know it is one of
the areas of our business that inspires the most passion
and pride in our workforce. I am encouraged to see a
return to strong safety performance, with no Lost Time
Injuries in Q4 and three million hours worked without a
Lost Time Injury achieved by late February 2024. The
health, safety and wellbeing of our team at the Moma
Mine remain our top priorities.
Female representation in Kenmare’s workforce increased
again in 2023 – by the end of the year, 16% of Mine
employees were women, up from 14.5% in 2022. This
represents a fourfold increase over the last eight years,
and we are making good progress towards our target
of 20% by the end of 2025. Importantly, an even higher
proportion of the senior management at the Mine is
female (40% compared to 25% in 2022) and we are
pleased to see their positive impact being delivered
through improved leadership and collaboration.
Turning to the environment, we take seriously our
responsibility to maintain biodiversity at the Moma Mine.
In June 2023, our Sustainability Committee participated
in a strategic discussion centred on the conservation
goals of both the Global Biodiversity Framework and
the Mozambican Government. Work is underway on our
strategies for “No Net Loss” and “15% Net Gain”, which
will be delivered through Moma’s Biodiversity Offset
Management Plan.
Read more
about
Kenmare’s
sustainability
strategy on
pages 60 to 61
09
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Executive and Board development
As Michael Carvill is stepping down later this year,
Kenmare’s Nomination Committee has initiated a
process to find Michael’s successor and will consider
both internal and external candidates. Michael will step
down ahead of the Company’s 2024 Interim Results.
As I mentioned in my last statement, we were delighted
to welcome Issa Al Balushi to the Board in early 2023.
He became a Director in January as the Board nominee
of our largest investor, the Oman Investment Authority.
We are committed to increasing female representation
on Kenmare’s Board and, following a review by the
Nomination Committee, we have initiated a search
for an additional female Non-Executive Director.
This will be co-ordinated with the search for a new
Managing Director in order to ensure that the Board
has the appropriate mix of skills. It is also our intention
to appoint one of our female Directors as Senior
Independent Director when Graham Martin retires
next year. This will allow us to benefit from increased
diversity, whilst also meeting Listing Rules for female
Directors and their roles in senior Board positions.
Following this, women will represent at least 40% of
Kenmare’s Board.
During the year, I conducted an internal Board
performance review. Similarly to 2022, the review
indicated a high level of satisfaction and found that
there is good communication both within the Board and
its Committees, and with management. However, there
is always room for improvement, and we have identified
a number of focus areas to improve Board effectiveness
in 2024. These include strengthening the processes
by which the Board oversees budgeting and capital
allocation planning, and how we evaluate internal and
external investment opportunities.
Outlook
2023 was a year of on-going global volatility: the
Chinese economy slowed, and major conflicts erupted
or continued in several parts of the world. The potential
for instability is likely to extend into 2024, with both the
USA and Russia holding elections during the year, in
addition to approximately 70 other countries, including
Mozambique.
However, despite the prospect of on-going
macroeconomic uncertainty, Kenmare continues to
occupy a market-leading position: we produce products
that the world needs, we can operate profitably
throughout the commodity price cycle, and the
Nataka transition will ensure this continues for future
generations.
Nevertheless, we recognise there is a lot of work to be
done, including continuing to strengthen our safety
culture, improving the consistency of our operational
performance, and ensuring we capture strategic
opportunities whenever value can be created for all of
our stakeholders. We recognise that Kenmare’s share
price has experienced significant weakness during the
past year, and we are focused on delivery in order to
improve our valuation in 2024 and beyond.
Acknowledgements
On behalf of the Board, I would like to thank Michael
Carvill for his outstanding commitment and service
to Kenmare over almost forty years. Having worked
with him personally for 25 years, I have seen first-hand
his dedication to the highest personal and corporate
values in every facet of our operations, the inspirational
quality of his leadership, and the beneficial impact of his
commitment to the communities in which we work. We
are very grateful for Michael’s tremendous contribution
to Kenmare and he has our very best wishes for the
future.
We appreciate the support of everyone who has
contributed to the Company over the past year, and
I’d like to finish by thanking my colleagues on the
Board, Kenmare’s employees, our host communities,
shareholders, and other valued stakeholders.
Andrew Webb
CHAIRMAN
Read more
about Board
development
on pages 90
to 91
40%
Target female Board representation from
May 2024
“IN 2024 WE ARE EMBARKING
ON A CAPITAL PROGRAMME TO
UNLOCK THE VALUE FROM THE
LARGE NATAKA ORE ZONE.”
Andrew Webb
10
Kenmare Resources plc Annual Report and Accounts 2023
CHAIRMAN’S STATEMENT CONTINUED
By the end of 2023, 16% of Kenmare’s employees were
female, well above the industry average of 12%. The
Company is proud that it is making good progress
towards its target of 20% by the end of 2025. The number
of senior management roles held by women at Moma
increased to 40% in 2023, compared to 25% in 2022.
STRATEGIC REPORT
11
Kenmare Resources plc Annual Report and Accounts 2023
Dear shareholders,
Introduction
In March 2024, I announced that I will be stepping
down as Managing Director later this year. Subject to
my re-election at our Annual General Meeting in May,
I will continue in my executive role and on Kenmare’s
Board until the Interim Results in mid-August, and in a
consultancy capacity until at least the end of 2024. The
38 years I will have served as Managing Director have
been both fascinating and rewarding, and each year has
brought its own challenges and achievements.
Looking back on 2023 in particular, we advanced a
number of major projects, critical for the long-term
success of the business. Preparations began for the
transition of Wet Concentrator Plant (WCP) A to Nataka,
which will secure production for decades to come. The
refinancing of our debt facilities, which we announced
in early 2024, enhanced our financial flexibility and will
allow us to maintain shareholder distributions, while
funding our capital requirements. The contract was also
signed for the construction of a new district hospital by
the Kenmare Moma Development Association (KMAD),
which will substantially improve the healthcare provision
for communities living close to the Moma Mine.
However, 2023 also presented a number of operational
challenges, principally an unusually severe lightning
strike, that led to a downward revision of our ilmenite
production guidance for the year. I am proud that,
despite these issues and weaker product markets,
we delivered a robust financial performance, with
the second strongest EBITDA in Kenmare’s history
and representing a 50% EBITDA margin. We also
maintained a net cash position at year-end. The Board
is recommending a dividend per share of USc56.04 in
respect of 2023, up 3% on 2022, and benefitting from
Kenmare’s reduced issued share capital following our
second share buy-back in 2023.
Safety
In late February 2024, we passed the milestone of three
million hours worked without a Lost Time Injury (LTI),
which is a credit to our team at Moma. This built on
our strong safety performance in Q4 2023, when we
achieved zero LTIs.
While this was encouraging, our Lost Time Injury
Frequency Rate for the 12 months to 31 December 2023
increased to 0.15 incidents per 200,000 hours worked,
due to the five LTIs earlier in the year, compared to 0.09
in 2022.
3 million
Hours worked without a Lost Time Injury
by late February 2024
12
Kenmare Resources plc Annual Report and Accounts 2023
“OUR FIRST QUARTILE
INDUSTRY POSITION
SUPPORTS OUR ABILITY
TO GENERATE STRONG
CASH FLOW EVEN DURING
PERIODS OF WEAKER
PRICING”
Michael Carvill
MANAGING DIRECTOR
12
Kenmare Resources plc Annual Report and Accounts 2023
MANAGING
DIRECTOR’S
STATEMENT
As part of our focus on reversing this negative trend,
we strengthened our safety leadership with the
appointment of a new Health & Safety Manager, Babra
Mudzanapabwe. She is managing the implementation of
additional training and new safety protocols, including
“safety-led down times”, to reinforce that safety must
always be prioritised above production.
For an eighth consecutive year, Moma retained its
maximum five-star rating by the National Occupational
Safety Association (NOSA).
Operational performance
Operations at the Moma Mine had a difficult start
to 2023, due to an unusually severe lightning strike
hitting power lines close to the Mine in February. Power
infrastructure and electronic devices within our three
WCPs were damaged by the strike, impacting Heavy
Mineral Concentrate (HMC) production. We continued
to experience power reliability issues throughout H1,
leading us to revise down our ilmenite production
guidance in July. In the months following the lightning
strike, our technical team conducted a thorough
investigation and additional protective measures have
since been put in place, providing an additional line of
defence to the grid’s own safeguards.
To improve future regional power reliability, Kenmare
part-funded the refurbishment of the Nampula STATCOM
on the Electricidade de Mozambique (EdM) grid and this
was commissioned in Q4 2023. In addition, a new regional
400kV power line is due to be commissioned by EdM in
the coming months. Both of these projects are expected
to enhance power stability at the Mine.
HMC production was also impacted by lower grades in
2023 than expected. Against this backdrop, we were
pleased to achieve revised ilmenite production guidance
for the year, while meeting or exceeding original
production guidance for our other products, and we are
focused on improving operational performance in 2024.
Shipments in 2023 were down 3% compared to 2022, due
to slightly weaker demand and more cautious buying
from our customers. However, we saw our strongest
shipments in Q4 and volumes would have been higher
still had poor weather not impacted loading time.
In an independent report, TZMI, a mineral sands
industry analyst, declared that Kenmare is in the first
quartile on the industry revenue to cost curve in respect
of 2021. It was pleasing to receive this independent
verification of our own analysis and we are focused
on maintaining this leading position, which will be
facilitated through our programme of capital investment.
In late 2022, Kenmare initiated the renewal process for
the Implementation Agreement, which covers elements
of the fiscal regime governing Moma’s operation. The
original agreement was signed in 2004 with a 20-year
term and the Company has materially exceeded all
the undertakings agreed at that time. This process is
continuing and Kenmare is confident the renewal will be
concluded in an orderly manner.
Sustainability
Since the Company’s formation, we have had a
commitment to being a trusted corporate citizen,
particularly with respect to our stakeholders in
Mozambique.
In 2004, we established KMAD and I am very proud of
the transformational change it has delivered for people
living close to the Mine. During the past 20 years,
over $20 million has been invested into community
development initiatives, including $4.7 million in 2023.
In addition to the agreement to construct a new
district hospital, some of KMAD’s highlights for the
year included the construction of a third community
health centre and the first students graduating from the
KMAD-constructed Topuito Technical College, including
23 female students sponsored by KMAD.
2023 has been confirmed as the hottest year on
record and climate change is no longer a future threat
but a current reality for our business. With this in
mind, we are working to set 2030 interim targets for
operational emissions to demonstrate a clear route
to decarbonisation and our 2040 Net Zero target. In
2023, we reduced our Scope 1 emissions by 14%, due
primarily to investments in the Rotary Uninterruptible
Power Supply and operational efficiencies at the Mineral
Separation Plant.
Read more
about
Kenmare’s
operations on
pages 40 to 41
Read more
about KMAD
on page 64
986,300t
Ilmenite production in 2023
“SINCE KMAD’S INCEPTION IN
2004, OVER $20M HAS BEEN
INVESTED IN COMMUNITY
DEVELOPMENT INITIATIVES.”
Michael Carvill
14%
Reduction in Scope 1 emissions
13
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Product markets
The Moma Mine is a globally significant titanium
minerals deposit, with over 100 years of Mineral
Resources at the current production rate. Titanium
minerals are listed as critical minerals for a number
of regions, including the US and in Europe. They are
essential in the production of titanium pigment, which is
used in everyday items such as paint, plastic and paper,
as well as in the fast-growing titanium metal market,
which is primarily consumed by the aerospace industry.
Following a year of record pricing in 2022, markets
softened in 2023 due to increasing global economic
uncertainty. It was nonetheless pleasing to see that
demand from our customers remained relatively robust
despite these macroeconomic pressures and demand
for ilmenite has been stronger in early 2024 than we
expected.
Downstream demand for titanium pigment was subdued
in 2023, although it improved through the second half of
the year. The challenges faced by the pigment market
prompted producers to sustain lower-than-normal
inventories throughout 2023. We believe the rebuilding
of these inventories through increased utilisation
rates in 2024 will support demand for ilmenite. Market
dynamics continue to favour Kenmare’s ilmenite and
we also benefit from our first quartile margin position,
allowing us to generate positive cash flow throughout
the commodity price cycle.
The zircon market was also softer in 2023 as reduced
global economic activity decreased demand for
products like ceramics. Prices for zircon in Europe
remained weaker in early 2024 but Kenmare has seen
a stabilisation in the Chinese spot market in recent
months, which we expect will provide some support to
the global market.
Despite these short-term pressures, Kenmare believes
that the market fundamentals for our products are
strong, due primarily to medium- and long-term supply
constraints within the titanium feedstocks and zircon
industries.
Capital projects
During 2023, we completed the Definitive Feasibility
Study (DFS) for the core elements of WCP A’s upgrade
and transition to Nataka in late 2025. Nataka is the
largest of Moma’s ore zones and WCP A will mine there
for the rest of its economic life.
The upgrade of WCP A will significantly increase the
plant’s capacity and allow it to more effectively manage
slimes, which are ultra fine particles that negatively
impact production. This will ensure consistent future
production, while maintaining low operating costs. The
DFS for additional infrastructure is continuing and
scheduled to be completed in Q2 2024.
Total capital expenditure for the project is estimated to
be up to $341 million to the end of 2027, including the
costs for additional infrastructure. Most of this capital
expenditure is expected to be incurred in 2024 and
2025, with $179 million budgeted for 2024.
The DFS capital cost estimate is higher than the Pre-
Feasibility Study estimate, which was released in April.
This was due to changes in scope and design, reflecting
opportunities to safeguard Kenmare’s first quartile
position on the revenue to cost curve; additional indirect
costs to deliver effective schedule risk minimisation;
increased contingency costs; and capital cost inflation
during the period.
We will be funding this capital investment through
operational cash flows and debt facilities, while
continuing to make shareholder returns. We announced
a new $200 million Revolving Credit Facility with our
existing lender group in February 2024, with improved
terms that reflect our position as an established mineral
sands producer.
Outlook
With 2024 well underway, our focus is firmly on delivery.
Our team at the Moma Mine are working hard to achieve
our guidance for the year, while maintaining the strong
safety performance we returned to in Q4 2023. Our
projects team is advancing the preparations for the
transition to Nataka, while actively looking for ways to
optimise the scope, design, and execution of the project.
While product markets were impacted in 2023 by the
weaker global economy, ilmenite prices are holding
up well in early 2024. Our first quartile position on the
industry revenue to cost curve supports our ability
to generate strong cash flow, even during periods
of weaker pricing, and we are focused on optimising
mining at Nataka to ensure we retain this position.
Finally, I would like to thank all my friends and
colleagues within the Company, as well as our
customers, shareholders, and other partners in
Mozambique for their continued support. It has been
a privilege to lead Kenmare for almost four decades
and I am pleased to leave the Company in a position
of strength, with a tier one asset, and as the largest
supplier of ilmenite in the world. I am very proud of all
that Kenmare has achieved to date and confident in our
team’s ability to continue to execute on the Company’s
strategy to create value for all stakeholders.
Michael Carvill
MANAGING DIRECTOR
Read more
about
sustainability
on pages 58
to 74
Read more
about
Kenmare’s
capital
projects on
pages 40 to 41
14
Kenmare Resources plc Annual Report and Accounts 2023
MANAGING DIRECTOR’S STATEMENT CONTINUED
Kenmare established the Kenmare Moma Development
Association (KMAD) in 2004 to support people living
in the Moma Mine’s host communities in Mozambique.
Since then, some of its initiatives have included
installing 30 water supply systems, building three
community medical centres and constructing and
furnishing a Technical College.
STRATEGIC REPORT
15
Kenmare Resources plc Annual Report and Accounts 2023
TITANIUM DIOXIDE PIGMENT CONSUMPTION
WHAT KENMARE PRODUCES
Kenmare has two core product streams: titanium feedstocks (ilmenite and rutile) and zircon, which is a zirconium mineral. Ilmenite is
the Company’s primary product, typically representing more than 70% of revenue. Kenmare also produces a small quantity of monazite
(a mineral containing rare-earth elements) as part of a mixture of products in a concentrate.
Titanium and zirconium minerals are known for imparting the qualities of whiteness and opacity in the products they are consumed in.
These products can be found in many areas of everyday life.
986.3kt
Ilmenite produced by
Kenmare in 2023
7%
of global titanium
feedstock production
USES OF TITANIUM MINERALS
8.5Mt
OF TITANIUM
DIOXIDE UNITS
8%
TITANIUM
METAL
4%
WELDING
APPLICATIONS
AND OTHER
88%
TITANIUM
DIOXIDE
PIGMENT
Titanium feedstocks
The production of titanium dioxide pigment accounts for
approximately 90% of the demand for titanium feedstocks,
like ilmenite and rutile, with smaller quantities used to
produce titanium metal and welding electrode fluxes.
In 2023, global titanium feedstock production generated
revenue of $4.4 billion and the titanium dioxide pigment
industry generated revenue of approximately $18.2 billion.
1
%
3
%
P
A
P
E
R
7
%
P
L
A
S
T
I
C
S
2
5
%
P
A
I
N
T
S
A
N
D
C
O
A
T
I
N
G
S
5
6
%
O
T
H
E
R
8
%
PHARMACEUTICALS
ELECTRONIC
EQUIPMENT
HOUSEHOLD
EQUIPMENT
PACKAGING
BOOKS
TOYS
FURNITURE
COSMETICS
HOUSE PAINTS
& COATINGS
INDUSTRIAL PAINTS
& COATINGS
CAR PAINTS
& COATINGS
SHIP PAINTS
& COATINGS
7Mt
Titanium dioxide
pigment consumption
HOME
FURNISHINGS
CLOTHING
NEWSPAPERS
& MAGAZINES
STATIONERY
16
Kenmare Resources plc Annual Report and Accounts 2023
KENMARE’S PRODUCTS
Zircon
Zircon sand is an important feedstock to a wide range
of industries, of which the ceramics sector is the largest
consumer, due to zircon’s brilliant whiteness. Zircon is
also used in refractory, foundry and chemical applications,
which are essential to modern manufacturing.
In 2023, the zircon sand supply sector generated revenue
of approximately $2.3 billion, with Europe and Asia being
the largest markets.
51.1kt
Zircon produced by
Kenmare in 2023
5%
of global zircon
production
ZIRCON CONSUMPTION
Ilmenite is Kenmare’s primary product, representing
72% of revenue in 2023. The relative percentages of the
different products sold change with the pricing of the
commodities as well as the volumes of shipments made,
which can vary from one period to the next.
REVENUE BY PRODUCT
72%
ILMENITE
7%
CONCENTRATES
18%
PRIMARY ZIRCON
3%
RUTILE
F
O
U
N
D
R
Y
1
2
%
R
E
F
R
A
C
T
O
R
Y
1
7
%
C
E
R
A
M
I
C
S
4
8
%
Z
I
R
C
O
N
I
A
A
N
D
Z
R
C
H
E
M
I
C
A
L
S
2
1
%
O
T
H
E
R
2
%
1.2Mt
Zircon
consumption
HOME
FURNISHINGS
HOUSE PAINTS
& COATINGS
INDUSTRIAL PAINTS
& COATINGS
CAR PAINTS
& COATINGS
CLOTHING
ELECTRONIC
EQUIPMENT
HOUSEHOLD
EQUIPMENT
PACKAGING
BOOKS
SHIP PAINTS
& COATINGS
TOYS
PHARMACEUTICALS
COSMETICS
FURNITURE
NEWSPAPERS
& MAGAZINES
STATIONERY
17
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Kenmare is focused on creating value for all
stakeholders through its purpose of “Responsibly
meeting global demand for quality-of-life minerals.”
This purpose is best served through the alignment of
Kenmare’s culture with its vision, strategy and values.
Kenmare’s actions are informed by its guiding principles:
We Care, We Grow, We Excel.
18
Kenmare Resources plc Annual Report and Accounts 2023Kenmare Resources plc Annual Report and Accounts 2023
18
KENMARE’S BUSINESS
Vision
To be a leading titanium
minerals producer positioned in
the first quartile of the industry
revenue to cost curve
Kenmare's
purpose
Responsibly meeting
global demand for
quality-of-life
minerals
Strategy
Operate
responsibly
Deliver long-life,
low-cost
production
Allocate capital
efficiently
Values
Integrity
Commitment
Accountability
Respect
Excellence
We care for:
The safety, health, security and well-being
of our employees, the environment,
communities and other stakeholders.
Our host communities by forming
partnerships; sharing and participating
in the preservation of their environment,
traditions and values.
Company assets by providing suitable
security and risk management systems
and striving for best practice in their
operation and maintenance.
We grow our:
Employees by providing attractive work
opportunities, treating them fairly and
providing opportunities for personal
growth to match their interests and
capabilities.
Host communities by forming
partnerships to develop and promote
economic and social well-being.
Company through exploration, production
expansion projects, and expanding
existing and new markets.
We excel by:
Optimising operations, increasing
productivity and lowering costs
through the continuous improvement of
processes, procedures and skills.
Achieving control and standardisation
through planning and developing systems
and processes of work.
Striving for best practice in all areas
of operations, customer service and
corporate citizenship.
Positioned in the first quartile
What it means
A first quartile producer generates more revenues per dollar of cash costs than 75% of its competitors.
The benefits
Companies who operate in the first quartile will generate higher cash margins, providing an opportunity
to invest through the commodity cycle, while supporting returns to shareholders.
19
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Kenmare’s people are
a key resource...
Kenmare believes that its employees are the cornerstone
of the business and that a partnership approach is vital to
achieving its business objectives. The Company’s ability
to attract, retain and motivate a diverse, high calibre and
localised workforce is at the heart of its ongoing success
and sustainability as a business.
The Company works to address the challenges relating to
the unequal gender representation at all levels within the
business and growing female representation continues to
be one of the Key Performance Indicators being tracked
by the Moma Mine ESG Scorecard. You can read more
about Kenmare’s progress on gender diversity within the
Sustainability Strategy update, on page 60.
Kenmare prides itself on being an organisation where
employees can continue to grow and develop over many
years. Every two years the Company hosts a Long Service
Awards ceremony, where around 500 employees are
celebrated. Employees who have reached the milestone
of 10, 20, or even 30 years of service are invited. Kenmare
is proud of the long-term commitment many of its team
members have made to the success of the business.
1,708
Kenmare
employees
97%
Mozambican
workforce at Moma
and the Company strives to
put their safety first...
Employee safety is Kenmare’s highest priority. This
commitment to zero-harm drives day-to-day decision
making and work. To do this, Kenmare takes a proactive
approach to assessing potential risks, managing safety
measures and sharing learnings to continuously improve
performance.
Building on this, the Company invests significantly in
training and development to equip its people with the
skills and knowledge they need to contribute to a strong
safety culture. In 2023, the Company invested $1.2 million
to provide 75,000 hours of training for its employees.
The phrase “Trabalho Seguro”, which means “safe
work” in Portuguese, has become a core message,
which is serving to activate workforce engagement
and behavioural change. At the end of February 2024,
Kenmare achieved three million hours worked without a
Lost Time Injury.
Supporting the health and well-being of Kenmare’s
workforce is another key priority and more information
can be found about it on page 62.
0.15
Lost Time Injury
Frequency Rate
51%
Decrease in
malaria cases
BY CARING FOR ITS PEOPLE, KENMARE CAN HELP THEM GROW
TO ENSURE THEY EXCEL IN ALL ASPECTS OF THEIR LIFE, THEIR
COMMUNITIES AND THEIR ROLE IN THE BUSINESS.
20
Kenmare Resources plc Annual Report and Accounts 2023
KENMARE’S PEOPLE AND CULTURE
valuing and nurturing them...
Kenmare’s values of Integrity, Commitment, Accountability,
Respect, and Excellence (ICARE) guide how employees
work together and treat each other. The Company’s
operations are also carried out in accordance with these five
values. They are essential for Kenmare’s success, and the
Company continues to empower and encourage its people
to live by them in both their individual roles and teams.
Kenmare provides competitive remuneration and invests in
the professional and personal development of its employees,
while providing a safe and healthy working environment.
Employees are paid a living wage and in 2023, the minimum
standard wage for an entry-level position at Kenmare was
more than double the wage set by the Government of
Mozambique. The Company includes maximum working
hours in its employment conditions and procedures, while
also adhering to relevant employment laws.
Kenmare respects the rights of all employees to freedom
of association and the right to collective bargaining
without interference or discrimination. Almost half of the
Company’s Mozambican workforce are members of the
SINTICIM trade union, and during 2023, labour relations
were positive, with no industrial actions or disputes.
Personal development remains a priority focus for the
Operations team, with all leaders having undertaken a
Leadership Coaching Programme by the end of 2023.
$1.2m
Invested in employee
training
75,000
Hours of employee
training
to create a dynamic
workplace culture.
Kenmare aims to foster a purpose led, high-performance
and inclusive culture. Its values and guiding principles
shape its behaviour and define this culture. These are
fundamental to ensuring the Company creates the
maximum benefits for all stakeholders.
The Company ran several workshops in 2023 to review
and update Kenmare’s purpose. Executive Committee
members and site-based leadership facilitated sessions
whereby employees talked about what working for
Kenmare meant to them, why they had chosen to work
here and what motivates them to give their best to
the job each day. Employees shared that the Company
genuinely cares about their safety, wellbeing and
career development. They are also proud to work for an
organisation that makes such a significant socio-economic
contribution to Mozambique in terms of job creation,
responsible mining practices and initiatives to uplift the
health, education and livelihoods of communities. This
new Company purpose is expected to be finalised later in
H1 2024 and it will be tested with employees throughout
Kenmare before it is adopted and rolled out.
5
Kenmare values
(ICARE)
3
Guiding principles
INTEGRITY
COMMITMENT
ACCOUNTABILITY
RESPECT
EXCELLENCE
Kenmare’s dynamic workplace
culture is driven by its values:
21
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
STAKEHOLDER ENGAGEMENT
Importance of engaging
Kenmare believes that its employees are
critical to its success and that a partnership
approach is vital to achieving business
objectives. The Company provides competitive
remuneration and invests in professional and
personal development, while providing a safe
and healthy working environment.
Kenmare values its relationship with its
host communities highly. The Company’s
stakeholder engagement plan is updated
annually and reflects the evolving dynamics
in the relationship between the Mine and
host communities.
Kenmare complies with applicable laws and
regulations and ensures that Mozambique
shares in the benefits of the Moma Mine. The
Company maintains a proactive dialogue with
national, district and provincial government so
they are well-informed of the Mine’s activities.
Kenmare’s shareholders are the owners of
the business and their continued support is
critical. They provide the capital to develop
and expand operations responsibly and
sustainably and consequently, Kenmare needs
to ensure it continues to deliver both a strong
investor proposition and be able to meet its
debt obligations as they fall due.
Kenmare believes in building stable,
long-term relationships based on mutually
beneficial terms with suppliers, contractors,
customers and financial service providers.
Kenmare works in collaboration with the full
value chain, assisting its partners to meet the
Company’s ethical, environmental and safety
standards.
Ways in which Kenmare
engages stakeholders
and how engagement
is monitored
Facilitates quarterly union meetings
Undertakes quarterly performance and
feedback meetings with employees
Undertakes bi-monthly departmental
“focal point” meetings
Engages union representatives
constructively on collective
bargaining issues
Supports networking forums such as the
Kenmare Women in Mining Forum
Operates an independent whistleblowing
service
Publishes Company newsletters and hosts
regular “Toolbox Talks” and Town Hall
meetings, as well as undertaking staff
engagement surveys
Holds formal bi-monthly and informal ad
hoc community meetings to understand
and discuss host communities’ concerns
and priorities
Supports local radio stations to inform
the community of Kenmare and KMAD’s
activities
Conducts Environmental, Social and
Health Impact Assessments to identify
potential positive and negative impacts
of the Mine’s activities
Operates grievance mechanisms to
address community concerns and
maintains a grievance register
KMAD hosts three Local Working Group
community meetings annually and
publishes a quarterly newsletter
Directs engagement with local, provincial
and national government authorities
regarding mining rights, environmental
issues and permitting
Provides monthly, quarterly and annual
reports to the Ministry of Mineral
Resources and Energy
Provides an annual report to the Ministry
for Land and Environment
Provides a quarterly report to the District
Authorities
Provides a Portuguese summary of
Kenmare’s Annual Report to government
departments
Provides a Portuguese version of KMAD’s
Annual Report to government departments
Publishes an annual report on Payments to
Government
Participates in investor conferences
Hosts webinars and group presentations
Organises one-on-one investor meetings
and roadshows
Hosts site visits
Participates in interviews with the
investment press
Encourages dialogue at the Annual
General Meeting
Produces corporate materials including
announcements, presentations, Company
website, Annual Report and social
media posts
Undertakes surveys of investor
perceptions
Manages contractors
Undertakes supplier sustainability due
diligence audits and site visits
Hosts supplier forums, workshops,
meetings and training
Operates an independent whistleblowing
service
Significant topics raised
Training and development opportunities
Remuneration
Working conditions
Labour rights
Human rights
Health and safety
Respect for local values and traditions
Socio-economic development
Employment and procurement
opportunities
Land rehabilitation
Community wellbeing
Compliance with applicable laws and
regulations
Employment opportunities and
labour rights
Health and safety
Environmental stewardship
Licences and permitting
Taxation and royalties
Operating and financial performance
Growth strategy
Capital expenditure projects
Product markets
Environmental, social and governance
(ESG) performance
Working conditions
Labour rights
Human rights
Health and safety
Security
Kenmare’s response and
actions taken
290 public security personnel have
received external training on the Voluntary
Principles
Leadership development training
programme
Female representation in Mine
workforce reached 16%, with 40% female
representation in senior management
187 hectares of land rehabilitated
$940,000 generated by KMAD sponsored
micro-businesses
Three water systems installed, upgraded,
or repaired
Contract signed for the construction of a
new district hospital in Larde
Publication of a Portuguese version of the
Company website
Donations of medical equipment to support
the regional health service
Payments to the Government of
Mozambique of $43.6 million
3% increase in dividends per share in 2023
Capital Markets Day hosted in April 2023
Investor perception survey conducted in
early 2024
Disclosures to Carbon Disclosure Project
(CDP) Climate, Water and Forest, with B
scores for Climate and Water (Forest is
currently not marked by CDP)
100% of the 38 on-site suppliers audited
84% compliance by audited suppliers
with Kenmare’s Supplier Code of Conduct
Six new contracts established with local
suppliers
KENMARE HAS CONSTRUCTIVE LONG-TERM RELATIONSHIPS
WITH ALL OF ITS STAKEHOLDERS
Responsibility for stakeholder engagement is embedded across the business, including with the Board, the Executive Committee, site
leadership, community liaison teams, the Kenmare Moma Development Association (KMAD), contractors, and all representatives of
the business. With a life of mine of over 100 years, it is essential that the Company’s engagement with its stakeholders is open and
collaborative, supporting the lasting success of the business. Kenmare uses appropriate mechanisms to interact with its stakeholders,
provide them with information and learn about their interests and concerns.
Employees
and unions
Communities
22
Kenmare Resources plc Annual Report and Accounts 2023
Read more about Kenmare’s safe and
engaged workforce on pages 62 to 63
Read more about how Kenmare supports
local communities on pages 64 to 65
Importance of engaging
Kenmare believes that its employees are
critical to its success and that a partnership
approach is vital to achieving business
objectives. The Company provides competitive
remuneration and invests in professional and
personal development, while providing a safe
and healthy working environment.
Kenmare values its relationship with its
host communities highly. The Company’s
stakeholder engagement plan is updated
annually and reflects the evolving dynamics
in the relationship between the Mine and
host communities.
Kenmare complies with applicable laws and
regulations and ensures that Mozambique
shares in the benefits of the Moma Mine. The
Company maintains a proactive dialogue with
national, district and provincial government so
they are well-informed of the Mine’s activities.
Kenmare’s shareholders are the owners of
the business and their continued support is
critical. They provide the capital to develop
and expand operations responsibly and
sustainably and consequently, Kenmare needs
to ensure it continues to deliver both a strong
investor proposition and be able to meet its
debt obligations as they fall due.
Kenmare believes in building stable,
long-term relationships based on mutually
beneficial terms with suppliers, contractors,
customers and financial service providers.
Kenmare works in collaboration with the full
value chain, assisting its partners to meet the
Company’s ethical, environmental and safety
standards.
Ways in which Kenmare
engages stakeholders
and how engagement
is monitored
Facilitates quarterly union meetings
Undertakes quarterly performance and
feedback meetings with employees
Undertakes bi-monthly departmental
“focal point” meetings
Engages union representatives
constructively on collective
bargaining issues
Supports networking forums such as the
Kenmare Women in Mining Forum
Operates an independent whistleblowing
service
Publishes Company newsletters and hosts
regular “Toolbox Talks” and Town Hall
meetings, as well as undertaking staff
engagement surveys
Holds formal bi-monthly and informal ad
hoc community meetings to understand
and discuss host communities’ concerns
and priorities
Supports local radio stations to inform
the community of Kenmare and KMAD’s
activities
Conducts Environmental, Social and
Health Impact Assessments to identify
potential positive and negative impacts
of the Mine’s activities
Operates grievance mechanisms to
address community concerns and
maintains a grievance register
KMAD hosts three Local Working Group
community meetings annually and
publishes a quarterly newsletter
Directs engagement with local, provincial
and national government authorities
regarding mining rights, environmental
issues and permitting
Provides monthly, quarterly and annual
reports to the Ministry of Mineral
Resources and Energy
Provides an annual report to the Ministry
for Land and Environment
Provides a quarterly report to the District
Authorities
Provides a Portuguese summary of
Kenmare’s Annual Report to government
departments
Provides a Portuguese version of KMAD’s
Annual Report to government departments
Publishes an annual report on Payments to
Government
Participates in investor conferences
Hosts webinars and group presentations
Organises one-on-one investor meetings
and roadshows
Hosts site visits
Participates in interviews with the
investment press
Encourages dialogue at the Annual
General Meeting
Produces corporate materials including
announcements, presentations, Company
website, Annual Report and social
media posts
Undertakes surveys of investor
perceptions
Manages contractors
Undertakes supplier sustainability due
diligence audits and site visits
Hosts supplier forums, workshops,
meetings and training
Operates an independent whistleblowing
service
Significant topics raised
Training and development opportunities
Remuneration
Working conditions
Labour rights
Human rights
Health and safety
Respect for local values and traditions
Socio-economic development
Employment and procurement
opportunities
Land rehabilitation
Community wellbeing
Compliance with applicable laws and
regulations
Employment opportunities and
labour rights
Health and safety
Environmental stewardship
Licences and permitting
Taxation and royalties
Operating and financial performance
Growth strategy
Capital expenditure projects
Product markets
Environmental, social and governance
(ESG) performance
Working conditions
Labour rights
Human rights
Health and safety
Security
Kenmare’s response and
actions taken
290 public security personnel have
received external training on the Voluntary
Principles
Leadership development training
programme
Female representation in Mine
workforce reached 16%, with 40% female
representation in senior management
187 hectares of land rehabilitated
$940,000 generated by KMAD sponsored
micro-businesses
Three water systems installed, upgraded,
or repaired
Contract signed for the construction of a
new district hospital in Larde
Publication of a Portuguese version of the
Company website
Donations of medical equipment to support
the regional health service
Payments to the Government of
Mozambique of $43.6 million
3% increase in dividends per share in 2023
Capital Markets Day hosted in April 2023
Investor perception survey conducted in
early 2024
Disclosures to Carbon Disclosure Project
(CDP) Climate, Water and Forest, with B
scores for Climate and Water (Forest is
currently not marked by CDP)
100% of the 38 on-site suppliers audited
84% compliance by audited suppliers
with Kenmare’s Supplier Code of Conduct
Six new contracts established with local
suppliers
Government
and regulators
Shareholders
and lenders
Suppliers, contractors
and customers
23
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Kenmare’s unique value
proposition centres
on environmentally
responsible practices,
showcasing a robust track
record in sustainability,
innovation, and technology
integration.
Read more about
Kenmare’s unique value
proposition on pages 2
to 3
Mine planning
Mining is scheduled
using Proved and
Probable Ore Reserves
Mining and
rehabilitation
Mineralised sands are
mined by dredges before
the area is rehabilitated
Export
Finished products
are exported by sea
to customers around
the world
Concentrating
The Wet Concentrator
Plants produce Heavy
Mineral Concentrate (HMC)
Processing and
separation
The Mineral Separation
Plant processes HMC
and produces ilmenite,
rutile, zircon and mineral
sands concentrate
Market
fundamentals
GLOBAL DEMAND
Read about the uses for
Kenmare’s products on page 16
COMPETITION
Read about the expected
supply on page 34
COMMODITY PRICES
See the positive trend in
prices on page 32
Kenmare’s integrated
approach
RESPONSIBLE APPROACH
Read about Kenmare’s
approach to sustainability on
page 60
STRONG CORPORATE
GOVERNANCE
Read about Kenmare’s
corporate governance from
page 96
STAKEHOLDER ENGAGEMENT
Read about Kenmare’s key
stakeholders on page 22
Assets
EMPLOYEES
Read about Kenmare’s safe
and engaged workforce on
page 62
LARGE MINERAL RESOURCE
Read about Moma’s 9.0 billion
tonnes of Mineral Resources
on page 48
ESTABLISHED PRODUCER
Read about Kenmare’s
operations on page 42
SIGNIFICANT FINANCIAL
RESOURCES
Read about Kenmare’s strong
financial position on page 52
RENEWABLE ENERGY SOURCE
Over 90% of Moma’s
electricity comes from
hydropower - see page 42
WHAT KENMARE DOES
KEY INPUTS THAT DRIVE
KENMARE’S SUCCESS
KENMARE’S BUSINESS MODEL
Vision
To be a leading titanium
minerals producer positioned in
the first quartile of the industry
revenue to cost curve
Kenmare's
purpose
Responsibly meeting
global demand for
quality-of-life
minerals
Strategy
Operate
responsibly
Deliver long-life,
low-cost
production
Allocate capital
efficiently
Values
Integrity
Commitment
Accountability
Respect
Excellence
24
Kenmare Resources plc Annual Report and Accounts 2023
WHAT KENMARE DOES VALUE GENERATED FOR STAKEHOLDERS AND IMPACTS
Employee and unions
Kenmare’s employees are its most important asset
and the objective of the Company’s safety culture
is to provide a safe working environment. Kenmare
continues to work to increase opportunities for
women and Mozambicans through targeted
training and leadership programmes. 16% of
Kenmare’s employees were female at the end of
2023, significantly above the global mining industry
average of 12%, and women hold 40% of site-based
senior management positions. 97% of Kenmare’s
employees at Moma are Mozambican and 37% are
from the Moma or Larde districts near the Mine.
Environment
Kenmare is committed to responsible environmental
stewardship and efficient use of natural resources.
The Company is proud of its low environmental
impact, including employing progressive land
rehabilitation practices. In 2023, Kenmare
rehabilitated 187 ha of land, exceeding its target of
175 ha. Kenmare worked with academic partners and
communities to plant 12.5 ha of agroforestry systems.
Close to 151,000 indigenous trees were planted to
restore biodiversity lost through the mining process
and close to 53,000 casuarinas were planted,
providing stability to dunes and a future wood source
for communities.
Suppliers, contractors and customers
Kenmare is the world’s largest supplier of ilmenite,
supplying over 25 customers operating in more than
15 countries. The Company believes its products
have among the lowest carbon-intensity in the
industry. This is due to half of Moma’s overall energy
requirements and over 90% of Moma’s electrical
power consumption being provided by hydroelectric
power. 100% of the 38 suppliers at Moma were
audited during the year and $31.6 million was spent
with suppliers based in Nampula province in 2023.
Kenmare also believes in building stable, long-term
relationships based on mutually beneficial terms with
its contractors.
Shareholders
The Board is recommending a 2023 full year dividend
of USc56.04, up 3% on 2022 (USc54.31) for a total
distribution of $50.0 million in respect of 2023. In
addition to these shareholder returns, in September
2023 Kenmare completed a share buy-back to
repurchase 5.9% of the Company’s issued share
capital for $30.0 million. Since 2019, Kenmare has
returned over $250 million to shareholders, including
the 2023 dividend.
Communities
Kenmare aims to be a catalyst for positive social
and economic change in the Moma Mine’s host
communities. In 2023, Kenmare invested $4.7
million through the Kenmare Moma Development
Association (KMAD) to support the improvement of
livelihoods, healthcare services, education provision
and access to clean water and sanitation. In 2023,
some of KMAD’s initiatives included funding the
installation of four new water supply systems to
serve ~12,700 people, sponsoring 23 female students
to complete a vocational course at the Topuito
Technical College and the signing of a construction
contract to build a new district hospital.
Government and regulators
Kenmare’s production accounts for approximately
7% of Mozambique’s exports. The Government
of Mozambique has always upheld the terms of
the Company’s licences and other agreements,
and Kenmare values their partnership highly. The
Company was named the most transparent company
in Mozambique for three consecutive years by the
Centre for Public Integrity’s Extractive Industry
Transparency Index, most recently in 2022.
25
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
KENMARE’S VISION IS TO BE A LEADING TITANIUM
MINERALS PRODUCER POSITIONED IN THE FIRST QUARTILE
OF THE INDUSTRY.
The Company will deliver this vision through its strategy and its commitment to being a responsible corporate
citizen. Kenmare’s strategy is built around the following pillars 1) to operate responsibly; 2) to deliver long-life,
low-cost production; and 3) to allocate capital efficiently.
Risk key
1
Permitting, licensing and Government
agreement risk
2
Country risk
3
Geotechnical risk
4
Severe weather events
5
Uncertainty over physical
characteristics of the orebody
6
Power supply and transmission risk
7
Asset damage or loss
8
Health, Safety and Environment (HSE)
9
Material misstatement in the Ore
Reserves & Mineral Resource Table
10
IT security risk
11
Development project risk
12
Industry cyclicality
13
Customer and/or market
concentration
14
Foreign currency risk
15
Aggressive cost inflation
Lost Time Injury
Frequency Rate
(LTIFR)
Greenhouse Gas
(GHG) emissions
Gender diversity
Production of
finished products
Shipments
Cash costs
EBITDA
Profit after tax
Total capital expenditure
Net cash/(debt)
Shareholder returns
Return on Capital Employed
KPI key
Strategic risks Operational risks Financial risks
KENMARE’S STRATEGY
26
Kenmare Resources plc Annual Report and Accounts 2023
OPERATE RESPONSIBLY
Strategic priorities
Kenmare is focused on:
Developing a safe and engaged workforce
Supporting thriving communities
Protecting a healthy natural environment
Being a trusted business
Performance in 2023
Kenmare achieved an important safety milestone in December
2023, with two million hours worked without a Lost Time Injury
(LTI) and zero LTIs in Q4. Three million hours without an LTI
was achieved in late February 2024. Highlights of the year for
the Kenmare Moma Development Association (KMAD), included
a further three water supply systems constructed or repaired,
taking the total number of wells drilled by KMAD to over 30 since
2004. KMAD also built a third community health centre and a
contract was signed for the construction of a new district hospital.
Kenmare maintained its B score for the Carbon Disclosure Project
(CDP) climate questionnaire and achieved a B score for the water
questionnaire, which the Company completed for the first time
in 2023. Meanwhile, an audit of targeted suppliers to the Moma
Mine achieved 84% compliance with Kenmare’s supplier Code of
Conduct, compared to 79% in 2022.
Outlook for 2024
Kenmare intends to build on the strong safety performance
achieved in the final months of 2023 and to continue to provide
opportunities for the development of its workforce in 2024. KMAD
will begin construction of the new district hospital as well as the
electrification of five villages around Pilivili. Work will continue
on the Company’s Biodiversity Offset Management Plan to
deliver 15% Net Gain in biodiversity and on increasing the level
of sustainability due diligence in its supply chain, looking beyond
policy commitments to evidence of strategies, action plans
and performance management. Kenmare continues to raise the
standards it holds itself to and further details of its sustainability
targets for 2024 and beyond can be found on page 58 and in the
Sustainability Report.
Links to KPIs
Link to risks
1
2
4
6
7
8
10
12
13
Malaria reduction programme
The Moma Mine is situated in a malaria endemic region in
Mozambique, with malaria accounting for almost 30% of
all deaths in the country. In 2023, the Company achieved
a 51% reduction in employee malaria cases compared to
2022. This was the result of comprehensive prevention
and control measures, including on-going educational
campaigns, regular distribution of malaria prevention tools
to employees, and indoor and outdoor insecticide spraying.
In 2023, Kenmare also continued its partnership with a
Mozambican Government medical research institute on its
Vector Control programme.
Case study
Sustainability is central to Kenmare’s business. The Company has a proven commitment to being a
trusted corporate citizen during its more than 30-year history and it aims to continually improve its
environmental, social, and governance performance. Kenmare’s sustainability strategy, comprised
of four strategic priorities, ensures it maximises value and creates opportunities from the Moma
Mine for the benefit of all stakeholders.
51%
Reduction in employee malaria cases
27
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
DELIVER LONG-LIFE, LOW-COST PRODUCTION
Strategic priorities
Kenmare is focused on:
Unlocking the value of Moma’s 9.0 billion tonnes of Mineral
Resources, through the transition of WCP A to the Nataka ore
zone in late 2025
Delivering consistent ilmenite production, with 20+ years’ mine
life visibility
Maintaining a first quartile position on the industry revenue to
cost curve
Performance in 2023
HMC production in 2023 was 1,448,300 tonnes, a 9% decrease
compared to 2022 (1,586,200 tonnes). Mining was impacted by
an unusually severe lightning strike in February 2023 and power
interruptions throughout the year, leading to a 4% decrease in
excavated ore tonnes. Ore grades also fell by 5% due to WCP
B mining a lower grade wetland area and WCP A mining lower
grades as it approaches the end of its mine path in Namalope.
Total cash operating costs of $228.1 million were up 4% on 2022
($218.7 million), due to increased heavy mobile equipment rental,
higher fuel costs, and costs associated with the severe lightning
strike in Q1 2023.
Outlook for 2024
Preparations for the transition of WCP A to Nataka are expected
to advance significantly in 2024. The total capital cost of the
project to the end of 2027 is anticipated to be $326-341 million,
including up to $179 million to be incurred in 2024. Production in
2024 is anticipated to be in line with 2023 and Kenmare is focused
on maintaining its position as a first quartile producer on the
industry revenue to cost curve.
Links to KPIs
Link to risks
2
3
4
5
7
8
9
11
15
Transition to Nataka
In 2023 the Board approved the Definitive Feasibility Study
(DFS) for the transition of WCP A to the Nataka ore zone.
WCP A will complete its current mine path in Namalope
in late 2025 and commence its move to Nataka. Project
execution for the Nataka transition began in 2023, with
contracts signed for key long lead-time items, such as
two new high-capacity dredges. The transition to Nataka
will unlock the majority of Moma’s Mineral Resources and
secure production for decades to come.
Case study
Kenmare is the world’s largest supplier of ilmenite and the Moma Mine is one of the largest titanium
minerals deposits in the world. The Company has a first quartile position on the industry revenue
to cost curve, allowing it to generate strong cash flow at all stages of the commodity price cycle.
With over 100 years of Mineral Resources at the current production rate, Kenmare has significant
potential for growth when market conditions are right.
20+ years
Mine life visibility in Nataka ore zone
28
Kenmare Resources plc Annual Report and Accounts 2023
KENMARE’S STRATEGY CONTINUED
Strategic priorities
Kenmare is focused on:
Maintaining a strong and flexible balance sheet
Continuing to make robust shareholder returns
Developing value accretive growth opportunities
Performance in 2023
Kenmare finished 2023 with a strong balance sheet and net cash
of $20.7 million. Total dividends are in line with 2022 at $50.0
million and dividends per share are up 3%, benefitting from the
reduced share count following the share buy-back. This is in
line with Kenmare’s dividend policy payout ratio of 20%-40% of
underlying profit after tax, while also taking into account the
Company’s operating performance and product market conditions.
Outlook
The Company continues to be focused on making shareholder
returns, balanced with the necessary investment in the long-term
future of the business. WCP A is expected to transition to the
Nataka ore zone from late 2025 and the capital invested in this
project will support future production from Moma. In addition,
Kenmare’s corporate development team continues to assess
potential opportunities for organic and inorganic growth.
Share buy-back
Kenmare continually reviews its capital allocation in
order to maximise long-term returns to shareholders.
The Company seeks to return value through a combination
of capital appreciation, dividend payments and share
buy-backs. In September 2023, Kenmare completed a
$30 million share buy-back, repurchasing approximately
5.6 million shares, representing 5.9% of the Company’s
issued share capital. The share buy-back was funded from
existing cash resources and supported by the Company’s
operational performance and strong financial position.
Links to KPIs
Link to risks
5
6
7
8
10
11
14
15
ALLOCATE CAPITAL EFFICIENTLY
Case study
Kenmare continuously assesses the best ways to deploy the capital generated from its activities to
ensure it creates value for all stakeholders. A strong balance sheet provides the platform to fund
the Company’s capital requirements, while a dividend policy was established in 2018 to provide
returns to shareholders. Kenmare also works hard to uncover, assess and develop value accretive
projects to deliver growth.
$50.0m
2023 dividend distribution
29
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Summary of the marketplace
2023 was a relatively robust year in Kenmare’s product
markets. Positive momentum carried over from 2022
into H1 2023, however weaker downstream demand
negatively impacted sales volumes and prices in H2. This
resulted in a 10% decrease in average received prices
in 2023 to $418 per tonne compared to 2022 ($463
per tonne) and a 3% decrease in shipments in 2023 to
1,045,200 tonnes compared to 2022 (1,075,600 tonnes).
Nevertheless, customers continued to favour Kenmare’s
high-quality products and stability of supply, which
supported sales of the Company’s products throughout
2023 and this is expected to continue in 2024.
The macroeconomic environment
2023 was a year of macro-economic uncertainty, with
concerns about slowing global growth compounded by
geopolitical conflicts. Inflation remained a significant
issue early in the year, leading to tighter monetary
policies from central banks, which aimed to dampen
demand and investment through interest rate hikes.
The Chinese market, meanwhile, was impacted by a
property market slowdown, in addition to the lingering
effect of COVID-19 restrictions. The weaker real estate
market cast a shadow on the country’s construction
sector, which is a significant consumer of titanium and
zircon products. The Chinese Government responded
with increased investment and special purpose bonds
to support infrastructure projects and cushion the
construction sector slowdown.
Macro-economic uncertainty resulted in low confidence
in the titanium pigment and feedstocks markets
in 2023, with low inventories held throughout the
supply chain. However, reduced inflation in H2 2023
drove expectations that interest rates will decrease in
2024, with the US Federal Reserve indicating that it
anticipates dropping rates at least twice before year-
end. This would support increased economic activity
and underlying demand for Kenmare’s products in 2024,
as well as providing confidence to the market to build
inventories to more normal levels.
72%
ILMENITE
7%
CONCENTRATES
3%
RUTILE
18%
PRIMARY
ZIRCON
2023 REVENUE BY PRODUCT
“CUSTOMERS CONTINUED
TO FAVOUR KENMARE’S
HIGH-QUALITY PRODUCTS
AND STABILITY OF
SUPPLY, SUPPORTING
SALES THROUGHOUT
2023.”
Cillian Murphy
MARKETING MANAGER
30
Kenmare Resources plc Annual Report and Accounts 2023
MARKET REPORT
Kenmare’s markets in 2023
TITANIUM FEEDSTOCKS
The titanium feedstock market experienced a decline in
demand in 2023, mainly due to weakened demand from
the paint and coatings industry. This was caused by
various factors, including the slowdown in the Chinese
property market, on-going geopolitical tensions, and
inflationary pressures that reduced consumer spending,
particularly impacting the DIY sector. Paint and
coatings producers began destocking their inventories
during H2 2022, and this continued throughout 2023.
Consequently, the pigment market remained subdued
throughout most of the year.
However, a significant development in the market was
the increased production and market share captured by
Chinese pigment producers. Chinese producers ramped
up production of both sulphate and chloride pigment,
hitting record highs, and successfully increasing their
global exports. Kenmare’s high-quality ilmenite is
suitable for both processes, but Kenmare has chosen
to prioritise the chloride market due to its rapid growth
and its preference for Kenmare’s low magnesium and
calcium ilmenite.
Large Western pigment producers chose to reduce
their operating rates instead of competing on price
with cheaper Chinese products in 2023. This strategy
reflected their focus on value stabilisation over market
share and demonstrated confidence in a near-term
demand recovery. Western pigment producers reduced
their inventories of both pigment and feedstock
throughout 2023, and as a result, inventories were below
normal at the start of the year. Kenmare saw some
restocking from its customers in Q1 2024.
The market for ilmenite proved to be more resilient than
for other titanium feedstocks in 2023. This was primarily
due to demand from Chinese pigment producers, who
favour using ilmenite instead of high-grade feedstocks.
However, despite their relative resilience, ilmenite prices
declined compared to 2022, reflecting the overall market
softness. Producers of high-grade feedstocks like rutile
reduced production, and this is expected to continue in
2024, benefitting Kenmare.
Contrary to the titanium pigment market, the titanium
metal market grew in 2023 with strong aerospace,
welding and consumer end markets. Chinese production
of titanium metal increased by 24% in 2023 compared
to 2022, according to industry consultant Toodudu.
Kenmare’s ilmenite is upgraded and used in the
production of titanium metal globally.
There is a cautious sense of optimism in the titanium
feedstocks market in 2024. The expansion of Chinese
pigment production and the increasing demand for
titanium metal are positive indicators for a stronger
market and the anticipated reduction in interest rates in
major economies would support underlying demand and
a healthier feedstock market.
TITANIUM FEEDSTOCKS
Kenmare supplies approximately 7% of global
titanium feedstocks through its ilmenite, rutile
and concentrate products. Titanium feedstocks
are a quality-of-life mineral, with consumption
increasing as urban populations grow and
disposable income rises. Titanium minerals have
been listed as a critical mineral by the EU and
US as they are consumed to produce titanium
pigment (accounting for approximately 88% of
demand), titanium metal, and are also used in the
welding market. Titanium pigment is used for
its opacity and brightness and currently has no
substitutes of comparable quality. Titanium metal
is consumed due to its high strength-to-weight
ratio and this market saw strong growth in 2023.
ZIRCON
Kenmare supplies four products containing
zircon and is the fifth largest supplier of zircon
globally. The ceramics industry accounts for
approximately 48% of global zircon demand,
where it is the preferred raw material due to its
unmatched opacifying qualities, high refractive
index, and high melting point. Zircon is also
used in the refractory and foundry industries
and zirconia chemicals. Like titanium minerals,
zirconium is listed as a critical mineral in the EU
and the US. Historically, the major markets for
zircon have been Europe and China, but Kenmare
is seeing increasing demand growth in the Indian
and Latin American markets.
RARE EARTHS ELEMENTS (REEs)
Kenmare supplies REEs through a concentrate
product containing monazite. REEs contained
in Kenmare’s monazite, such as neodymium and
dysprosium, are listed as critical minerals and
are consumed in permanent magnets crucial to
fast-growing markets such as electric vehicles
and wind turbines. Demand for REEs is expected
to grow strongly in the coming years due to the
energy transition.
Kenmare’s products
Read more
about Chinese
market share
on page 34
31
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Zircon
The zircon market weakened in 2023 due to lower
downstream demand, particularly in Europe and China.
In China, the largest market for zircon, demand was
impacted by a weaker real estate market. The Chinese
government implemented stimulus measures in H2
2023, however, these had not flowed through to zircon
demand by year-end. In Europe, challenging macro-
economic conditions resulted in weaker demand for
ceramic products. High inflation and increasing interest
rates in 2023 led to a slowdown in consumer spending
and construction activity, which resulted in lower
production and consumption of ceramic products, such
as tiles and sanitaryware.
The Indian market was the bright point of the zircon
market in 2023, with growth in underlying demand as
well as increased exports of zircon opacifier. This led
to a strong growth in imports of zircon sand into India.
Demand in North America also remained resilient.
The supply dynamics for zircon sand showed significant
change in 2023. Supply from traditional major producers
was rationalised to meet reduced demand. However,
non-traditional sources compensated for this shortfall
in the form of heavy mineral concentrates and swing
supply from countries such as Indonesia. Prices from
these non-traditional sources decreased in H1 2023 and
a wide price gap emerged, forcing all zircon prices down
in H2. However, spot prices stabilised towards the end
of 2023 providing some support for 2024.
Despite the challenging market conditions, Kenmare
was sold out of all zircon products by the end of 2023
due to strong support from its customers and market
preference for Kenmare’s high-quality products.
Cautious buying from consumers has resulted in
generally low inventories in the supply chain and
therefore, Kenmare is currently seeing robust demand
for all of its zircon products in 2024.
KENMARE AVERAGE ILMENITE PRICE RECEIVED
H2
23
H1
23
H2
22
H1
18
H2
18
H1
19
H2
19
H1
20
H2
20
H1
21
H2
21
H1
22
US$ per tonne FOB
400
350
300
250
200
150
100
50
0
48%
“BIG 3”
PRODUCERS
22%
OTHERS
5%
KENMARE
25%
CHINA
48%
CERAMICS
2
%
OTHER
12%
FOUNDRY
18%
REFRACTORY
20%
ZIRCONIA & ZR CHEMICALS
ZIRCON DEMAND BY END USE
ZIRCON MARKET SHARE
93%
OTHER
7%
KENMARE
TITANIUM FEEDSTOCKS MARKET SHARE
32
Kenmare Resources plc Annual Report and Accounts 2023
MARKET REPORT CONTINUED
Rare Earth Elements
While revenues were slightly lower than the record 2022
figure, 2023 was another positive year for Kenmare’s
monazite-based, mineral sands concentrate product.
Demand for monazite continues to exhibit strong growth
due to the contained REEs. REEs are listed as a critical
mineral and are essential to the energy transition. As
a result, the long-term dynamics for monazite remain
encouraging.
In 2023, underlying demand for permanent magnets,
the major consumer of neodymium and praseodymium,
was positive due to increased consumption of electric
vehicles and investment in other clean technologies.
This boosted demand for monazite and consequently,
Kenmare sold all of the mineral sands concentrate it
produced in 2023.
Prices for monazite were volatile through 2023. At the
start of the year, the monazite price was high due to
robust demand. However, a subdued Chinese economy,
as well as increased supply of monazite from concentrate
sources in Africa reversed this momentum. Heavy
Mineral Concentrate production increased in 2023, from
sources such as Chinese producers in Mozambique,
and brought with it higher volumes of monazite. This
concentrate is sold to China and reprocessed into
finished monazite product. It has a strong impact on
the spot price for monazite and the high volumes of
monazite available from reprocessors in China added to
the downward pressure on prices from mid-2023.
Prices for monazite recovered in late 2023 due to stronger
demand and this positive momentum continues into 2024.
The outlook for Kenmare’s mineral sands concentrate
is positive for 2024 and the Company continues to
experience demand in excess of its production.
MONAZITE PRICE
Oct 23
Jan 21
Apr 21
Jul 21
Oct 21
Jan 22
Apr 22
Jul 22
Oct 22
Jan 23
Apr 23
Jul 23
RMB/t
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
72%
RARE EARTH ELEMENTS
8%
RUTILE
20%
ZIRCON
MINERAL SANDS CONCENTRATE
REVENUE SPLIT
33
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
1. Market share by Chinese pigment producers
Approximately 88% of titanium feedstocks are consumed in the
titanium pigment market. In recent years, capacity growth in the
pigment market has been centred around China. Chinese pigment
producers favour a proportionally heavy ilmenite feedstock blend,
fuelling demand for merchant ilmenite, like Kenmare’s ilmenite
products.
Despite softer demand for pigment in late 2022 and 2023, China’s
pigment producers ramped up production of pigment, increasing
8% in 2023 compared to 2022. Lower capital and operating costs
allowed Chinese producers to undercut Western producers and
they competed aggressively on price. Pigment producers in North
America were committed to their value stabilisation strategies,
which prioritised price stability over volumes. This resulted in a
large price gap between Chinese and Western producers, further
increasing China’s global market share. Chinese pigment market
share increased from 48% in 2021 to approximately 57% in 2023.
The titanium pigment market is experiencing a significant shift in
China. Driven primarily by environmental regulations, China has
been transitioning from the traditional sulphate process to the
more environmentally friendly chloride process. The proportion of
chloride pigment production grew from 10% in 2021 to 15% in 2023.
China’s domestic ilmenite is not suitable for the chloride process,
creating a surge in demand for Kenmare’s ilmenite.
CHINESE PIGMENT PRODUCTION
Q4
23
Q3
23
Q2
23
Q1
19
Q2
19
Q3
19
Q4
19
Q1
20
Q2
20
Q3
20
Q4
20
Q1
21
Q2
21
Q3
21
Q4
21
Q1
22
Q2
22
Q3
22
Q4
22
Q1
23
1,200
1,100
1,000
900
800
700
600
500
400
‘000 tonnes
2. Growth in titanium metal consumption
Titanium is a metal that is highly valued for its exceptional
strength-to-weight ratio and resistance to corrosion. It is used
in various industries, such as aerospace, consumer electronics,
jewellery, and sporting goods. Titanium metal production is the
largest growth segment for titanium feedstocks, with global
production increasing by 52% from 2021 to 2023.
Titanium metal is increasingly used by the aerospace industry
to create lightweight aircrafts and improve fuel efficiency.
Additionally, titanium is used in the manufacture of consumer
electronics, with leading manufacturers such as Apple and
Samsung incorporating titanium into their products.
Currently, Kenmare supplies the titanium metal market indirectly
through its sales to ilmenite beneficiation plants. However,
Kenmare is actively looking to increase its sales to the titanium
metal market and seeking closer ties with the major producers.
GLOBAL METAL PRODUCTION
2023
2017
2018 2019 2020 2021 2022
350
300
250
200
150
100
50
0
‘000 tonnes
3. Unprocessed concentrates growing
in market share
The titanium feedstock market is experiencing a shift towards
concentrate mining, where raw materials are extracted without
separation or processing. These heavy mineral concentrates are
exported to China, which has excess processing capacity. This
trend is driven by the lower costs associated with building and
operating processing plants in China.
Concentrate imports into China have grown considerably in recent
years, increasing by approximately 30% from 2022 to 2023. These
concentrate mines operate in many countries such as Nigeria,
Sierra Leone and the US but are centred in Mozambique, which
accounts for approximately 70% of the supply. Ilmenite products
produced from concentrates tend to be lower quality but still
compete in the Chinese pigment market. In countries where these
concentrates are produced, governments are keen to increase the
value added in country, which is presenting a challenge for these
concentrates producers.
CONCENTRATE IMPORTS INTO CHINA
2023
2017
2018 2019 2020 2021 2022
900
800
700
600
500
400
300
200
100
0
‘000 tonnes
52%
Growth in titanium metal consumption
since 2021
34
Kenmare Resources plc Annual Report and Accounts 2023
KEY TRENDS IN KENMARE’S MARKET
4. India’s growing influence on the
zircon market
Europe and China have historically been the two largest markets
for zircon products. However, India is becoming a major region for
zircon demand and also supply.
Of all major zircon consuming regions, India showed the strongest
demand growth for zircon products in 2023. The construction and
real estate sectors are crucial to India’s strong economic growth and
supported demand growth across a range of zircon products, such
as ceramic tiles, which are used in several rooms throughout the
home. While only small quantities of zircon are mined in India, there
has been a large increase in zircon milling capacity in country. This
has led to an increasing trend of zircon sand being imported into
India and opacifier being exported at relatively low prices, resulting
in increased competition in the global market.
Kenmare is exploring options to increase the quantities of its
zircon consumed in India through its mineral sands concentrate
product.
ZIRCON DEMAND AND TILE PRODUCTION IN INDIA
2027f
2017
2018
2019 2020 2021 2022 2023 2024f 2025f 2026f
3,000
2,500
2,000
1,500
1,000
500
0
140
120
100
80
60
40
20
0
‘000 tonnes
‘000 tonnes zircon
India tile production (million square metres)
Zircon demand
5. Natural rutile supply continues
to deplete
Natural rutile supply has been on a downward trend for several
years due to a lack of economically feasible new projects and this
trend continued in 2023.
The two largest rutile suppliers, Base Resources and Sierra
Rutile, both produced lower quantities in 2023. Base Resources
announced that it will stop production at the end of 2024, as the
Kwale orebody reaches the end of its mine life, while Sierra Rutile
announced it would complete production in March 2024 due to a
dispute with the Sierra Leone government about fiscal terms.
Kenmare will likely continue to benefit from reduced rutile
supply as the replacement for rutile is beneficiated ilmenite.
All of Kenmare’s ilmenite products are preferred products for
beneficiation due to their low impurities and this is a market share
that Kenmare has grown in recent years. In addition, Kenmare
supplies rutile to the merchant market and the Company will
benefit from the reduced global supply.
TOTAL RUTILE SUPPLY
2027f
2017 2018
2019 2020 2021 2022 2023 2024f 2025f 2026f
800
700
600
500
400
300
200
100
0
‘000 TiO
2
units
Medium to long-term growth opportunities
1. DETERIORATING ILMENITE PRODUCT QUALITY IN THE MERCHANT
MARKET
Reduced supply of high-quality ilmenite and increased supply of lower quality
ilmenite is impacting the market
Kenmare’s ilmenite products are favoured due to high quality and stability of supply
This further strengthens Kenmare’s ability to place products into the strongest
market segments, benefitting ilmenite sales volumes and prices
2. GROWTH IN USE OF TITANIUM METAL
Increasing global focus on sustainability is driving investments into materials that
reduce consumption of fossil fuels
Titanium metal emerges as a key player due to its exceptional strength-to-weight
ratio (43% lighter than steel)
Leading manufacturers are increasingly incorporating titanium into aircraft frames,
which reduces fuel consumption as titanium is lighter than steel, and this trend is
expected to continue
Applications for titanium extend beyond aviation, potentially revolutionising other
transportation sectors
Kenmare’s ilmenite is used to produce chloride slag and synthetic rutile, which are
vital feed sources in titanium metal production
35
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Strategic
LTIFR
0.15
(per 200k hours)
DESCRIPTION
Measures the number of injuries per 200,000 hours worked
at the Mine, which results in time lost from work.
PERFORMANCE
There was a 25% increase in the Lost Time Injury Frequency
Rate (LTIFR) in 2023 compared to the three-year rolling
average. Action was taken to reverse the trend including
delivery of leadership accountability programmes to
strengthen the safety culture at Moma; improvements made
to the “permit to work” programme, hazard identification
and risk assessment protocols; and the introduction of
a “Trabalho Seguro” (“Safe Work”) initiative promoting
increased safety awareness. This led to zero Lost Time
Injuries in Q4 2023 and the milestone of two million hours
worked without a Lost Time Injury (LTI) achieved in
December 2023.
OUTLOOK
Kenmare is committed to continual
improvement. In 2024, the Group will reinforce
its safety culture through strong safety
leadership, as well as continuing to improve
its hazard identification and risk assessment
practices. In late February 2024, Kenmare was
pleased to pass three million hours worked
without a LTI.
LINK TO STRATEGY
LINK TO RISK
8
0.03
0.09
0.25
0.27
0.15
2119 20 22 23
GHG emissions
57,141
tonnes CO
2
e
DESCRIPTION
Measures total Scope 1 and 2 Greenhouse Gas (GHG)
emissions. Kenmare acknowledges the human contribution to
climate change and aims to reduce emissions from its already
low carbon intensity operations.
PERFORMANCE
Kenmare achieved a 14% emissions reduction in Scope 1
GHG emissions in 2023, largely as a result of the Rotary
Uninterruptible Power Supply and improved efficiencies in
the Mineral Separation Plant (MSP). Kenmare aims to sustain
these reductions as much as possible and achieve its 12%
reduction target by 2024, relative to the 2021 baseline. Diesel
emissions are forecast to increase in 2024, but Kenmare is
working to offset these with energy efficiency projects.
OUTLOOK
Kenmare has an ambition to achieve Net
Zero on its Scope 1 and 2 emissions by 2040,
through decarbonisation of its operations.
Kenmare has been working on its Climate
Transition Plan in 2023 to determine its 2030
target, which will be published in 2024.
LINK TO STRATEGY
LINK TO RISK
4
6
70,437
66.513
59,521
57,814
57,141
2119 20 22 23
Gender diversity
16%
DESCRIPTION
Measures the percentage of female employees at the Moma
Mine. Kenmare recognise the benefits to its business of
supporting diversity, equity, and inclusion for long-term
sustainable success.
PERFORMANCE
Kenmare is working to increase the number of women in its
workforce. At year-end, 16% of Mine employees were women,
compared with 14.5% in 2022, meeting its stretch gender
diversity target for the year. Female representation in Moma
Mine senior management reached 40% in 2023, compared to
25% in 2022.
OUTLOOK
In 2024 Kenmare aims to increase female
representation within its Moma workforce to
17.5%. The Group will progress its structured
programme to increase diversity, including
initiatives such as its target of 90% of
Technical Development Department training
candidates to be women. Kenmare is targeting
20% female employees by the end of 2025.
LINK TO STRATEGY
LINK TO RISK
N/A
12.5
14.5
10.6
7.7
16.0
2119 20 22 23
KENMARE USES VARIOUS FINANCIAL AND NON-FINANCIAL
PERFORMANCE MEASURES TO HELP EVALUATE THE
ON-GOING PERFORMANCE OF ITS BUSINESS.
Linked to the Group’s strategic objectives, the following measures are considered by management to be some of
the most important in evaluating Kenmare’s overall performance year-on-year.
36
Kenmare Resources plc Annual Report and Accounts 2023
KEY PERFORMANCE INDICATORS
LINKS TO STRATEGY
Operate responsibly Deliver long-life, low-cost production Allocate capital efficiently
Operational
Production of
finished products
1,091,500
tonnes
DESCRIPTION
Provides a measure of production from the Mine and is
defined as finished products produced by the mineral
separation process (in tonnes).
PERFORMANCE
Finished product production was down 9% in line with
lower Heavy Mineral Concentrate (HMC) production in
2023, which was 1,448,300 tonnes, compared to 2022
(1,586,200 tonnes). This 9% annual reduction was a
product of a 4% decrease in excavated ore volumes
to 38,549,000 tonnes (2022: 40,029,000 tonnes) and
a 5% decrease in ore grades to 4.38% (2022: 4.61%).
Ore volumes were impacted primarily by the effects
of a severe lightning strike in Q1 and power supply
interruptions, which affected operations throughout
the year. Ore grades were down principally due to Wet
Concentrator Plant (WCP) B mining in wetlands, where
grades were lower than expected, and WCP A mining
lower grade ore as it approaches the end of its mine path
in Namalope.
OUTLOOK
In 2024 HMC production, and consequently
production of finished products, is expected to
be in line with 2023. While excavated ore volumes
are expected to increase relative to 2023, this will
be offset by lower grades as WCP B returns to
mine the wetland areas and WCP A continues to
approach the end of its mine path in Namalope.
LINK TO STRATEGY
LINK TO RISK
1
2
3
4
5
6
7
9
10
1,228,500
1,200,800
840,500
988,300
1,091,500
2119 20 22 23
Shipments
1,045,200
tonnes
DESCRIPTION
Provides a measure of finished product volumes
shipped to customers during the period (in tonnes).
PERFORMANCE
Shipment volumes in 2023 were 1,045,200 tonnes, a
3% decrease compared to 2022, due to more cautious
buying from customers during a period of weaker
demand, compounded by destocking. Despite poor
weather conditions, Q4 was the strongest quarter of
the year for shipments, although some shipments were
deferred to 2024.
OUTLOOK
Shipment volumes are expected to increase in
2024, supported by higher year-end finished
product inventories of 259,100 tonnes (2022:
213,500 tonnes).
LINK TO STRATEGY
LINK TO RISK
4
5
6
7
12
13
1,285,300
1,075,600
853,100
1,029,300
1,045,200
2119 20 22 23
Cash costs
$228.1m
DESCRIPTION
Eliminates freights costs and non-cash costs to identify
the actual cash outlay for production and, as production
levels increase or decrease, highlights operational
performance by providing a comparable cash cost per
tonne of finished product produced over time.
PERFORMANCE
Total cash operating costs increased by 4% in 2023,
compared to 2022. This was as a result of increased
operating costs, mainly due to increased heavy mobile
equipment rental and higher fuel costs. The per tonne
cost increased by 15%, impacted by the 9% reduction
in production of finished products.
OUTLOOK
Total cash operating costs are anticipated to
increase in 2024 due to increased heavy mobile
rental requirements and increased power costs
driven by increased power usage. Cash operating
costs per tonne are expected to increase slightly as
production remains in line with 2023.
LINK TO STRATEGY
LINK TO RISK
1
2
14
15
195.7
218.7
160.3
158.5
228.1
2119 20 22 23
RISK KEY Strategic risks Operational risks Financial risks
1
Permitting, licensing and
Government agreement risk
2
Country risk
3
Geotechnical risk
4
Severe weather events
5
Uncertainty over physical
characteristics of the orebody
6
Loss of production due to power
supply and transmission interruption
7
Asset damage or loss
8
Health, Safety and Environment
9
Material misstatement in the Ore
Reserves & Mineral Resource Table
10
IT security risk
11
Development project risk
12
Industry cyclicality
13
Customer and/or market
concentration
14
Foreign currency risk
15
Aggressive cost inflation
37
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
FINANCIAL
EBITDA
$220.3m
DESCRIPTION
Eliminates the effects of financing, tax
and depreciation to allow assessment
of the earnings and performance of
the Group.
PERFORMANCE
Kenmare generated the second strongest
EBITDA in its history in 2023. However
it decreased by 26% compared to 2022,
which was a record year. This was driven
by mineral product revenue decreasing
by 12%, as a result of a 10% decrease
in average price received and a 3%
decrease in shipment volumes, and total
cash operating costs increasing by 4%.
OUTLOOK
Kenmare expects to generate robust EBITDA in 2024 based on
production guidance and anticipated product pricing.
LINK TO STRATEGY
LINK TO RISK
1
2
3
4
5
6
7
9
10
12
13
14
15
214.2
298.0
75.7
90.7
220.3
2119 20 22 23
Profit after tax
$131.0m
DESCRIPTION
Measures how well Kenmare is managing
costs, increasing productivity and
generating the most profit from its assets.
It is also the basis on which the Group’s
dividend payout ratio policy is applied.
PERFORMANCE
Similarly to EBITDA, profit after tax
in 2023 was the second strongest in
Kenmare’s history at $131.0 million.
However it was down 36% on 2022,
which was a record year, as a result
of lower revenues and slightly higher
operating costs in the financial year.
OUTLOOK
Kenmare anticipates to generate robust profit after tax in
2024. The Group believes the fundamentals for future earnings
remain strong, due primarily to medium- and long-term supply
constraints within the titanium feedstocks industry supporting a
strong commodity market outlook.
LINK TO STRATEGY
LINK TO RISK
1
2
3
4
5
6
7
9
10
12
13
14
15
128.5
206.0
16.7
44.8
131.0
2119 20 22 23
Total capital
expenditure
$69.7m
DESCRIPTION
Provides the amount spent by the Group
on additions to property, plant and
equipment in the period.
PERFORMANCE
Capital expenditure increased by 16%
in the year. $22.8 million related to
development capital and
$18.2 million related to studies for the
transition of WCP A to the Nataka ore
zone in 2025. $28.7 million related to
sustaining capital on operations.
OUTLOOK
Expenditure on development projects and studies is expected
to be approximately $189 million in 2024. These costs primarily
relate to the transition of WCP A to Nataka and Feasibility
Studies for the upgrade works to WCP B.
Improvement projects are expected to cost $6 million in 2024
and relate primarily to upgrades to the MSP.
Sustaining capital costs in 2024 are expected to be
approximately $29 million.
LINK TO STRATEGY
LINK TO RISK
4
5
7
11
12
14
15
60.3
141.5
59.9
68.5
69.7
2119 20 22 23
Read more about Strategy
on page 26
Read more about Risks
on page 76
Read more about Remuneration
on page 124
38
Kenmare Resources plc Annual Report and Accounts 2023
KEY PERFORMANCE INDICATORS CONTINUED
FINANCIAL
Net cash/(debt)
$20.7m
DESCRIPTION
Total cash and cash equivalents less bank
loans and lease liabilities: a measure of
the Group’s financial leverage and an
indication of how Kenmare is managing
its balance sheet and capital structure.
PERFORMANCE
Kenmare finished the year with net
cash of $20.7 million (2022: $25.7
million). This comprised $71.0 million
(2022: $108.3 million) of cash and cash
equivalents and gross debt of $48.8
million (2022: $80.8 million), which
consists of debt outstanding of $47.1
million and loan interest of $1.7 million.
Lease liabilities amounted to $1.5 million
(2022: $1.8 million).
OUTLOOK
On 4 March 2024, the Group entered into a $200 million Revolving
Credit Facility (RCF) with its existing lender group. The interest rate
is 4.85% plus SOFR with a term of five years. The RCF replaces the
existing corporate debt facilities and will be used to fund the Group’s
capital requirements over the next few years, in particular the
transition of WCP A to Nataka.
LINK TO STRATEGY
LINK TO RISK
6
7
11
14
15
(85.0)
25.7
(67.4)
9.2
20.7
2119 20 22 23
Shareholder
returns
$80.0m
DESCRIPTION
Shareholder returns comprise dividends
and share buy-backs.
PERFORMANCE
Shareholder returns in respect of 2023
were $80.0 million. This comprised an
interim dividend of $15.6 million and a final
dividend of $34.4 million, totalling $50.0
million, and a share buy-back of $30.0
million. The 2023 final dividend is to be
approved by shareholders at the AGM.
OUTLOOK
Kenmare will maintain a target dividend payout ratio of 20%-40% of
underlying profit after tax, as part of its strategic priority to allocate
capital efficiently.
Additional capital returns will be considered against upcoming
capital requirements (particularly the transition of WCP A to
Nataka), maintaining a strong balance sheet, and market conditions.
LINK TO STRATEGY
LINK TO RISK
1
2
3
4
5
6
7
10
12
13
14
15
32.1 82.7
0.5
51.5
11.0
9.0
50.0 30.0
2119 20 22 23
Return on Capital
Employed
13%
DESCRIPTION
Return on Capital Employed (ROCE) is
defined as operating profit expressed
as a percentage of the average capital
employed. ROCE is a measure of
the profits generated in the year in
comparison to the capital investment
that has been made in the Company.
PERFORMANCE
The Group continued to generate very
strong returns on capital employed.
However ROCE decreased by 35%
in 2023 driven by lower earnings in
the year.
OUTLOOK
Kenmare will continue to focus on maximising returns from the
Moma Mine over the short, medium and long-term. The Group
will also maintain its disciplined and rigorous approach and invest
capital only in projects that Kenmare believes will deliver returns
that are well above its cost of capital.
LINK TO STRATEGY
LINK TO RISK
1
2
3
4
5
6
7
10
12
13
14
15
15
20
3
6
13
2119 20 22 23
LINKS TO STRATEGY
Operate responsibly Deliver long-life, low-cost production Allocate capital efficiently
RISK KEY
Strategic risks Operational risks Financial risks
1
Permitting, licensing and
Government agreement risk
2
Country risk
3
Geotechnical risk
4
Severe weather events
5
Uncertainty over physical
characteristics of the orebody
6
Loss of production due to power
supply and transmission interruption
7
Asset damage or loss
8
Health, Safety and Environment
9
Material misstatement in the Ore
Reserves & Mineral Resource Table
10
IT security risk
11
Development project risk
12
Industry cyclicality
13
Customer and/or market
concentration
14
Foreign currency risk
15
Aggressive cost inflation
39
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
NAMALOPE
NATAKA
MUALADI
NAMPULA
Mineral
Separation
Plant
PILIVILI
Conveyor
and jetty
Previously
mined area
km
0 2 4 6 8
C
A
B
KENMARE’S MOMA TITANIUM
MINERALS MINE IS LOCATED ON
THE NORTH EAST COAST OF
MOZAMBIQUE. IT IS ONE OF THE
LARGEST TITANIUM MINERALS
DEPOSITS IN THE WORLD AND
BEGAN PRODUCTION IN 2007.
Moma has a low environmental impact, as Kenmare
progressively rehabilitates the land as it is mined. Moma also
benefits from access to low-cost, renewable electricity (from
the Cahora Bassa Hydroelectric Complex), to supply over
90% of the Mine’s requirements.
Kenmare utilises three Wet Concentrator Plants (WCPs) to
mine the Moma deposit, two of which are in the Namalope
ore zone and one in the Pilivili ore zone.
Mozambique
Kenmare began exploring for titanium minerals in
Mozambique in 1987 and has had a presence in country
for over 30 years. Mozambique lies on the south east
coast of Africa, with an area of almost 800,000 km
2
and
a coastline of 2,470 km.
Mozambique is a mining-friendly jurisdiction with
a growing natural resources industry. In addition to
titanium minerals, coal, gold and aluminium are all
exported from Mozambique. The discovery of the
Rovuma basin natural gas fields in the north of the
country in 2011 is set to transform the economy in
the coming decades, with an estimated $20+ billion
investment underway from several multinational
companies. The first offshore project in the Rovuma
Basin commenced production in January 2022.
Working in partnership
During Kenmare’s 30-year history in country, the
Company has fostered strong relationships with the
Government of Mozambique, local authorities, and
its host communities. The Government has always
upheld the terms of the Company’s licences and other
agreements, and Kenmare values their partnership
highly. Moma’s production accounts for approximately
7% of Mozambique’s exports.
Good governance
Kenmare has been named as the most transparent
company in Mozambique for three consecutive years
by the Centre for Public Integrity’s Extractive Industry
Transparency Index, most recently in 2022. Mozambique
is one of 52 countries that implements the Extractive
Industries Transparency Initiative (EITI) and Kenmare
representatives have been on Mozambique’s EITI
coordinating committee since its inception in 2009.
Democracy in action
Democratic elections have been held every five years in
Mozambique since 1994, with the most recent election
held in October 2019. The next election will be held
in 2024.
AFRICA
Kenmare’s Managing Director Michael Carvill with Moma employee
Solomon Manuel and Irish Government Minister Conor Lenihan in 2006,
ahead of Moma delivering first production in 2007.
40
Kenmare Resources plc Annual Report and Accounts 2023
KENMARE’S OPERATIONS
NAMALOPE
NATAKA
MUALADI
NAMPULA
Mineral
Separation
Plant
PILIVILI
Conveyor
and jetty
Previously
mined area
km
0 2 4 6 8
C
A
B
WCP A has been mining the
Namalope ore zone since
2007 and is scheduled to
continue mining there until
late 2025, when it will move
to Nataka, the largest ore
zone within Moma’s portfolio.
Within Nataka, a high grade
mine path has been identified
that WCP A will mine for
20 years. WCP A has a
throughput capacity of 3,250
tonnes per hour (tph).
WCP A
WCP B mined the Namalope
ore zone from 2013 to August
2020. In September 2020,
WCP B was relocated to
the high grade Pilivili ore
zone and it recommenced
production two months
later. Pilivili was chosen due
to a number of favourable
characteristics. WCP B has a
throughput capacity of 2,400
tph, following the upgrade
work undertaken in 2018.
WCP B
WCP C is the newest and
smallest of the three Wet
Concentrator Plants. It
commenced production in
February 2020 and it has a
throughput capacity of 500
tph, representing one-fifth of
the size of WCP B and one-
sixth of the size of WCP A.
WCP C is mining a high grade
area of the Namalope ore
zone, which is inaccessible
to the two larger Wet
Concentrator Plants.
WCP C
Read more about
stakeholder
engagement on
page 22
Read more about
the Nataka
transition on
page 47
Moma Mine
Maputo
Mozambique
MAPUTO
MOZAMBIQUE
41
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Kenmare progressively rehabilitates and returns land to the community. The Company
also supports its host communities through its not-for-profit organisation, the Kenmare
Moma Development Association (KMAD), which was established in 2004.
1.
EVALUATION
The mine plan is designed
and scheduled based on
Kenmare’s Proved and
Probable Ore Reserves.
Kenmare is currently
mining the Namalope
and Pilivili ore zones,
with plans to commence
mining the Nataka ore
zone from late 2025.
2.
MINING
Dredging takes place
in three artificial ponds,
where four dredges feed
three Wet Concentrator
Plants (A, B and C). The
dredges cut into the
ore at the pond’s base,
causing the mineralised
sand to slump into the
pond where it is pumped
to a WCP. Kenmare also
has two dry mining
operations to supplement
ore feed to WCP A.
3.
WET
CONCENTRATOR
PLANT (WCP)
The first processing
stage at the WCPs
consists of rejecting
oversize material. Next,
the ore feed is passed
over progressive stages
of gravity spirals, which
separate the Heavy
Mineral Concentrate
(HMC) from tailings
(silica sand and clay).
4.
DUNE
REHABILITATION
Tailings are deposited
into a series of settling
ponds, dried and
re-contoured, with the
previously removed
topsoil redeposited.
Rehabilitation is
completed by planting a
variety of vegetation as
well as food crops. The
area is then transferred
back to the local
communities.
5.
HEAVY MINERAL
CONCENTRATE
HMC is pumped to
the Mineral Separation
Plant (MSP), where
it is stockpiled
prior to further
processing. HMC consists
of valuable heavy
minerals (ilmenite, zircon,
rutile, and monazite,
which is sold as part of
Kenmare’s concentrates
product stream), other
heavy minerals, and a
small amount of other
minerals (the bulk of
which is silica sand).
Read more about Moma’s Mineral Reserves and
Resources on page 48
Read more about Kenmare’s progressive land
rehabilitation on page 71
KENMARE’S OPERATIONAL PROCESS IS WELL
ESTABLISHED AND ENVIRONMENTALLY SOUND.
The Moma Mine is a low-cost, bulk mining operation that predominantly uses dredges
to mine almost 40 million tonnes of titanium-rich sands per year.
Mining
42
Kenmare Resources plc Annual Report and Accounts 2023
OPERATING PROCESS
>90%
Electricity from
renewable source
(hydropower)
0
Toxic chemicals
used in operations
187 ha
Land rehabilitated
in 2023
204k
Trees planted
in 2023
Other infrastructure
Other infrastructure on site includes a 170km 110kV
power transmission line, a sub-station, a 9.6 MW
diesel generator plant, an accommodation village,
offices, a laboratory, an airstrip, water supply and
sewage treatment plants.
6.
WET HIGH
INTENSITY
MAGNETIC
SEPARATION
HMC is transferred from
stockpiles by front-end
loaders and fed to the
Wet High Intensity
Magnetic Separation
(WHIMS) plant to
separate magnetic from
non-magnetic fractions.
7.
MAGNETIC,
GRAVITY AND
ELECTROSTATIC
SEPARATION
The MSP uses magnetic,
gravity and electrostatic
circuits to separate the
valuable minerals of
ilmenite, rutile, zircon and
monazite into individual
products. The magnetic
fraction of WHIMS output
is dried and processed by
electrostatic separation
to produce ilmenite
products. The non-
magnetic fraction of the
WHIMS output passes to
the wet gravity separation
circuit to remove silica
and trash minerals.
Electrostatic separators
are then used to separate
the conducting mineral
rutile from the non-
conducting minerals
zircon and monazite.
8.
PRODUCT
STORAGE
WAREHOUSE
Ilmenite and rutile are
stored in a 229,000 tonne
capacity warehouse,
which also contains
an enclosed area to
store the mineral sands
concentrate product
(containing monazite).
Zircon is stored in a
separate 35,000 tonne
capacity warehouse to
reduce the potential for
cross-contamination.
The warehouses load the
products onto a 2.4 km-
long overland conveyor.
9.
CONVEYOR,
JETTY AND
TRANSSHIPMENT
The conveyor transports
product to the end of
a 400 metre-long jetty,
where product is loaded
onto transshipment
vessels, at a rate of 850
tonnes per hour. Kenmare
owns and operates two
transshipment vessels, the
Bronagh J and the Peg.
10.
OCEAN-GOING
BULK CARRIER
The vessels transport the
products to a deep water
transshipment point
10 km offshore, where
they self-discharge into
ocean-going third-party
vessels. These vessels
then transport the final
products to multiple
destinations around
the world.
Processing Storage and export
STRATEGIC REPORT
43
Kenmare Resources plc Annual Report and Accounts 2023
Introduction
The health and safety of Kenmare’s workforce is the
Company’s highest priority. Following an increase in
Lost Time Injuries (LTIs) from late 2022 into 2023,
management took decisive action to improve risk
management, leadership accountability for safety, and
standards of work. The results of these initiatives bore
fruit in H2, with reduced incidents and injuries, and
by year-end, Kenmare had achieved two million hours
worked without an LTI. Despite this, the Company’s
rolling 12-month Lost Time Injury Frequency Rate
(LTIFR) to 31 December was 0.15, above the Company’s
three-year average, so in 2024 Kenmare is looking to
build on this positive momentum.
Operations were challenging in H1 2023 due to an
unusually severe lightning strike, leading ilmenite
guidance to be revised downwards in July. Production
strengthened in H2, with a run rate of over 1.1 million
tonnes per annum of ilmenite achieved on a consistent
basis. The operations team’s focus in 2024 is on delivery
and maintaining Kenmare’s first quartile position on the
industry revenue to cost curve.
2023 was an important year for development projects
with progress made on a number of fronts. Execution
is underway on the upgrade of Wet Concentrator Plant
(WCP) A ahead of its transition to Nataka, which will
unlock the majority of Moma’s 9.0 billion tonnes of
Mineral Resources. The Definitive Feasibility Study
(DFS) for the upgrade of WCP B is due to be completed
in Q2 2024, in addition to further Pre-Feasibility Study
(PFS)-stage work on Congolone, Kenmare’s potential
future growth opportunity.
Mining
Heavy Mineral Concentrate (HMC) production in 2023
was 1,448,300 tonnes, down 9% compared to 2022
(1,586,200 tonnes), although with significantly improved
production in H2 (814,400 tonnes versus 633,900
tonnes in H1 2023). The 9% annual reduction was a
product of a 4% decrease in excavated ore volumes
to 38,549,000 tonnes (2022: 40,029,000 tonnes) and
a 5% decrease in ore grades to 4.38% (2022: 4.61%).
Ore volumes were impacted primarily by the effects
of the severe lightning strike in February 2023 and
power supply interruptions, which affected operations
throughout the year. Ore grades were down principally
due to WCP B mining in wetlands, where grades were
lower than expected, and WCP A mining lower grade ore
as it approaches the end of its mine path in Namalope.
Reduced power reliability in 2023
As previously reported, an unusually severe lightning
strike hit power lines close to the Mine in February 2023.
An Electricidade de Moçambique (EdM) protection
breaker failed to trip when the lightning struck and
this resulted in extreme power surges, which caused
damage to variable speed drives on the Mine’s pumping
and dredging equipment. Following this, a co-ordinated
Higino Jamisse
MOMA MINE GENERAL MANAGER
“2023 WAS AN IMPORTANT
YEAR FOR DEVELOPMENT
PROJECTS, WITH
EXECUTION UNDERWAY
ON THE WCP A UPGRADE”
Ben Baxter
CHIEF OPERATIONS OFFICER
44
Kenmare Resources plc Annual Report and Accounts 2023
OPERATING REVIEW
programme of repairs and spares restocking was
undertaken to support operations throughout Q2. A
key learning from the incident was that certain relay
equipment prevented damage and as a result, all drive
relays have subsequently been changed to this type.
In addition, the Company has initiated a project to
develop its own electrical incoming breaker to provide
an additional line of defence to the protection offered by
the EdM transmission system.
The reliability of grid power was also impacted in the
second half of the year, firstly by a failure of the EdM
STATCOM in Nampula, which is a device that supports
the voltage in the country’s northern grid network.
Kenmare agreed to fund international contractors
to repair this unit to expedite the process. Secondly,
switching irregularities in the national network
triggered voltage disturbances and outages. The
increase in voltage drops and outages had a negative
effect on the reliability of Mine electrical equipment,
resulting in increased downtime and higher repairs and
maintenance costs throughout the year.
The synchronous condenser (a voltage stabilisation
device referred to as a “Dip Doctor”, which alleviates
approximately 80% of the dips and spikes in power
supply to the Mine) performed well during the year and
continues to bring significant value to the business.
The Rotary Uninterruptible Power Supply (RUPS) also
provided substantial benefits to the Mineral Separation
Plant (MSP) in 2023, including protecting it during the
lightning strike.
Overall, 6% of operating time was lost across Kenmare’s
mining operations due to power interruptions in
2023, compared to the expected 3%. This was due to
a combination of the outages and the resulting time
required for de-sanding of pipelines and circuits,
following power interruptions.
Looking ahead, EdM is expected to commission a
new 400 kV line to Alto Molocue in H1 2024. This will
provide a dual line, an improvement on the current
single line, and bring transmission reliability to an area
of the grid that has been highly susceptible to outages
in the past. In addition, the Company continues to liaise
with EdM to establish ways to improve reliability and
increase standards of maintenance.
Wet Concentrator Plant A
Slimes remained a significant impediment to operations
at WCP A in 2023, impacting throughputs and
recoveries. Consequently, throughputs at WCP A were
limited to 2,700 tonnes per hour (tph), despite existing
processing capacity to run at average rates of 3,250 tph.
This issue will be resolved by the upgrade of WCP A
in preparation for mining at Nataka. Settling paddocks
were well managed during the year, with new paddocks
added to create additional surface area for settling. This
avoided any significant downtime events and utilisations
were at historical highs of 73% for the year.
Progress was made throughout the year on recoveries at
WCP A. This included the implementation of additional
raw water into the mining pond as well as the addition of
raw water to the spiral circuits, which delivered stronger
recoveries from April onwards (78%, rising to 85%).
Wet Concentrator Plant B
WCP B’s operating performance was impacted primarily
by lost operating time associated with both the lightning
strike in Q1 2023, which caused extensive electrical
equipment failures, and the lower grades experienced as
a result of mining in wetland areas.
WCP B mined former wetlands in Pilivili for the first
time in 2023. This process released deeply buried root
material that could not be cleared prior to mining,
reducing throughputs, although this issue was overcome
with increased screening. The grades mined in the
wetlands were also below expectations. A review of the
Mineral Resource drilling conducted in the late 1990s
by a contractor identified a lower than usual number of
drill holes used to calculate the Mineral Resource, due
to the difficulty of drill access and the environmental
Read more
about
Kenmare’s
sustainability
performance
on page 58
73
72
63
71
70
21
Utilisation (%)
19 20 22 23
MINE OVERALL
UTILISATION (%)
5,200
5,400
5,200
4,800
5,400
2119 20 22 23
Sum spiral feed rate (t/hr)
MINING THROUGHPUT (T/HR)
1.45Mt
HMC production in 2023
38.5Mt
Excavated ore volumes in 2023
45
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
disturbance. The wetland areas of Pilivili have now been
extensively redrilled by Kenmare and these grades align with the
actual grades being recorded.
Dry mining continued to be eliminated at WCP B in 2023 as dredge
mining was able to deliver sufficient volumes of ore, benefitting
operating costs.
Wet Concentrator Plant C
WCP C had a challenging H1 2023 due to the planned crossing of
an area of tailings taking four months to complete instead of the
expected two months. This was due to a difficult decline in the
mining floor, which complicated pond water management. In H2
2023, WCP C’s mine path incorporated thinner, high grade deposits,
again leading to reduced productivity. However from late Q1 2024,
WCP C is planned to move into a long-term, more productive dredge
path expected to deliver nameplate capacity through to 2030.
Mining outlook
Mining will continue to remain the key bottleneck to production of
finished products in 2024, with production guidance for the year
set at similar levels to 2023. The average grade is expected to be
approximately 4% THM in 2024, as a consequence of the lower grades
encountered at WCP B as well as declining grades for the last years
of WCP A’s current mine path. As such, there is renewed focus by the
operations team to ensure strong throughput rates and utilisations.
Processing
Total finished products in 2023 were 1,091,500 tonnes, a 9% decrease
compared to 2022 (1,200,800 tonnes), in line with reduced HMC
production. After a challenging H1 due primarily to the lightning
strike limiting feed availability, production improved in H2, with a run
rate exceeding 1.1 million tonnes of ilmenite on an annualised basis.
For 2023, ilmenite production was 986,300 tonnes and within the
revised guidance range of 980,000 to 1,040,000 tonnes. Production
of primary zircon and rutile was within original guidance and
concentrates production exceeded original guidance.
Ilmenite production in 2023 was down 9% compared to 2022
(1,088,300 tonnes), broadly in line with the 8% reduction in HMC
processed. Variations in feed supply impacted the non-magnetic
circuits more than ilmenite circuits as a result of increased
circuit de-sanding and lower recoveries. Zircon production was
51,100 tonnes, down 12% on 2022 (58,400 tonnes), while rutile
production was 8,400 tonnes, down 6% (8,900 tonnes) as a result
of the lower recoveries, down 13% and 9% for zircon and rutile
respectively. The RUPS supported recoveries in line with its design
but was temporarily offline during Q2 and Q3 for design upgrades,
and also suffered some minor outages in Q4 leading to high
disturbance levels in the plant, which are now resolved. A recovery
improvement plan has been initiated for 2024.
Production of concentrates was at record levels of 45,700 tonnes,
up 1% on 2022 (45,200 tonnes), as a result of higher production of
Mineral Sands Concentrate (MSC). This was due to a strong mix
of monazite-rich feed sources. Production of secondary zircon
concentrate meanwhile reduced by 5%. Together, concentrates
production captured much of the lost recovery in the primary
zircon and rutile products.
Shipping
Shipments in 2023 were 1,045,200 tonnes, a 3% decrease compared
to 2022 (1,075,600 tonnes). This was due to lower production
and more cautious buying from customers during this period of
weaker demand, compounded by customers’ destocking. Shipping
operational productivity ran smoothly during the year, with excellent
transshipment fleet availability and cycle times. The effects of poor
weather in Q4 delayed some shipments from December into 2024.
Shipments during the year comprised 939,000 tonnes of ilmenite,
51,300 tonnes of primary zircon, 7,900 tonnes of rutile and 47,000
tonnes of concentrates. A total of 42 ocean-going vessels visited
Moma’s dedicated port facilities during 2023.
2024 production guidance
Kenmare’s 2024 guidance for production is as follows:
PRODUCTION UNIT
2024
GUIDANCE
2023
ACTUAL
Ilmenite tonnes 950,000–1,050,000 986,300
Primary zircon tonnes 45,000–50,000 51,100
Rutile tonnes 8,000–9,000 8,400
Concentrates
1
tonnes 37,000–41,000 45,700
1
Concentrates include secondary zircon and mineral sands concentrate.
Production of all finished products in 2024 is expected to be at
similar levels to 2023, with increased mining rates anticipated to
offset falling ore grades. Consequently ilmenite production in 2024
is expected to be between 950,000 tonnes and 1,050,000 tonnes.
Production is anticipated to be weighted towards H2 due to the
grade profile. Closing product inventories at the end of 2023 were
above normal levels, providing the opportunity to maintain sales
volumes with lower production in H1 2024.
Total cash operating costs are anticipated to increase to $219-
243 million in 2024, largely due to cost increases in production
overheads and power. Expenditure on development projects
1,119,400
1,088,300
756,000
892,900
986,300
2119 20 22 23
Total ilemenite (t)
ILMENITE
PRODUCED (T)
56,200
58,400
43,200
46,900
51,100
2119 20 22 23
Total zircon (t)
ZIRCON
PRODUCED (T)
8,900
8,900
6,000
8,300
8,400
2119 20 22 23
Total rutile (t)
RUTILE
PRODUCED (T)
46
Kenmare Resources plc Annual Report and Accounts 2023
OPERATING REVIEW CONTINUED
and studies is expected to be approximately $189 million in
2024. These costs primarily relate to the transition of WCP A to
Nataka and feasibility studies for the upgrade works to WCP B.
Improvement projects are expected to cost $6 million in 2024 and
relate primarily to upgrades to the MSP. Sustaining capital costs in
2024 are expected to be approximately $29 million.
Development projects
Transition to Nataka
Preparations for WCP A’s transition to Nataka were the main
focus of Kenmare’s projects team in 2023. WCP A is the largest of
Kenmare’s three WCPs and Nataka is the largest ore zone within
Moma’s portfolio. Transitioning WCP A to Nataka will unlock the
majority of Moma’s Mineral Resources and secure production from
Moma for decades to come.
The PFS for the WCP A upgrade and Nataka transition was
completed in Q1 2023. Key elements of the PFS included:
• Two higher capacity dredges with auxiliary hydro-guns – these
will be able to deliver in excess of 4,500 (tph) of run of mine
feed. The dredges have the capacity to cut the harder ore in
Nataka and the hydro-guns will provide safe and consistent ore
feed to the WCP
• Upfront desliming circuit - in order to effectively manage
the higher slimes conditions in Nataka, an upfront desliming
circuit will be required, which will include replacing the existing
trommel screens and surge bin with vibrating screens and a
new surge bin and adding desliming feed cyclones. Following
this work, 3,250 tph of deslimed feed will be delivered to WCP
A’s rougher spirals
• Tailings Storage Facility (TSF) – the TSF will replace the current
paddock slimes settling system, further increasing WCP A’s
ability to manage higher slimes at Nataka
• Various new infrastructure will be required to accommodate
WCP A in Nataka, as it is a greater distance from the MSP than
the current Namalope operations, such as roads and electrical
and pumping systems
Following these upgrades, the majority of WCP A will be new and
fit for purpose in Nataka. WCP A will have significantly improved
ability to manage increased slimes, which currently inhibit feed
rates and recoveries. The higher capacity dredges remove the
need for supplementary dry mining, which is higher cost than
dredge mining and the TSF will eliminate the now expensive
paddock slimes settling system. This is expected to simplify future
operations and ensure Kenmare remains in the first quartile of the
industry cost to revenue curve.
The DFS for the key elements of the WCP A upgrade was
approved by the Board in December to move into the execution
phase, with work now well underway. The current status of the
project is as follows:
• The two new dredges were ordered in September 2023 and
fabrication commenced in Q1 2024, with commissioning
expected from May 2025
• The cutting of steel for the floating pontoons on the WCP A
desliming plant commenced at the beginning of 2024, with
commissioning expected in May 2025
• Detailed design work for the TSF has commenced, with
commissioning expected in Q3 2025
A DFS for additional infrastructure required for the Nataka
operations from 2026 onwards is underway and due to be completed
in Q2 2024, ahead of the commencement of operations at Nataka.
The capital cost estimate for the project is $326 to 341 million to the
end of 2027, including the additional infrastructure. Cost estimates
increased between the PFS and DFS due to changes in scope/design
(approximately 60%) as opportunities were taken to mitigate execution
risk of the project and enhance long-term operational capacity;
additional indirect costs (approximately 25%) as a result of greater
governance and schedule risk mitigation; and contingency additions
(approximately 15%) to account for quantitative risk mitigation for
schedule overrun and the remote location of the Mine. A significant
component of these increases was the effects of capital cost inflation
during the period. Kenmare is actively looking for opportunities to
optimise the scope, design and execution of the project.
WCP B upgrade
During 2023 Kenmare also delivered a PFS on a potential upgrade
of WCP B’s capacity by over 40%, from 2,400tph to 3,400tph.
This project would support delivery of increased production on a
sustainable basis and following the upgrade, WCP B would be the
largest of Kenmare’s three mining plants by capacity.
The PFS had an estimated capital cost of $43 million and a
compelling payback period. The upgrade work would include:
• An upgrade to WCP B’s existing dredge plus the addition of one
of the two existing dredges from WCP A, which are due to be
replaced as part of the WCP A upgrade
• 1,000 tph additional spirals feed capacity
• An upgrade to the tailings system
A DFS for the project is now underway and is due to be completed
in Q2 2024, although final investment decision has been deferred
to increase financial flexibility during the WCP A upgrade work.
Outlook
2023 was a disappointing year for Kenmare from a production
perspective, but the operations team is committed to improving
outputs in 2024 in order to achieve guidance, while maintaining
its recent strong safety performance. The year began well from
this perspective, with three million hours worked without an LTI
passed in late February 2024.
The preparations for the transition to Nataka will accelerate in
2024, with work now well underway on the key components of the
WCP A upgrade. This project secures a long and efficient mine life
for WCP A in Nataka, with mine path visibility for the next 20 years.
Finally, in 2024 Kenmare will continue its focus on the development
of its people. The Company is proud that its workforce is now 97%
Mozambican and 16% female, creating opportunities for all. In 2024,
Kenmare will see the continuation of its full role delivery programme
for leaders and work will continue on its progression routes
programme, which ensures a career development plan is in place
for all employees. Kenmare is proud of its team at Moma and the
operational leadership team would like to express its thanks to all
employees for their contribution towards building a safer and more
productive working environment in 2023 and for the year ahead.
Ben Baxter
CHIEF OPERATIONS OFFICER
47
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
1.4bnt
Total Ore Reserves
9.0bnt
Total Mineral Resources
200Mt
Ilmenite Mineral Resources
48
Kenmare Resources plc Annual Report and Accounts 2023
MINERAL RESERVES AND RESOURCES
Ore Reserves and Mineral
Resources
Introduction
Moma is a globally significant titanium minerals deposit.
Moma has nine billion tonnes of Mineral Resources
(including Ore Reserves), which includes 200 million
tonnes (Mt) of ilmenite, which is equivalent to over
100 years of production at the current production rate,
plus the co-products of zircon, rutile and mineral sands
concentrate.
The Moma deposit benefits from abundant fresh water,
no overburden, a robust ore grade and attractive
products that do not have to be upgraded before being
used. This gives the Company the ability to mine,
concentrate and separate its products with relatively
low capital and operating costs, in part due to more
than 90% of electricity consumed being derived from
low-cost hydroelectric power. Kenmare also operates
a dedicated port facility adjacent to the Mineral
Separation Plant (MSP), which allows for the shipment
of products to customers at minimum cost.
Summary of Ore Reserves and Mineral
Resources
The total proved and probable Ore Reserves in the
Namalope, Pilivili, and Nataka mining concessions are
estimated at 1,429 Mt grading 3.2% Total Heavy Minerals
(THM). This represents 38Mt ilmenite (grading 2.6%),
2.4Mt zircon (grading 0.17%), and 0.79Mt rutile (grading
0.055%), as at 31 December 2023.
The total Mineral Resources (excluding Ore Reserves)
held by the Group under a combination of mining
concessions is estimated at 7.5 billion tonnes, grading
2.7% THM. This breaks down to 162Mt ilmenite (grading
2.2%), 11Mt zircon (grading 0.14%) and 3.5Mt rutile
(grading 0.047%), as at 31 December 2023. Details are
set out in the Ore Reserves and Mineral Resources table
on page 51.
49
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
l
km
0 10 20 30
Nampula
Province
NAMPULA
NAMETIL
MOGINCUAL
QUINGA
ANGOCHE
NATAKA
MOMA
LARDE
Zambézia
Province
153C
Quinga
North
270C
Congolone
and Marrua
735C
Mineral Lease
NAMALOPE
MUALADI
PILIVILI
MPUITINE
Moma Mine
Maputo
Mozambique
MAPUTO
2023 update
The process and the generation of the revised Ore Reserve and
Mineral Resource statement has been completed with guidance from
independent specialists, SRK, who have assessed the methodologies
in place to generate Ore Reserves and Mineral Resources. As part of
this exercise, a review of cut-off grade protocols has led to revisions
to Ore Reserves and Mineral Resources in certain ore zones, with
increases in contained tonnage, but at a reduced average grade. This
preferred methodology had already been in use for many years in the
scheduling of production forecasts and in the Company’s strategy
of maximising Heavy Mineral Concentrate (HMC) production to
meet MSP capacity but had not been applied in the determination of
certain Ore Reserves and Mineral Resources. This is rectified in this
update, with minimal impact in the Namalope, Pilivili and Nataka ore
zones for WCP A, WCP B and WCP C, but impacts are seen in the
Mineral Resource estimates for Congolone, Marrua and Mpuitine.
The Namalope deposit continues to be mined by WCP A and WCP
C. The Pilivili deposit continues to be mined by WCP B. Reductions
in the Ore Reserve statement relate to depletion from mining in
2023 and dredge path revisions that were made during the year to
optimise the mine plan.
The Namalope Ore Reserves comprise 72Mt of ore grading 3.3% THM,
representing 2Mt contained ilmenite (grading 2.7%), 0.13Mt zircon
(grading 0.18%) and 0.05Mt rutile (0.063%). A further 6,336 metres
(m) of drilling was undertaken at Namalope in 2023 to improve
orebody knowledge, comprising mineral fractionation sampling for
the 2024 and 2025 mine paths; mining floor definition works for the
WCP A mine path; further drilling of identified deeper ore that could
be exploited by supplementary dry mining to feed WCP A; and CPTu
drilling to provide increased information relating to orebody hardness.
Nataka is the largest ore zone within Moma’s portfolio,
representing almost 70% of Moma’s total Mineral Resources. The
Definitive Feasibility Study for the key elements of the transition
to Nataka was completed in 2023, with the Ore Reserve status
further updated from the Pre-Feasibility Study (PFS), adding
geological interpretation and mine path optimisation of the
transition channel linking the end of Namalope mine path and
the Nataka 20-year mine path. Nataka comprises probable Ore
Reserves of 1,240Mt grading 3.1% THM, which represents 33Mt of
contained ilmenite (grading 2.6%), 2.03Mt zircon (grading 0.16%)
and 0.66Mt rutile (grading 0.05%).
The Pilivili Ore Reserves comprise 117Mt of ore grading 3.4%
THM, with 3.2Mt of contained ilmenite (grading 2.8%), 0.24Mt
zircon (grading 0.20%) and 0.08Mt rutile (grading 0.069%). The
2023 Pilivili drilling programme comprised 8,938m of drilling and
focused on improving orebody knowledge in the south western
area within the former wetlands of Pilivili.
During 2023, grades encountered by WCP B in the Pilivili ore zone
were below expectations. This area was drilled in the late 1990s
and this work overestimated heavy mineral content. Infill drilling
of the wetland areas was undertaken in 2023, including in areas
inaccessible due to environmental sensitivity in the past. Future
wetland grades have now been reassessed in line with the actual
mining recoveries experienced in 2023.
Kenmare is currently preparing a PFS for the Congolone ore zone,
which represents a potential future growth opportunity for the
Company. The Congolone Mineral Resource increased by 24% to
352Mt of ore grading 3.0% THM. This represents 8.5Mt contained
ilmenite (grading 2.4%), 0.7Mt zircon (grading 0.19%), and 0.2Mt
rutile (grading 0.06%). This increase is due to:
• A 5% increase in the Measured Mineral Resource to 216Mt,
maintaining a similar grade of 2.56% ilmenite as opposed to
2.67% reported in the 2022 statement
• Additional areas to the south of the Measured Mineral
Resources have been drilled on a 500x250m grid in 2023, with
938m of drilling and sampling completed. This has allowed
conversion of previously Inferred and unclassified Mineral
Resources into Indicated and Inferred Mineral Resources. A
significant increase in tonnage of low-grade ore has been
identified in this area, increasing Indicated Mineral Resources
by 79Mt to 134Mt grading 2.16% ilmenite
• A reduction in cut-off grade has also contributed to the
reduced Indicated Mineral Resource grades. Increased
confidence in the geology with additional Mineral Resource and
geotechnical drilling has identified low slimes, high dune mining
potential. The ongoing PFS for Congolone provides a basis
for a reasonable prospect for eventual economic extraction,
supported by present infrastructural, social and environmental
development programmes
The map shows exploration licences and mining
concessions held by the Group:
50
Kenmare Resources plc Annual Report and Accounts 2023
MINERAL RESERVES AND RESOURCES CONTINUED
l
km
0 10 20 30
Nampula
Province
NAMPULA
NAMETIL
MOGINCUAL
QUINGA
ANGOCHE
NATAKA
MOMA
LARDE
Zambézia
Province
153C
Quinga
North
270C
Congolone
and Marrua
735C
Mineral Lease
NAMALOPE
MUALADI
PILIVILI
MPUITINE
The following audited table sets out Kenmare’s Ore Reserves and Mineral Resources as at 31 December 2023:
ZONES CATEGORY
ORE
(MT)
%
THM*
%
ILMENITE
IN THM
%
ILMENITE
IN ORE
% RUTILE
IN ORE
% ZIRCON
IN ORE
THM
(MT)
ILMENITE
(MT)
RUTILE
(MT)
ZIRCON
(MT)
RESERVES
Namalope Proved 52 3.5 81.3 2.8 0.06 0.18 1.8 1.5 0.0 0.1
Namalope Probable 20 3.0 81.0 2.4 0.06 0.17 0.6 0.5 0.0 0.0
Pilivili Proved 28 3.4 80.6 2.8 0.07 0.20 1.0 0.8 0.0 0.1
Pilivili Probable 89 3.5 80.5 2.8 0.07 0.20 3.1 2.5 0.1 0.2
Nataka Probable 1,240 3.1 83.7 2.6 0.05 0.16 39.0 32.6 0.7 2.0
TOTAL
RESERVES
Proved and
Probable 1,429 3.2 83.3 2.6 0.06 0.17 45.4 37.8 0.8 2.4
RESOURCES CATEGORY
SAND
(MT)
%
THM*
%
ILMENITE
IN THM
%
ILMENITE
IN SAND
% RUTILE
IN SAND
% ZIRCON
IN SAND
THM
(MT)
ILMENITE
(MT)
RUTILE
(MT)
ZIRCON
(MT)
Congolone Measured 216 3.2 81.0 2.6 0.07 0.21 6.8 5.5 0.1 0.4
Namalope Measured 122 3.4 81.2 2.8 0.06 0.19 4.2 3.4 0.1 0.2
Pilivili Measured 24 2.8 79.5 2.2 0.06 0.17 0.7 0.5 0.0 0.0
Namalope Indicated 71 2.8 80.9 2.3 0.05 0.16 2.0 1.6 0.0 0.1
Congolone Indicated 134 2.7 79.4 2.2 0.06 0.16 3.6 2.9 0.1 0.2
Nataka Indicated 2,101 2.8 82.1 2.3 0.05 0.15 59.4 48.7 1.0 3.2
Pilivili Indicated 89 2.9 80.2 2.3 0.06 0.17 2.5 2.0 0.1 0.1
Mualadi Indicated 483 2.4 81.7 2.0 0.04 0.13 11.7 9.5 0.2 0.7
Congolone Inferred 2 1.9 77.5 1.4 0.04 0.10 0.0 0.0 0.0 0.0
Pilivili Inferred 32 2.4 80.3 1.9 0.05 0.14 0.8 0.6 0.0 0.0
Mualadi Inferred 573 2.2 81.8 1.8 0.04 0.12 12.6 10.3 0.2 0.7
Nataka Inferred 3,043 2.5 82.4 2.1 0.04 0.13 77.3 63.7 1.3 4.1
Mpitini Inferred 477 2.7 89.5 2.4 0.04 0.12 12.8 11.4 0.2 0.6
Marrua Inferred 100 2.9 0.0 0.0 0.00 0.00 2.9 0.0 0.0 0.0
Quinga North Inferred 71 3.5 80.0 2.8 0.14 0.28 2.5 2.0 0.1 0.2
TOTAL
RESOURCES 7,538 2.7 81.2 2.2 0.05 0.14 199.8 162.3 3.5 10.7
*THM is total heavy minerals of which ilmenite (typically 82%), rutile (typically 2.5%) and zircon (typically 5.5%) total approximately 90%. Tonnes and grades have been rounded
and hence small differences may appear in totals. Mt represents million tonnes.
Mineral Resources are additional to Ore Reserves. Estimates for the Namalope, Nataka and Pilivili Ore Reserves and Namalope, Nataka, Congolone, Pilivili, Mualadi, Mpuitine
and Marrua Mineral Resources comply with the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (JORC Code) 2012 edition. Table 1
documentation for these Ore Reserves and Mineral Resources can be found at www.kenmareresources.com. Estimates for the Quinga North Mineral Resource were prepared and
first disclosed under the 2004 edition of the JORC Code. These have not been updated to comply with the JORC Code 2012 edition on the basis that the information has not
materially changed since it was last reported.
The competent person for the Namalope, Nataka and Pilivili Ore Reserves and Mineral Resources and the Congolone, Mualadi, Mpuitine and Marrua Mineral Resources is
Sonsiama Kargbo (MAusIMM and MAIG). Sonsiama is an employee of Kenmare and takes part in the Kenmare Resources Restricted Share Plan. Sonsiama has sufficient
experience relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined
in the JORC Code 2012 edition. Sonsiama gives consent to the inclusion in this report of the matters based on their information in the form and context in which it appears.
Read more
about
Kenmare’s
business
model
on pages 24
to 25
In 2023 drilling activities were also undertaken in
the Marrua ore zone, with 18 out of 55 historic holes
re-drilled. It remains classified as Inferred Mineral
Resource with an upgraded model from new geological
interpretations. Applying the revised cut-off grade
protocol, it comprises 100Mt of ore at 2.9% THM. No
mineral assemblage assays are yet available.
The Mpuitine Mineral Resource was remodelled in
2023 using drilling data from 2018 on a 1,000x400m
grid. Applying the revised cut-off grade protocol, it
now comprises 477Mt of ore grading 2.7% THM, which
represents 11.4Mt (grading 2.4%) of contained ilmenite,
0.6Mt zircon (grading 0.12%), and 0.2Mt rutile (grading
0.04%). Product quality data has yet to be developed on
a comprehensive scale.
During 2023 across all areas of the Moma deposit, 399m
of drilling to install water monitoring piezometers was
completed and 9,806m of CPTu drilling was completed
to build geotechnical data to support orebody hardness
assessments. No reverse circulation drilling was
undertaken in the Nataka, Mualadi, Mpuitine and Quinga
North ore zones during 2023.
51
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Overview
Following 2022’s record financial performance, Kenmare
experienced both operational challenges and a weaker
product market in 2023. Despite this, the Group
delivered a robust financial performance, with EBITDA
of $220.3 million (2022: $298.0 million) and profit after
tax of $131.0 million (2022: $206.0 million). The business
continued to generate strong cash flow, supporting
significant shareholder distributions of $86.6 million, $31
million of debt repayments and almost $70 million of
capital investment, while retaining a net cash balance.
Looking ahead, the Group is focused on the capital
programme required for the transition of Wet
Concentrator Plant (WCP) A to the Nataka ore zone in
late 2025, an investment that will secure production
from Moma for decades to come. This project is
expected to be funded through existing cash resources
and debt, with new debt facilities agreed in March 2024.
Revenue
Revenue was $458.5 million in 2023, a 13% decrease
compared to 2022 ($525.9 million). This was driven
by a 10% reduction in the average price received for
Kenmare’s products and lower shipping volumes, which
were 3% down on the prior year. In particular, some
shipments planned for late 2023 were deferred to
January 2024 due to poor weather conditions around
year end.
Total shipments during the year amounted to 1,045,200
tonnes (2022: 1,075,600 tonnes) and comprised 939,000
tonnes of ilmenite (2022: 953,400 tonnes), 51,300
tonnes of primary zircon (2022: 60,500 tonnes), 7,900
tonnes of rutile (2022: 12,900 tonnes), and 47,000
tonnes of concentrates (2022: 48,800 tonnes).
Ilmenite revenue amounted to $315.1 million in 2023 and
decreased by 9% on the prior year (2022: $347.4 million)
as a result of a 2% decrease in shipment volumes and
an 8% price decrease to $336 per tonne (2022: $364 per
tonne). Primary zircon revenue decreased by 20% to
$79.6 million (2022: $99.2 million) due to a 15% decrease
in shipment volumes and a 5% price decrease. Freight
revenue in 2023 decreased to $21.4 million (2022: $27.6
million), reflecting lower volumes shipped and reduced
average freight rates during the year, in line with global
shipping trends.
“THE BUSINESS
CONTINUED TO GENERATE
STRONG CASH FLOW,
SUPPORTING SIGNIFICANT
SHAREHOLDER
DISTRIBUTIONS, DEBT
REPAYMENTS AND
CAPITAL INVESTMENT,
WHILE RETAINING A NET
CASH BALANCE.”
Tom Hickey
FINANCIAL DIRECTOR
$220.3m
EBITDA
50%
EBITDA margin
52
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL REVIEW
Read more
about
Kenmare’s
operations on
page 40
2023 results
The key financial metrics were as follows:
PRODUCTION 2023 2022
FY CHANGE
%
Mineral Product Revenue ($ million) 437.1 498.3 -12%
Freight Revenue ($ million) 21.4 27.6 -22%
Total Revenue ($ million) 458.5 525.9 -13%
Finished products shipped (tonnes) 1,045,200 1,075,600 -3%
Average price per tonne ($/t) 418 463 -10%
Average ilmenite price per tonne ($/t) 336 364 -8%
Average zircon price per tonne ($/t) 1,552 1,638 -5%
Total operating costs
1,2
($ million) 303.3 292.6 4%
Total cash operating cost
1
($ million) 228.1 218.7 4%
Cash operating cost per tonne of finished product
1
($/t) 209 182 15%
EBITDA
1
($ million) 220.3 298.0 -26%
Profit after tax ($ million) 131.0 206.0 -36%
Net cash/(debt)
1
($ million) 20.7 25.7 -19%
Full year dividend per share (USc) 56.0 54.3 3%
Notes to table:
1
Additional information in relation to these Alternative Performance Measures (APMs) is disclosed in the glossary.
2
Depreciation is included in total operating costs.
Operating costs
2023
$M
2022
$M
FY CHANGE
%
Cost of sales 294.9 282.7 4%
Administrative expenses 8.4 9.9 (15%)
Total operating costs 303.3 292.6 4%
Freight charges (21.4) (27.6) (22%)
Total operating costs less freight charges 281.9 265.0 6%
Non-cash costs
Depreciation (65.2) (64.6) 1%
Expected credit losses - (1.1) (100%)
Share-based payments (3.3) (2.2) 50%
Mineral products inventory movements 14.7 21.6 (32%)
Total cash operating costs 228.1 218.7 4%
Finished product production (tonnes) 1,091,500 1,200,800 (9%)
Cash operating cost per tonne of finished product ($/t) 209 182 15%
The Group remained focused on cost control and
operational efficiency initiatives throughout the year
to moderate the impact of inflation and rising energy
prices. Despite this, total cash operating costs rose
by 4% to $228.1 million (2022: $218.7 million). This
was principally driven by increased heavy mobile
equipment (HME) rental and fuel costs associated with
the mine paths for WCP A and WCP B, which included
valley traverses and mining wetlands, as well as costs
associated with the lightning strike in February 2023.
Materially higher diesel prices also impacted the cost
of running the Group’s own fleet of HMEs and some
equipment within the Mineral Separation Plant (MSP).
As a result of these factors and lower production
volumes, cash operating costs per tonne of finished
product increased by 15% to $209 per tonne in 2023
(2022: $182 per tonne).
Finance income and costs
The Group recognised finance income of $5.9 million in
2023 (2022: $1.1 million), consisting of interest on bank
deposits. Finance costs were $11.1 million (2022: $12.5
million), including loan interest of $7.9 million (2022:
$8.8 million), letter of credit arrangement and factoring
fees of $1.5 million (2022: $2.2 million), lease interest
of $0.1 million (2022: $0.1 million), commitment fees of
$0.9 million (2022: $0.5 million), and unwinding of the
discount on the mine closure provision of $0.7 million
(2022: $0.7 million).
53
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Tax
The tax charge for the year amounted to $18.9 million
(2022: $16.1 million). The majority of this tax charge is
payable by the Group’s mining subsidiary, Kenmare Moma
Mining (Mauritius) Limited (KMML), in Mozambique.
KMML Mozambique Branch had taxable profits of $34.1
million (2022: $39.0 million), resulting in an income tax
expense of $11.8 million being recognised (2022: $14.4
million). The income tax rate applicable to taxable profits
of KMML Mozambique Branch is 35% (2022: 35%).
The Company, Kenmare Resources plc, had taxable
profits of $89.2 million (2022: $13.3 million), resulting
in an income tax expense of $7.2 million (2022: $1.6
million). The higher taxable profits in the Company were
largely due to $70.0 million of dividends received from
KMML, which were subject to Irish corporation tax at an
effective tax rate of 9.9% (2022: nil%). No intercompany
dividend was received by the Company in 2022.
In late 2023 the Irish Department of Finance initiated
a consultation process on the introduction of a
participation exemption in Irish corporation tax for
foreign sourced dividends. The objective of this
process is, inter alia, to determine if Ireland should
transition to a territorial system of taxation for foreign
sourced dividends and branch income, resulting in no
additional charge to tax being incurred upon receipt in
Ireland, as is currently the case in all other EU Member
states. Kenmare participated in the consultation
process. As a Group with foreign subsidiaries and
branch undertakings, Kenmare would welcome the
simplification of the current ‘tax and credit’ system and
the reduced risk and increased certainty that this would
provide. The outcome of this consultation process is
expected during 2024 and changes, if implemented,
may become effective in 2025. If adopted, such changes
would be expected to reduce the Company’s Irish
income tax expense.
Earnings per share
Basic earnings per share (EPS) in 2023 amounted to $1.41
per share (2022: $2.17 per share). On a diluted basis, EPS
amounted to $1.37 per share (2022: $2.12 per share). The
EPS figures are calculated on the basis of the weighted
average number of shares in issue during the year, which
was 93,126,115 (2022: 94,919,944), reflecting the impact of
the share buy-back undertaken in September 2023.
Dividends
Profit after tax was $131.0 million in 2023 (2022: $206.0
million), a 36% decrease, primarily due to lower revenues
and a modest increase in operating costs. The Board
is recommending a final dividend of USc38.54 per
share, which is subject to shareholder approval at
the Annual General Meeting (AGM). This would give
a full year dividend of USc56.04 per share for 2023,
which represents a 3% increase on 2022. The financial
statements do not reflect this final dividend.
Cash flows
Kenmare’s business is highly cash generative and
delivered $151.6 million from operations in 2023 (2022:
$209.4 million). While this 28% decrease was driven by
lower earnings and increases in working capital during
the year, the Group’s balance sheet remains strong,
with multiple sources of liquidity to support operations,
capital investments and shareholder returns.
Working capital movements absorbed $44.3 million in
2023 (2022: $73.3 million), of which $29.5 million related
to increased year-end receivables arising from strong
Q4 shipments, with the balance principally reflecting
increased year-end inventories of intermediate and
finished mineral products. The Group made interest
payments of $7.3 million (2022: $7.1 million), tax payments
of $21.1 million (2022: $10.5 million) and paid fees for a
letter of credit arrangement of $1.5 million (2022: $2.2
million) during the year. Investing activities of $66.5 million
(2022: $59.9 million) represented additions to property,
plant, and equipment as discussed further below.
Shareholder returns in 2023 totalled $86.6 million
(2022: $35.2 million). They were comprised of the final
2022 dividend of USc43.33 per share (2021: USc25.42)
totalling $41.1 million and the H1 2023 interim dividend
of USc17.5per share (2022: USc10.98) totalling $15.6
million. In 2023, the Group completed a share buy-back
for $30.0 million (2022: $0.5 million odd-lot offer).
The Company’s Employee Benefit Trust purchased $6.2
million (2022: $1.8 million) of shares during the year for
satisfaction of the exercise of the Kenmare Resources
Share Plan (KRSP) awards. Lease repayments of $0.3
million (2022: $1.0 million) were made during the year,
relating to the rental of the Group’s Dublin and Maputo
offices.
Consequently, Kenmare finished the year with net cash
broadly flat at $20.7 million (2022: $25.7 million), despite
having funded all operating costs, capital investments and
working capital movements and returned over $86 million
to shareholders through dividends and the share buy-back.
Balance sheet
In 2023 there were additions to property, plant, and
equipment of $69.7 million (2022: $59.9 million).
Additions consisted of $18.2 million (2022: $6.8 million)
on Pre-Feasibility Studies for the transition of WCP A
to the Nataka ore zone and the WCP B upgrade, $22.8
million (2022: $nil million) on initial payments relating
to the WCP A upgrade and early works required for
mining in Nataka, and $28.7 million (2022: $53.1 million)
for various other capital additions. All 2023 capital
expenditure was funded from operating cashflows.
The mine closure provision increased by $0.2 million in
2023 (2022: $20.1 million decrease) and now stands at
$17.5 million (2022: $16.6 million). This movement was due
to a small increase in the closure cost estimates. Capital
disposals amounted to $9.8 million (2022: $18.0 million),
principally relating to HME and mine infrastructure.
Read more
about
economic
value
distributed in
Mozambique
on page 72
54
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL REVIEW CONTINUED
Read more
about the
market for
Kenmare’s
products on
page 30
The Group conducted an impairment review of
property, plant, and equipment at year-end and the
key assumptions of this review are set out in Note 11
of the financial statements. No impairment provision is
required as a result of this review.
Working capital was $214.4 million at year-end (2022:
$172.9 million). The Group held higher working capital
balances than usual at year-end as a result of higher
inventories and increased shipments in Q4, which impacted
receivables, none of which were discounted at year-end.
Inventory at year-end amounted to $99.3 million (2022:
$84.2 million), consisting of intermediate and finished
mineral products of $58.4 million (2022: $43.7 million)
and consumables and spares of $40.9 million (2022:
$40.5 million). Closing stock of finished products at the
end of 2023 was 259,100 tonnes (2022: 213,500 tonnes).
Closing stock of Heavy Mineral Concentrate (HMC)
at the end of 2023 was 16,700 tonnes, compared with
18,800 tonnes at the start of the year. The increase in
finished products inventory at year-end was largely due
to the reduction in shipments in 2023 and the deferral
of some shipments to January 2024, as a result of poor
weather in December 2023.
Trade and other receivables amounted to $153.6 million
(2022: $124.0 million), of which $127.4 million (2022:
$105.0 million) was trade receivables from the sale of
mineral products and $26.2 million (2022: $19.0 million)
was comprised of prepayments and other miscellaneous
debtors. The increase in trade receivables at year-end
was mainly attributable to increased sales in Q4 2023;
all receivables are current and no customer balances
are considered credit impaired at 31 December 2023. In
addition, while an expected credit loss of $0.04 million
(2022: $1.1 million) was recognised during the year, the
Group has never suffered a bad debt.
Cash and cash equivalents decreased by $37.2 million
(2022: increase of $39.2 million) during the year and
at 31 December 2023 amounted to $71.0 million (2022:
$108.3 million). Despite the decrease in cash and cash
equivalents, the Group finished the year with net cash of
$20.7 million (2022: 25.7 million).
Trade and other payables amounted to $38.6 million
(2022: $35.3 million). Tax liabilities amounted to $6.9
million (2022: $8.9 million), reflecting the increased tax
expense incurred during the year.
Principal debt repayments against the term loan
amounted to $31.4 million during the year. At year-end,
total debt of $47.9 million (2022: $78.6 million) was
recognised by the Group.
Capital investments
The majority of Kenmare’s capital investment during
2023 was incurred on preparations for the transition of
WCP A to Nataka , which advanced from Pre-Feasibility
Study (PFS) to Definitive Feasibility Study (DFS)
stage. The Group also delivered a PFS on a potential
upgrade of WCP B’s capacity by over 40%. As part of the
Nataka process, each element of the DFS is objectively
calibrated against an industry database of projects of
similar complexity and location to ensure costs and
schedule estimates reflect all likely scenarios. Specific
component costs are also validated against supplier
costs estimates. In recent months a number of critical
elements of the project have moved into execution
phase, including the placement of orders for two new
higher capacity dredges.
USc56.04
Dividend per share
55
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Read more
about
Kenmare’s
strategic
pillars on page
26
Read more
about
Kenmare’s
operations on
page 40
Read more
about the
capital
projects on
page 47
The Nataka project has been impacted by scope
changes and capital cost increases between the PFS
and DFS, with total costs now estimated at $326-341
million to the end of 2027. Kenmare has been actively
planning for this funding requirement under a variety of
scenarios and is confident that the necessary facilities
and resources are in place to manage and monitor the
financial obligations associated with the Nataka move,
as well as the Group’s other activities and investments.
As part of this process a final investment decision on
the WCP B upgrade has been deferred, although the
DFS process is continuing.
Debt refinancing
On 4 March 2024, the Group entered into a new $200
million Revolving Credit Facility with its existing
lenders Absa Bank, Nedbank, Rand Merchant Bank
and Standard Bank. This funding supports Kenmare’s
planned capital programme in the coming years and
removes the amortising payments of the existing term
loan, whilst increasing the size of available facilities and
extending the maturity profile from 2025 to 2029. The
new facilities continue the Group’s strong relationship
with existing lenders and provide enhanced financial
flexibility through the revolving credit structure and
committed five-year term.
Accounting policies
The financial statements have been prepared in
accordance with International Financial Reporting
Standards (IFRS) adopted by the European Union;
therefore, the Group financial statements comply with
Article 4 of the IAS Regulation. The parent company
financial statements have been prepared in accordance
with Financial Reporting Standard 101 Reduced
Disclosure Framework (FRS 101). The Group and
parent financial statements have also been prepared in
compliance with the Irish Companies Act 2014.
The Group’s material accounting policies and details
of the significant accounting judgements and critical
accounting estimates are disclosed in Note 1 to the
Group’s financial statements.
Financial outlook
Looking ahead, while macroeconomic uncertainty is
impacting demand, as is a slower Chinese economy,
Kenmare has strong relationships with its customers
and the long-term fundamentals of Kenmare’s products
remain strong.
To support operational and financial delivery in
2024, Kenmare has prepared a mine plan focused on
delivery of a consistent flow of material to the MSP to
support contracted and anticipated customer demand
throughout the year. In addition, during 2023 Kenmare
funded the refurbishment of the Nampula statcom in
the Electricidade de Moçambique network. This was
commissioned in Q4 2023 and is expected to provide
increased stability in the regional power grid. Longer
term, the Nataka ore zone represents the majority of
Moma’s Mineral Resources and transitioning to this area
is key to securing future production. Kenmare is focused
on active cost control of the project and optimising the
scope, design and execution as far as possible. Funding
has been put in place with the support of Kenmare’s
existing lender group to meet the capital requirement
over the full period of investment, whilst maintaining
strong cash balances and overall financial flexibility.
Over $250 million has been returned to shareholders
since 2019 via a combination of dividends and share
buy-backs, including the 2023 final dividend, and
the Group recognises the importance of consistently
delivering shareholder returns during the current period
of increased investment. Kenmare is confident that
through the combination of existing cash resources, its
newly-arranged debt facilities, and organic cashflows,
it is well-placed to continue to execute its strategy
successfully over the coming years.
Tom Hickey
FINANCIAL DIRECTOR
56
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL REVIEW CONTINUED
WCP A is due to complete its mine path in Namalope
in late 2025 and then it will transition to the Nataka ore
zone. The estimated capital cost of this project is $326-
341 million to the end of 2027. Nataka is the largest ore
zone in Moma’s portfolio and transitioning to this area is
key to securing production for decades to come.
STRATEGIC REPORT
57
Kenmare Resources plc Annual Report and Accounts 2023
KENMARE’S APPROACH TO SUSTAINABILITY AIMS
TO BALANCE THE NEEDS OF ITS HOST COMMUNITIES,
ENVIRONMENTAL CONSERVATION, AND ECONOMIC
RETURNS.
Kenmare measures progress against this strategy via its Environmental, Social and Governance (ESG)
Scorecard, which forms part of both staff and Executive incentive schemes. Kenmare’s performance against
its 2023 ESG Key Performance Indicators (KPIs) is summarised below. The ESG KPIs which form part of the
Director’s annual bonus award and which you can read about on pages 132 and 133, scored 15% out of the
maximum of 25%. Kenmare’s 2024 and 2025 targets are set out together with its sustainability strategy on
pages 60 and 61.
2023 target 2023 performance
Target
status
Safe and
engaged
workforce
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
Workforce safety
20% Lost Time Injury Frequency
Rate (LTIFR) reduction relative to
three-year average
10% All Injury Frequency Rate
(AIFR) reduction against three-
year average
25% increase in LTIFR to 0.15 against
three-year average
17% decrease to 1.24 against three-year
average
Malaria prevention
Complete Knowledge Attitude and
Practice (KAP) Survey and define
new Malaria Action Plan
KAP Survey commenced in September
2023 and will be completed Q2 2024.
Recommendations will be implemented from
Q3 2024
Gender diversity
15.5% female representation at the
Moma Mine (2022: 14.5%)
16% female representation at the
Moma Mine
Thriving
communities
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
Local procurement
3% increase in local procurement
(operating expenditure excluding
electricity and diesel)
Additional four contracts signed
with local suppliers
3.2% increase in local procurement
Six contracts with local suppliers signed
KMAD
Delivery of second year of KMAD
three-year plan
74% of targets from KMAD’s three-year plan
delivered
Socio-economic
Businesses on track to repay loans
within loan period
Pupil literacy and numeracy rates
Water quality in community
villages
Loan repayments at 27%, behind
target of 40%
Educational improvement project
suspended, due to restart in February
Water treatment trials successfully
completed at three villages
KEY
Achieved / Good progress Limited progress In progress
58
Kenmare Resources plc Annual Report and Accounts 2023
2023 ESG SCORECARD PERFORMANCE
2023 target 2023 performance
Target
status
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
A healthy
natural
environment
Climate / decarbonisation
On track to deliver 12% emissions
reduction by 2024, by achieving
9% in 2023 with plan for additional
3% in 2024
14% annual reduction in Scope 1 emissions
achieved. Diesel consumption is forecast
to increase in 2024, however, mitigation
programmes were initiated in 2023 to
ensure the 12% emissions reduction,
relative to the 2021 baseline is delivered
Land management
Expand agro-forestry
Establish Pilivili forest
12.5 ha of agroforestry established
20 ha of indigenous trees planted
Rehabilitation
175 ha of post-mined land
rehabilitated
187 ha of post-mined land rehabilitated
Biodiversity management
Icuria forest designated as
conservation area
Apply for Pilivili dunal area to have
conservation status
Memorandum of Understanding
signed with Primeiras and Segundas
Archipelagos Protected Area Management
Committee (APAIPS) to work towards
official designation
Water stewardship
Maintain 90% water re-use
90% water re-use maintained
Tailings management
Set up project plan for Global
Industry Standard for Tailings
Management (GISTM) by end 2024
On track for alignment with GISTM by year-
end 2024
Trusted
business
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
Supply chain due diligence
80% compliance of target suppliers
with Kenmare’s Supplier Code of
Conduct
84% compliance achieved
59
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Mission
To sustain a safe, healthy and engaged
workforce.
Mission
To increase the prosperity of
Kenmare’s host communities.
Mission
To create and sustain a positive
environmental legacy.
Mission
To drive improved ethics and
transparency in the business
and supply chain.
Overview
Protecting the safety of Kenmare’s
employees, suppliers and contractors
is of the utmost importance to the
Company. Kenmare takes a proactive
approach to managing safety,
identifying and mitigating major risks,
and sharing lessons to continuously
improve performance. The Company’s
ability to attract, retain and motivate
a diverse, high calibre, and localised
workforce is at the heart of its success
and sustainability as a business.
Overview
Kenmare is privileged to be able to use
the Moma Mine’s presence to support
the economic and social prosperity
of local communities. The Company
seeks to operate in a safe, inclusive,
and transparent way and engage
openly with communities directly or
indirectly affected by Kenmare’s mining
operations. The Company is committed
to listening to communities’ concerns
and priorities, and constructively
resolving any differences in a
transparent manner.
Overview
Kenmare focuses on reducing
Greenhouse Gas emissions from its
operations, ensuring the business is
resilient to climate-related risks, and can
capitalise on opportunities related to the
transition to a low-carbon economy.
Minimising or mitigating the impacts
of the Company’s mining operations
on the environment and biodiversity
includes a progressive rehabilitation
programme, water stewardship, and
minimising waste to landfill.
Overview
Kenmare aims to be a trusted business
and supports transparent disclosure, so
the Company can be accountable for its
actions and commitments. Employees
recognise their personal and collective
responsibility in upholding Kenmare’s
business integrity. The Company’s
high standards are set out in corporate
policies and the laws and regulations
of Ireland, the UK, and Mozambique.
Kenmare works with suppliers to ensure
high sustainability standards are upheld.
Material issues
Health and safety
Security
Diversity and inclusion
Labour practices
Material issues
Socio-economic development
Land use
Community relationships
Material issues
Climate
Energy use
Water stewardship
Rehabilitation
Biodiversity
Tailings storage
Waste
Radiation
Material issues
Business transparency
Anti-bribery and corruption (ABC)
Supply chain
Compliance and audit
2024 targets
Reduce Lost Time Injury Frequency
Rate (LTIFR)
Reduce malaria cases per
hours worked
Complete malaria vector
control study
Increase percentage of women in
Moma workforce to 17.5%
2024 targets
Deliver 3% increase in local
procurement
Establish framework for micro-
businesses to provide services to
Kenmare and establish one new
business
2024 targets
Deliver 12% emissions reduction
(against 2021 boundary baseline)
by 2024
Prepare climate Corporate
Sustainability Reporting Directive
(CSRD) disclosures for Board
approval
2024 targets
>80% of international suppliers
complying with Supplier Code of
Conduct (CoC) from 2024 onwards
>60% of Mozambican companies
complying with Supplier CoC from
2024 onwards
2025 targets
Measurably reduce malaria
Increase percentage of women in
Moma workforce to 20%
Maintain engaged workforce, as
measured by survey and <3%
voluntary staff turnover
Ensure 95% of employees have
a development plan and know
what they need to do to ready
themselves for their next role with
the Company
2025 targets
Increase procurement with
Mozambican suppliers
Deliver meaningful improvement in:
• Micro-loan repayments
• Pupil literacy and numeracy
• Water quality at community
boreholes
Deliver progress against relevant
Sustainable Development Goals
2025 targets
Deliver progress against climate
targets
Support designation and protection
of Icuria forest as a sustainable
community forest
Ensure balanced post-mining land
use programme providing food
security and biodiversity
Complete implementation of water
re-use infrastructure. Ensure water
accounting is in alignment with
International Council on Mining and
Metals guidelines
Ensure no reportable tailings releases
2025 targets
Undertake external risk assessment
of ABC risks in business and
supply chain
Ensure on-site suppliers achieve
an average of 85% compliance with
Kenmare’s Supplier CoC
Gain external assurance of public
security forces upholding the
Voluntary Principles on Security
and Human Rights
KENMARE AIMS TO ACHIEVE A BALANCE
BETWEEN THE NEEDS OF MOMA’S
HOST COMMUNITIES, CONSERVING
THE ENVIRONMENT, AND GENERATING
ECONOMIC RETURNS. KENMARE WORKS TO
DELIVER VALUE TO ALL STAKEHOLDERS
BY STRIVING TOWARDS THE MISSIONS
OUTLINED IN EACH OF ITS FOUR STRATEGIC
SUSTAINABILITY PILLARS.
Kenmare’s sustainability strategy builds on the Company’s track record of
sustainable development during its 17-year production history. The Company’s
medium-term targets for 2025, set in 2021, are now near-term targets. Therefore,
these will be updated in 2024 with medium-term targets for 2030. Kenmare’s
sustainability strategy considers the major macro and national sustainability
themes that are likely to both influence Kenmare’s operations and provide either
risks or opportunities that the business needs to consider, including:
The global focus and urgent need to tackle climate change and reverse the
loss of biodiversity
A young, aspiring and growing Mozambican population, and the resulting
impact on existing socio-economic issues
The increasing focus on due diligence of sustainability impacts in the supply
chain and wider value chain.
Safe and
engaged
workforce
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
“Kenmare regularly engages with its
stakeholders at all levels of the business.
Kenmare’s Board met with a women’s
community group during a site visit in
December.”
REGINA MACUACUA, DEPUTY COUNTRY MANAGER
60
Kenmare Resources plc Annual Report and Accounts 2023
SUSTAINABILITY STRATEGY
Mission
To sustain a safe, healthy and engaged
workforce.
Mission
To increase the prosperity of
Kenmare’s host communities.
Mission
To create and sustain a positive
environmental legacy.
Mission
To drive improved ethics and
transparency in the business
and supply chain.
Overview
Protecting the safety of Kenmare’s
employees, suppliers and contractors
is of the utmost importance to the
Company. Kenmare takes a proactive
approach to managing safety,
identifying and mitigating major risks,
and sharing lessons to continuously
improve performance. The Company’s
ability to attract, retain and motivate
a diverse, high calibre, and localised
workforce is at the heart of its success
and sustainability as a business.
Overview
Kenmare is privileged to be able to use
the Moma Mine’s presence to support
the economic and social prosperity
of local communities. The Company
seeks to operate in a safe, inclusive,
and transparent way and engage
openly with communities directly or
indirectly affected by Kenmare’s mining
operations. The Company is committed
to listening to communities’ concerns
and priorities, and constructively
resolving any differences in a
transparent manner.
Overview
Kenmare focuses on reducing
Greenhouse Gas emissions from its
operations, ensuring the business is
resilient to climate-related risks, and can
capitalise on opportunities related to the
transition to a low-carbon economy.
Minimising or mitigating the impacts
of the Company’s mining operations
on the environment and biodiversity
includes a progressive rehabilitation
programme, water stewardship, and
minimising waste to landfill.
Overview
Kenmare aims to be a trusted business
and supports transparent disclosure, so
the Company can be accountable for its
actions and commitments. Employees
recognise their personal and collective
responsibility in upholding Kenmare’s
business integrity. The Company’s
high standards are set out in corporate
policies and the laws and regulations
of Ireland, the UK, and Mozambique.
Kenmare works with suppliers to ensure
high sustainability standards are upheld.
Material issues
Health and safety
Security
Diversity and inclusion
Labour practices
Material issues
Socio-economic development
Land use
Community relationships
Material issues
Climate
Energy use
Water stewardship
Rehabilitation
Biodiversity
Tailings storage
Waste
Radiation
Material issues
Business transparency
Anti-bribery and corruption (ABC)
Supply chain
Compliance and audit
2024 targets
Reduce Lost Time Injury Frequency
Rate (LTIFR)
Reduce malaria cases per
hours worked
Complete malaria vector
control study
Increase percentage of women in
Moma workforce to 17.5%
2024 targets
Deliver 3% increase in local
procurement
Establish framework for micro-
businesses to provide services to
Kenmare and establish one new
business
2024 targets
Deliver 12% emissions reduction
(against 2021 boundary baseline)
by 2024
Prepare climate Corporate
Sustainability Reporting Directive
(CSRD) disclosures for Board
approval
2024 targets
>80% of international suppliers
complying with Supplier Code of
Conduct (CoC) from 2024 onwards
>60% of Mozambican companies
complying with Supplier CoC from
2024 onwards
2025 targets
Measurably reduce malaria
Increase percentage of women in
Moma workforce to 20%
Maintain engaged workforce, as
measured by survey and <3%
voluntary staff turnover
Ensure 95% of employees have
a development plan and know
what they need to do to ready
themselves for their next role with
the Company
2025 targets
Increase procurement with
Mozambican suppliers
Deliver meaningful improvement in:
• Micro-loan repayments
• Pupil literacy and numeracy
• Water quality at community
boreholes
Deliver progress against relevant
Sustainable Development Goals
2025 targets
Deliver progress against climate
targets
Support designation and protection
of Icuria forest as a sustainable
community forest
Ensure balanced post-mining land
use programme providing food
security and biodiversity
Complete implementation of water
re-use infrastructure. Ensure water
accounting is in alignment with
International Council on Mining and
Metals guidelines
Ensure no reportable tailings releases
2025 targets
Undertake external risk assessment
of ABC risks in business and
supply chain
Ensure on-site suppliers achieve
an average of 85% compliance with
Kenmare’s Supplier CoC
Gain external assurance of public
security forces upholding the
Voluntary Principles on Security
and Human Rights
Thriving
communities
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
A healthy
natural
environment
Trusted
business
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
61
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Sustainable Development Goals
THE SAFETY OF ITS WORKFORCE IS THE PRIMARY CONCERN THAT
DRIVES KENMARE’S DAY-TO-DAY DECISION MAKING AND WORK.
2023 achievements
17% reduction in All Injury Frequency Rate relative to the three-
year rolling average
51% decrease in malaria cases compared to 2022
Mozambican operations certified to NOSA standard, aligned to
ISO 45001 International Standard
Five star NOSA rating achieved for eighth consecutive year
Audits reported no major safety concerns
100% of senior management completed the Full Role Delivery
programme
Localisation rate (percentage of Mozambican employees) at
97% exceeds regulatory compliance
Female representation in Mine employees reached 16%
(2022: 14.5%)
The impact of the Security strategy was reflected in a 21%
reduction in criminal activity relative to 2022
Health and safety
Kenmare’s leadership aims to ensure each employee and
contractor returns home safely at the end of each shift and the
Company’s top priority is to strive for a “zero harm” working
environment. Kenmare’s LTIFR increased to 0.15 following two
years of industry-leading performance. This was a 25% increase
relative to the Company’s three-year rolling average. While none
of the Lost Time Injuries (LTIs) sustained were serious or life
threatening, they pointed to insufficient focus being placed on risk
management by leaders. To address this, the site management
team recommitted themselves to showing authentic and
courageous leadership of health and safety, with a strict focus
on planning and increasing the time dedicated to on-site training
and coaching. The efforts of leaders, employees and contractors
meant valuable lessons were learned, and the year ended with a
successful reversal in the LTIFR trend, and with two million hours
worked without an LTI.
Malaria
In Mozambique, malaria accounts for 29% of all deaths and 42%
of deaths in children under five years of age. The Moma Mine is
situated in a malaria endemic region and it is one of the biggest
health risks Kenmare has to manage. In 2023, the Company
achieved a 51% reduction in cases of malaria compared to 2022.
This significant improvement is the result of comprehensive
prevention and control measures, including on-going educational
Material topics
Health and safety
Security
Diversity and inclusion
Labour practices
Stakeholders
Employees
Suppliers
Communities
Investors
Safety performance
0
1
2
3
4
5
6
7
8
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Million hours worked
Million hours worked
AIFR and LTIFR per 200,000 hours
All Injury Frequency Rate (per 200,000 hours worked)
Lost Time Injury Frequency Rate (per 200,000 hours worked)
20202019 20222021 2023
campaigns and regular distribution of malaria prevention tools to
employees, including repellents and mosquito nets. All visitors to
the Mine are required to take prophylaxis and contractors conduct
indoor and outdoor spatial and residual spraying (fogging and
UVL) and Larval Source Management. In 2023, Kenmare continued
its partnership with Centro de Investigação em Saúde de Manhiça
(CISM), a Mozambican Government medical research institute on
its Vector Control study, the results of which are expected in 2024.
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
97%
Mozambican employees at Moma
62
Kenmare Resources plc Annual Report and Accounts 2023
SAFE AND ENGAGED WORKFORCE
To improve opportunities for women in the Mine’s host
communities to study for a qualification, KMAD built a
Technical Training College in Topuito, which provides
three-year vocational courses in mechanical and civil
construction or industrial electronics. In 2023, its fifth
year of operation, the college had a total of 224 students
enrolled, 34% of whom were young women. Kenmare has
sponsored a total of 105 female students to date and, at
the end of 2023, the first intake of 55 students graduated
from their three-year courses. Inês Domingos Manuel is
one of 23 female students studying civil engineering at the
Topuito Technical College, who received a bursary from the
Kenmare Moma Development Association (KMAD). The
bursary covers the course fees, books and equipment, and
support for living costs. After Inês graduated in December
2023, she joined Kenmare’s Technical Development
Programme as an intern and now works as a boilermaker.
She aspires to advance to a senior position within the
maintenance department.
Topuito Technical College graduate
Security
In 2023, the number of security incidents decreased by over
21% year-on-year. The potential threat of violent crime against
Kenmare’s workforce was assessed as zero. The security team
prevented 17% of potential thefts and recovered 15% of stolen
items. An on-going area of focus is to convert arrests into criminal
prosecutions and jail sentences.
Diversity and inclusion
Women employed at the Mine now represent close to 16% of
Moma’s workforce, a fourfold increase over eight years. Some
of this growth has been achieved through a larger workforce,
but much through concerted efforts and programmes focused
on hiring, developing, advancing, and retaining Kenmare’s
female talent. For example, Kenmare has a target of 90% of
Technical Development Department candidates to be women.
The Company is proud that more talented women joined the
site senior management team at Moma in 2023, bringing female
representation in that group to 40% (2022: 25%). Female
representation on the Board remained at 33% and 18% on the
Executive Committee.
Labour practices
Employees are paid a living wage and in 2023, the minimum
standard wage for an entry-level position at Kenmare continued to
be more than double that set by the Government of Mozambique.
The Company includes maximum working hours in its conditions
of employment and relevant procedures and adheres to relevant
employment laws. Kenmare respects the right of all employees
to freedom of association and the right to collective bargaining
without interference, and freedom from discrimination. Almost
half of the Company’s Mozambican workforce are members of the
trade union, SINTICIM and during 2023, Kenmare enjoyed positive
labour relations with no industrial actions or disputes.
Training and development
Investing in training and development is key to equipping
Kenmare’s people with the skills and knowledge they need. In
2023, the Company invested $1.2 million to provide 75,000 hours
of training for its employees, providing approximately 45 hours
of training per person, with an annual training cost of $735 per
employee.
40%
Women in site leadership
$1.2m
Invested in training in 2023
63
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
KENMARE WORKS TO INCREASE THE PROSPERITY AND WELL-BEING
OF THE COMMUNITIES THAT LIVE IN AND AROUND THE MOMA MINE.
Sustainable Development Goal
2023 achievements
23 female students sponsored by the Kenmare Moma
Development Association (KMAD) graduated with engineering
qualifications from the KMAD-built Topuito Technical College
Contract signed for a new district hospital - construction
expected to begin in 2024
More than 11,800 children now learn in improved school
infrastructure, due to the construction of an additional six
school blocks
Three water supply systems were built or restored in 2023,
adding to the 30 boreholes KMAD has built since 2004,
supplying clean water to approximately 45,000 people
Community relationships
Kenmare engages proactively with communities and local
authorities on the Environmental, Social and Health Impact
Assessments associated with the future mine path, and any
resulting resettlement action plans. Six local working groups,
spread across 15 project-affected communities, met bi-monthly
in 2023 to monitor and discuss issues relating to resettlement,
compensation, and grievance management. The key issues
discussed related to outdated government crop compensation
rates, which Kenmare has been working to get updated for the
past few years, and the allocation of alternative farmland for
communities impacted by the Isoa Tailings Storage Facility.
Socio-economic development
KMAD is a not-for-profit development association that was
established by Kenmare in 2004. Its purpose is to invest in
projects that go above and beyond the Company’s regulatory
commitments under the Mozambican Resettlement Action Plan
laws. KMAD has four strategic focus areas: education, health,
livelihoods and economic development, and water and sanitation.
KMAD invested $4.7 million in projects in 2023 (2022: $3 million).
By the end of 2023, KMAD had completed 74% of the goals in its
three-year strategic plan, which spans 2022-2024.
Material topics
Community relationships
Socio-economic development
Land use
Stakeholders
Communities
Government
Suppliers
Employees
Investors
Local procurement
In addition to KMAD’s efforts, Kenmare works to build the capacity
of local suppliers through training courses and sponsorship.
Kenmare increased the proportion of operating expenditure with
local suppliers by 3% in 2023 to $79 million, excluding diesel
and electricity costs (2022: $76.5 million). Six new contracts for
electrical services, healthcare services, pest control and employee
transportation were also signed with Mozambican businesses.
Livelihood and economic development
KMAD fosters the development of local businesses and transfers
skills to key local industries such as farming. In 2023, 22 micro-
businesses were established with interest-free loans (2022:
23), providing employment or an income to 385 people (2022:
341). KMAD continued to support farmers by teaching them
Conservation Agriculture (CA) methods to improve agricultural
productivity. In 2023, over 600 farmers took part in the project, of
which 154 were new beneficiaries that started that year, farming
an area close to 300 hectares.
$79m
Spent with Mozambican suppliers
64
Kenmare Resources plc Annual Report and Accounts 2023
THRIVING COMMUNITIES
Antonio Luis Comida, 49 years old and a father of six, was
born in Zambezia Province and has been a resident of
Pilivili in Moma District for more than 30 years. He has been
selling groceries in Pilivili since the late 1990s.
As part of the financing given to small businesses by
KMAD, in 2020 Antonio, together with his brother, Jose,
received a loan of $8,000 to expand his business to sell
fishing material. He matched KMAD’s funding with his own
money. He successfully grew his business, which meant
Antonio could repay the loan over 27 months and develop
into new areas, such as the sale of household electrical
goods, construction material, and move into the production
of salt. Antonio’s next plan is to buy a vehicle to help his
business expand.
As a result, Antonio has a monthly income of $12,000,
which has helped him to build a house in Nampula and pay
for the professional training for his daughter and niece, who
today are teachers.
Healthcare development
KMAD focuses on improving access to healthcare, through
projects such as building medical centres and pharmacies,
donating ambulances, developing the skills of medical staff,
and supporting community health awareness initiatives. In
2023, a third health centre was constructed in the Mine’s host
communities. Quarterly mobile clinics continued to provide
support to 113 vulnerable households. A Memorandum of
Understanding for the building of a district hospital was signed
with the Ministry of Health. Building designs were finalised, a
contractor was appointed, and construction is expected to start
in 2024.
Educational development
Education is at the heart of KMAD’s approach to sustainable
development. In 2023, KMAD funded and constructed new school
blocks in six villages and provided school materials to almost
12,000 pupils and close to 80 teachers in the Namalope and Pilivili
areas. KMAD also supported the opening of a library in Pilivili by
donating 170 books, as well as chairs and tables. On average 20
pupils are attending the library each day.
In 2023, KMAD supported 306 scholarships (2022: 250) for
secondary school and university degree courses, including 32
scholarships for children from vulnerable households. Student
pass rates at Topuito Secondary School and the Moma Secondary
School were 92% and 100% respectively (2022: 95% and 95%).
Water and sanitation
In 2023, KMAD trialled a Government-approved water purification
treatment, Certeza, in the village of Mulimuni. Treating the water
allows communities to drink the water without boiling it and
will help to reduce cases of diarrhoea and cholera. The trial was
successful with high acceptance of the water treatment from
community members. KMAD subsequently worked with the
Government to roll out the treatment to two additional villages
in 2023. KMAD will now support the roll out of Certeza to all
communities within the mining concession.
22
Micro-businesses established
3
Villages that successfully trialled
water purification treatment
KMAD micro-loan for fishing equipment
business
65
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
KENMARE IS COMMITTED TO BEING A RESPONSIBLE CUSTODIAN
OF THE LAND IT MINES AND MANAGING ITS IMPACTS ON CLIMATE
CHANGE, WATER, WASTE AND BIODIVERSITY.
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
Sustainable Development Goals
Material topics
Climate
Energy use
Waste
Biodiversity
Radiation
Tailings storage
Rehabilitation
Water stewardship
Stakeholders
Employees
Communities
Government and
regulators
Shareholders
Suppliers, contractors
and customers
2023 achievements
14% year-on-year reduction of Scope 1 carbon emissions
High water re-use rate of 90% maintained
Land rehabilitation trials conducted, adding “slimes” to post-
mined land to improve agricultural productivity
Mozambican operations certified to the National Occupational
Safety Association (NOSA) standard, aligned to ISO 14001
standard
A Biodiversity Offset Management Plan to deliver 15% Net Gain
in biodiversity is under development
Alignment with Global Industry Standards for Tailings
Management (GISTM) in progress
Climate
In 2023, Kenmare continued to work on a Climate Transition Plan
that aims to deliver the rate and pace of decarbonisation required
by scientific consensus to limit average global temperature
increase to 1.5ºC. The Company uses 100% hydroelectric grid
electrical power, which makes up 54% of its overall power
consumption, presenting a challenge for further decarbonisation.
As part of its annual risk review process and through the climate
updates to the Sustainability Committee, the climate risks facing
operations and business model were considered by management
and the Board. In line with Task Force on Climate-related Financial
Disclosure (TCFD) recommendations, Kenmare assessed the impact
of physical risks on operations under a “business-as-usual” scenario,
leading to higher warming and more extreme weather, as well as
transition risks to the business model under a rapid decarbonisation
scenario. While the time horizons of 2030 and 2050 are considered,
the Company uses a short timeframe (seven years) aligned to the
Company’s operational and financial planning timeframes.
Cyclones remain the Company’s most significant physical
risk. Extreme weather events have been a principal risk of the
Company since 2009 and Kenmare has robust mitigation controls,
including emergency preparedness plans to increase the resilience
of its people, operations, and communities in the event of extreme
weather. Risk mitigation controls are also summarised on page
80 in the Principal Risks section. Other physical risks include
storm surges, flooding, and extreme heat. The key transition risk
Kenmare faces is growing regulatory requirements and investor
expectations on climate mitigation. Decarbonising operations at a
pace aligned to what scientific consensus requires is reliant upon
the availability of commercially and economically viable solutions.
The key decarbonisation projects that Kenmare is currently
progressing is the integration of biodiesel into its operations and
the electrification of its diesel-powered driers. Both are in the
piloting or study phase but will be progressed further in 2024. The
transition to the low-carbon economy also presents opportunities
to market Kenmare’s relatively low-carbon products to climate-
conscious customers; reduce operational costs through increasing
energy efficiency; and a small but growing demand for titanium
minerals products in low carbon technologies. Nascent scientific
studies are also exploring the conversion of methane, a potent
Greenhouse Gas, into carbon dioxide, which has a much lower
global warming potential using the photocatalytic capability of
titanium dioxide. This technology is already in use as a film covering
high-rise glass buildings, due to its self-cleaning capabilities.
14%
Reduction in Scope 1 emissions
66
Kenmare Resources plc Annual Report and Accounts 2023
A HEALTHY NATURAL ENVIRONMENT
Strategic goals
Energy security
OBJECTIVE
To secure stable, reliable, consistently high
quality, cost effective, low carbon, electrical and
fuel supplies
PLANNED ACTIONS
Undertake investigations for alternative power
sources, including upgrades/additional lines
connecting to the Mozambican power grid
Set energy efficiency targets
Decarbonising operations
OBJECTIVE
To invest in technologies that increase efficiency
and reduce usage of fossil fuels
To explore low carbon, economically viable
technologies to displace diesel
To achieve sustainable cost and efficiency
improvements in energy use
To restore land-based carbon and biodiversity as
offsets, to deliver a net positive impact
PLANNED ACTIONS
Deliver 12% carbon reduction target by 2024
Maintain high level of water re-use (90%)
Undertake biofuels pilot
Undertake concept study for electrification of
dryers in Mineral Separation Plant
Capital approved to increase dredge capacity
at Wet Concentrator Plant A (WCP) A, enabling
the Company to cease dry mining, which is
diesel-powered
Adaptation
OBJECTIVE
To enhance resilience of operations to physical
climate risks
To help communities adapt to, and mitigate,
physical climate-related impacts
PLANNED ACTIONS
Upgrade infrastructure to become more cyclone
resilient
Provide cargo nets to cover critical buildings and
community infrastructure to provide protection
during severe weather events
Improve use of transshipment fleet
Increase number of cyclone-proof key
community buildings
Climate change risks and opportunities
CLIMATE
CHANGE-RELATED RISKS
TIMEFRAME SCENARIO SENSITIVITY
SHORT
(1-2 YRS)
MEDIUM
(2-5 YRS)
LONG
(5-10 YRS)
LOW
CARBON
BUSINESS
AS USUAL
Physical risks
Cyclones • ••• ••••
Storm surges • ••• ••••
Flooding • •• ••
Extreme heat • •• •••
Transition risks
Investor expectations on decarbonisation • •••• •••
Net impact of climate regulations
(carbon pricing etc)
• •••• •••
Climate change-related opportunities
Energy transition positively impacting titanium
demand
• •• •
Demand for lower carbon products • •• •
Climate and energy strategy
Kenmare will publish its first detailed Climate Transition Strategy in 2024. During 2023, Kenmare has been focused on both delivering
the short-term emissions reduction target of 12% by 2024 (relative to a 2021 baseline) and setting an ambitious but achievable target
for 2030, to pave the way to Net Zero Scope 1 and 2 emissions by 2040. This work will continue in 2024. Kenmare’s Climate and Energy
Strategy, set out below, was approved by the Board in early 2023.
KEY
High likelihood
•••••
••••
•••
••
•
Low likelihood
Anticipated onset of
risk or opportunity.
Estimated full
impact of risk or
opportunity
•
67
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
2023 performance
Kenmare’s direct emissions for 2023 were 57,141 tCO
2
e, a 14%
decrease from the prior year (2022: 66,519 tCO
2
e). This was largely
a result of the Rotary Uninterruptible Power Supply (RUPS), which
operated for a full year in 2023, significantly contributing to power
stability and reducing the use of diesel generators to provide
back-up power in stormy months. On-going efficiencies in the
Mineral Separation Plant and a 9% decrease in production were
other drivers. Diesel consumption was 13.5% lower in 2023 at 19.9
million litres (2022: 23 million litres of diesel). Carbon intensity,
at 0.0524 tCO
2
e per tonne of mined product, decreased by 5%
compared to the prior year (2022: 0.0554 tCO
2
e).
Kenmare’s imported grid electrical power represented zero
tCO
2
e market-based emissions (2022: 0 tCO
2
e) and 16,571 tCO
2
e
location-based emissions (2022: 16,337 tCO
2
e). Kenmare’s grid
electrical power comes from Electricidade de Moçambique (EdM),
Mozambique’s national energy company, which sources most of its
power from Hidroelectrica de Cahora Bassa’s (HCB) hydroelectric
dam. EdM confirms annually that the grid electrical power it
supplies to Kenmare is 100% hydroelectric. Energy efficiency
improved by 3% in 2023 to 0.0113 MWh/ton of excavated ore.
Kenmare’s most significant category of indirect or Scope 3
emissions is from the processing of products downstream. The
emissions from this category are estimated at 3.8 million tCO
2
e.
In 2024, Kenmare will bring this category of emissions into its
boundary, to align with draft sector guidance from the EU’s
Corporate Sustainability Reporting Directive and the International
Council on Mining and Metals (ICMM) guidance on Scope 3
reporting. In 2023, indirect emissions, excluding the processing
of products downstream, were 110,204 tCO
2
e, which compared
to 115,218 tCO
2
e in 2022. The reduction was largely led by lower
downstream transportation emissions from the shipment of
products by customers to their processing sites.
Kenmare is working towards its target of a 12% reduction in
Scope 1 emissions in 2024 against a 2021 baseline, however,
diesel consumption is forecast to increase in the year ahead. The
business is working to counter the impact of this increase with
energy efficiency projects and other decarbonisation programmes
getting underway.
SCOPE CATEGORY 2021 2022 2023
Scope 1 (tonnes CO
2
e) 70,445 66,519 57,141
Scope 2 (tonnes CO
2
e) Purchased electricity, market-based - - -
Scope 2 (tonnes CO
2
e) Purchased electricity, location-based 14,504 16,337 16,571
Scope 3 (tonnes CO
2
e) Category 1: Purchased goods and services 6,066 9,608 11,554
Category 2: Capital goods - 1,865 655
Category 3: Fuel- and energy-related emissions - - 12,511
Category 4: Upstream transportation emissions 35,868 34,041 34,510
Category 5: Waste generated in operations 12 18 33
Category 6: Business travel 117 1,008 1,317
Category 7: Employee commuting 2,110 2,035 2,278
Category 9: Downstream transportation emissions 79,953 66,644 47,346
Total Scope 3 (tonnes CO
2
e) 124,126 115,218 110,204
Total Scopes 1, 2 and 3 Scope 2 - Market-based 194,571 181,737 167,345
Scope 2 - Location-based 209,075 198,074 183,916
Emissions intensity
Revenue (Scope 1 tCO
2
e per 1,000 USD) 0.1675 0.1335 0.1240
Production (Scope 1 tCO
2
e per tonne of ore excavated) 0.00179 0.00166 0.00148
Production (Scope 1 tCO
2
e per tonne of finished product) 0.0573 0.0554 0.0524
68
Kenmare Resources plc Annual Report and Accounts 2023
A HEALTHY NATURAL ENVIRONMENT CONTINUED
Improving post-mined land for
agricultural productivity
Climate adaptation
Kenmare is working to improve the resilience of the Mine’s host
communities to extreme weather events as a result of climate
change. Kenmare helps repair storm-damaged community
infrastructure in line with Government guidelines, which requires
structures to be resilient to Category 4 cyclones. Most villages
now have a place to take shelter and stay safe during a cyclone
event. In addition, KMAD sponsors a Conservation Agriculture
(CA) programme, which benefits over 600 community farmers.
CA teaches farmers to improve the yields from their crops and
better protect their farms from drought, flooding, and disease.
Energy
Kenmare is fortunate to operate in a country with abundant,
renewable, hydroelectric power. Early in the Company’s operations,
it invested in building 170 km of overhead power cables between
Moma and Nampula to link the Mine to power from the Cahora
Bassa Dam (CBD) supplied by EdM. This clean energy source
represented over 90% of Kenmare’s overall electrical energy
consumption in 2023 and 54% of the operation’s total energy
consumption. Kenmare’s operations will require more power in the
medium term. A new 400kV power line from Chimuara to Alto
Molocue and then Nampula was constructed in 2023 and is due
to come online in 2024. This will increase the power capacity to
the Mine. Additionally, the Company is studying the most effective
method to increase transmission capacity from Nampula to Moma
using reactive compensation devices to meet the Company’s
growing energy demands as it moves to the mining the Nataka ore
zone. In the short term, to insure against power outages caused by
lightening or other extreme weather, the Company has capacity
from diesel generators to generate power on site.
Kenmare continuously seeks ways to improve the soil
quality of post-mined land. Previous trials have proven that
fine clay sands, known as “slimes”, retain moisture, helping
crops and trees survive the long dry season. In 2023,
varying volumes and ways of applying slimes were tested
in a trial near the village of Mulimuni. In this trial, over 20
plots were established, testing five different methods of
integrating slimes. One approach involved the mechanical
spreading of one to three layers of slimes, with the material
being furrowed into the ground with a plough after each
application. The manual spreading of slimes in lines and
in 30cm deep holes is also being trialled. Each of the plots
will be compared to the control plot, which has no slimes.
Over six different food crops were planted between lines
of indigenous trees in an agroforestry design. Plant growth
and survival rates are being monitored and the weight of
harvested crops will inform the most effective applications
of slimes.
>600
Farmers using Conservation
Agriculture techniques
ENERGY CONSUMPTION BY SOURCE (MWH) 2021 2022 2023
Total diesel consumption (direct) 242,775 231,467 197,797
Petrol 489 374 376
Liquified petroleum gas (LPG) 489 530 413
Total non-renewable energy 243,753 232,372 198,585
EdM (grid) energy 207,719 233,923 237,293
Dublin (grid) energy 17 27 25
Total renewable energy 207,736 233,950 237,318
Total energy 451,489 466,322 435,903
% of renewable energy 46% 50% 54%
INTENSITY MEASURES 2021 2022 2023
Revenue (MWh per 1,000 USD) 1.0736 0.9358 0.9458
Excavation (MWh per tonne of ore excavated) 0.0115 0.0116 0.0113
Production (MWh per tonne of finished product) 0.3675 0.3884 0.3994
69
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Addressing the Task Force on Climate-related Financial Disclosures (TCFD)
recommendations
Climate-related disclosures on governance, strategy and risk
management, as well as metrics and targets, are integrated into
this report, as set out below. Information in the 2021 Climate
Change Report and 2023 Sustainability Report supplements
these disclosures and is available at www.kenmareresources.com.
Together, these reports are consistent with the four thematic
areas, 11 recommended disclosures and “Guidance for All Sectors”
set out in the October 2021 “Implementing the Recommendations
of the Task Force on Climate-Related Financial Disclosures”. To aid
readers, the key climate-related disclosures can be found here:
GOVERNANCE LOCATION
Describe the Board’s oversight of
climate-related risks and opportunities.
2023 ANNUAL REPORT
Board skills matrix – page 90
Board of Directors – page 92
Governance framework – page 96
Board activities in 2023 – page 99
Areas of focus in 2023 – pages 101
2023 SUSTAINABILITY REPORT
Sustainability governance – page 58
Describe management’s role in assessing
and managing climate-related risks and
opportunities.
2023 ANNUAL REPORT
Financial review – page 52
Climate risk – page 66
2023 SUSTAINABILITY REPORT
Kenmare management – page 59
STRATEGY LOCATION
Describe the climate-related risks and
opportunities the organisation has
identified over the short, medium, and
long term.
2023 ANNUAL REPORT
Sustainability strategy – page 60
Climate change risks and opportunities – page 67
Climate and energy strategy – page 67
Describe the impact of climate-
related risks and opportunities on the
organisation’s businesses, strategy, and
financial planning.
2023 ANNUAL REPORT
Accounting for climate – page 159
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-related
scenarios, including a 2°C or lower
scenario.
2023 ANNUAL REPORT
Climate and energy – page 67
Climate risk – page 67
2021 CLIMATE STRATEGY REPORT
Physical risk analysis – page 13
Transition risk analysis – page 16
RISK MANAGEMENT LOCATION
Describe the organisation’s processes for
identifying and assessing climate-related
risks.
2023 ANNUAL REPORT
Climate risk – page 80
Principal risks – page 80
Describe the organisation’s processes for
managing climate-related risks.
2023 ANNUAL REPORT
Principal risks – page 78
Describe how processes for identifying,
assessing and managing climate-
related risks are integrated into the
organisation’s overall risk management.
2023 ANNUAL REPORT
Principal risks – page 78
METRICS AND TARGETS LOCATION
Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process.
2023 ANNUAL REPORT
Key performance indicators – page 36
2021 CLIMATE STRATEGY REPORT
Physical and transition metrics – page 19
Disclose Scope 1, Scope 2, and, if
appropriate, Scope 3 Greenhouse Gas
(GHG) emissions and the related risks.
2023 ANNUAL REPORT
GHG emissions – page 68
Energy consumption by source – page 69
Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets.
2023 ANNUAL REPORT
ESG Scorecard performance – page 59
Climate and energy strategy – page 67
70
Kenmare Resources plc Annual Report and Accounts 2023
A HEALTHY NATURAL ENVIRONMENT CONTINUED
Rehabilitation
In 2023, 187 hectares (ha) of land were rehabilitated, 12 ha above the
target of 175 ha. To restore the biodiversity lost through the mining
process, close to 151,000 indigenous trees were planted (2022:
73,000). Kenmare will engage with its host communities over the
long-term on the value of biodiversity, as historically many planted
indigenous trees were removed to make space for machambas or
farm smallholdings. Additionally, to provide a source of wood for
fires and building, and to stabilise dunes, Kenmare planted 53,000
casuarinas (2022: 83,000), a fast growing, nitrogen-fixing hard
wood tree, which survives well in sandy soils.
Biodiversity
The Mozambican Government introduced a Biodiversity Offset
Diploma in 2022, which introduces the requirement for projects
such as the Moma Mine to demonstrate No Net Loss or 15% Net
Gain, depending on whether the project impacts critical habitats,
ecosystems, or endangered species. In 2023, Kenmare appointed
consultants to help develop a Biodiversity Offset Management Plan,
due for submission in the first half of 2024 to the Ministry of Land
and Environment (MITA).
In 2023, Kenmare and the Primeiras and Segundas Archipelagos
Protected Area Management Committee (APAIPS), continued work
to establish the Icuria forest as a Sanctuary, in order to protect the
Icuria Dunensis species, which is identified as Endangered by the
International Union for Conservation of Nature (IUCN). In 2023,
Kenmare and APAIPS continued this on-going application to the
National Conservation Agency (ANAC).
Tailings storage
In 2023, Kenmare continued its work to align its tailings facilities
and management process with the Global Industry Standard on
Tailings Management (GISTM), which promotes the principles
of sustainable and responsible management of tailings storage
facilities, across the mining industry. The global standard requires
adherence to its 15 principles, encompassing social, design,
technical, operational, management and closure. As part of the
implementation of GISTM, a gap analysis of current practices
was completed by an independent reviewer. A roadmap has been
drawn up, which sets out the key milestones to be completed by
the end of 2024 to achieve GISTM alignment.
In 2023, the Company achieved a significant milestone by
defining clear governance roles and responsibilities, including the
appointment of an Accountable Executive and Engineer of Record
for Tailings Storage Facility (TSF) safety. This transparent structure
fosters accountability and facilitates efficient decision making.
Waste
All non-hazardous waste is dealt with either by being sent to
landfill or by being packaged for recycling. All hazardous waste
is disposed of responsibly by third parties. In 2023, Kenmare
generated 300 tonnes of non-recyclable and organic waste and
70 tonnes of recyclable waste, of which almost 30 tonnes was sent
offsite for recycling in Maputo.
Water stewardship
In 2023, the operations efficiency rate was 0.61 m
3
water withdrawn
per tonne of excavated ore, a 5% decreased efficiency compared
to (2022: 0.58 m
3
/tonne of ore). This reduced efficiency is
attributed to additional slimes management at Wet Concentrator
Plant (WCP) A and WCP C, an extended pond size at WCP B,
offpath slimes deposition, and increased use of tail stackers. Water
abstraction for Kenmare’s Namalope and Pilivili operations was in
line with regulatory water withdrawal limits. In 2023, 90% of the
total mine water used (214,420 ML) was recycled or reused.
Neither the mining nor processing operations at Moma use toxic
chemicals. Therefore, operational water losses through seepage,
where water returns to the underlying aquifers and adjacent
surface water systems as baseflow, do not affect the ambient
groundwater and surface water quality. Using the WRI Aqueduct™
tool, all the water extracted for the Moma Mine is in an area
identified as low baseline water stress. Projections as far out as
2040 indicate a similar low water stress. Nevertheless, Kenmare is
committed to responsible use and efficient management of water.
WATER
WITHDRAWN
Volume in Megalitres
23,553 ML
SURFACE WATER
7,624 ML
SEAWATER
0 ML
GROUNDWATER
15,929 ML
OTHER WATER
0 ML
WATER
DISCHARGED
Volume in Megalitres
15,262 ML
SURFACE WATER
0 ML
SEAWATER
0 ML
GROUNDWATER
13,719 ML
OTHER WATER (EVAPORATION)
1,543 ML
TOTAL WATER
VOLUME USED
237,973 ML
WATER
REUSED/RECYCLED
90.1%
Water performance
71
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
2023 achievements
$43.6 million in payments to the Mozambican Government
(2022: $29.5 million)
290 members of public security forces trained in the Voluntary
Principles on Security and Human Rights
100% of on-site suppliers audited against Kenmare Supplier
Code of Conduct
The Company achieved 15% out of 25% performance on ESG
Scorecard linked to Executive Remuneration
Sustainability and safety are integrated into all levels of the
business, with key objectives outlined in the Company’s policies,
standards, strategies, business, and incentive plans. The
Board’s Sustainability Committee plays a key role in monitoring
this work. It meets four times a year and conducts in-depth
discussions on the strategies for mitigating Kenmare’s top
safety and sustainability risks, progress on internal metrics and
public targets, and plans to continuously improve the Company’s
performance.
Business transparency
Kenmare has governance and controls in place to ensure the
Company’s policies and standards are upheld and that all work
meets legal and regulatory requirements. The Company’s
commitment to ethical behaviour is outlined in its Business
Ethics Policy and Moma employees undergo induction or annual
refresher training on its requirements.
Kenmare subscribes to the Extractive Industries Transparency
Initiative (EITI) and the Company reports on its annual tax and
royalty payments. All payments disclosed have been made to
national governments, either directly or through a ministry or
department of the national government on a cash basis. Kenmare
is also actively involved in the efforts of the Mozambique branch
of the EITI to promote revenue transparency and accountability.
For full details of Kenmare’s EITI disclosures see the 2023
Sustainability Fact Book. Kenmare maintains positive working
relationships with Government stakeholders at national, regional,
district and local levels. Kenmare does not make any form of
political donation.
Anti-bribery and corruption
Kenmare has zero tolerance of bribery and corruption, and is
committed to acting professionally, fairly and with integrity in
all business dealings and relationships. In 2023, 58% of Kenmare
employees completed annual online training on Kenmare’s policies
and expectations on Business Ethics, Anti-Bribery & Corruption,
and Human Rights.
Material topics
Business transparency
Supply chain
Anti-bribery and
corruption
Compliance and audit
Stakeholders
Employees and unions
Government and
regulators
Shareholders
Suppliers, contractors
and customers
ECONOMIC VALUE DISTRIBUTED,
MOZAMBIQUE ($M)
KENMARE’S PRINCIPLES, VALUES, AND STANDARDS GUIDE HOW
EMPLOYEES PERFORM THEIR WORK AND HELP THE COMPANY
UPHOLD THE HIGHEST POSSIBLE ETHICAL STANDARDS.
BUSINESS
COMMUNITIES
WORKFORCE
ENVIRONMENT
79
SPEND WITH
MOZAMBICAN
SUPPLIERS
4.7
COMMUNITY
INVESTMENT
33.5
MOZAMBICAN
EMPLOYEE
WAGES
43.6
PAYMENTS TO
GOVERNMENT
84%
Suppliers aligned with Supplier
Code of Conduct
72
Kenmare Resources plc Annual Report and Accounts 2023
TRUSTED BUSINESS
Kenmare has Memorandums of Understanding (MoUs)
with the Provincial Police Command in Nampula and the
Ministry of National Defence for the provision of police
and naval security forces in and around the mining
concession. Under these MoUs, Kenmare contributes to
the financing of equipment and salaries of the security
forces. The MoUs state that the public security forces
providing security services to the Mine must uphold
the Voluntary Principles on Security and Human Rights
(VPSHR) and the United Nations Basic Principles Relating
to the Use of Force and Firearms by the Law Enforcement
Officials. In support of this, an internationally recognised,
certified, and independent third party provides training
on the implementation of the Voluntary Principles twice
a year. These sessions consisted of two-day workshops
involving the training of 290 public security personnel in
2023. The workshops covered: The Universal Declaration
of Human Rights (1947); the International Covenant
on Civil and Political Rights (1966); the International
Convention on Economic, Social and Cultural Rights (1966);
the International Labour Organisation Declaration on
Fundamental Rights at Work (1998); as well as Kenmare
case studies and shared learning examples.
Employees and contractors are encouraged to speak up if they
observe behaviour that they believe does not meet Kenmare’s
ethical standards. In 2023, eight cases were reported via Safecall,
the Company’s independent whistleblowing line. One further case
came to the Company’s attention, so a total of nine cases were
investigated. Three Safecall reports related to the same incident.
Two cases related to concerns about corrupt activities and one
case was substantiated, resulting in the blocking of the supplier’s
account. Another allegation found to be substantiated was
related to contractor employees not receiving their wages. The
seriousness of this issue was discussed with the contractor and
Kenmare’s expectation on the timely payment of fair wages was
reinforced.
2023 ETHICS INVESTIGATIONS TOTAL
New issues captured via a third-party
whistleblowing mechanism 8
Total number of issues investigated 9
Total substantiated cases 4*
*3 of the cases related to the same issue
Protection of human rights
Kenmare is committed to upholding the human rights of all
stakeholders and respecting human rights in its mining operations
and supply chain. The Company’s Human Rights policy sets out
Kenmare’s respect for internationally recognised human rights,
including fundamental labour rights and international labour
standards as set out in the Universal Declaration of Human
Rights, and the International Labour Organisation’s Declaration
on Fundamental Principles and Rights at Work. All new employees
are provided with a copy of the Human Rights policy and undergo
training on expectations in this area. Breaches of Human Rights
or employment policies are treated seriously and may result in
sanctions against the relevant personnel.
Sustainable supply chain
Kenmare has the dual objective of increasing the proportion of
its Mozambican suppliers, whilst ensuring all suppliers meet its
sustainability standards. The 2023 supplier sustainability audit
showed an overall alignment score of 84%, compared to the 79%
achieved in 2022, suggesting a positive impact from the on-going
capacity building programmes. The audit revealed evidence of
strong support for, and conformance to, Kenmare’s policies as
well as some areas for improvement. Gaps in some suppliers’
approaches included: not adopting specific policies, such as
Diversity and Inclusion, and not having sufficient anti-bribery
controls in place. In some cases, the requirement for expansion of
environmental programmes has not been met.
Ensuring public security forces uphold the
Voluntary Principles
73
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
EU Taxonomy
On review of the EU Taxonomy Regulation (EU) 2020/852,
Kenmare concludes that none of its economic activities in 2023
were taxonomy eligible. Kenmare continues to await the sector
guidance for mining to determine whether the Company’s
products may be eligible and aligned under the Taxonomy
Regulation.
Kenmare’s products include titanium dioxide (TiO
2
) and a
monazite-rich mineral sand concentrate, which includes rare earth
elements (REEs), both of which Kenmare believes have a role to
play in the transition to a low carbon economy. TiO
2
enhances
the durability and sustainability of construction products and
buildings through its resistance to heat, ultraviolet degradation,
and weathering. Consumption of raw materials as well as waste
production is reduced with lower maintenance requirements.
In plastics, TiO
2
pigment helps to protect and extend product
lifetime, reducing plastic waste. TiO
2
in paint also has a high
refractive capability, reflecting heat generated by the infra-red
rays of the sun. TiO
2
paints applied to the surfaces of buildings
and cool roofs can therefore help to reduce heat build-up and
avoid air conditioning requirements. Nascent scientific studies are
also exploring the conversion of methane, a potent Greenhouse
Gas, into carbon dioxide, which has a much lower Global Warming
Potential using the photocatalytic capability of titanium dioxide.
This technology is already in use as a film covering high-rise glass
buildings, due to its self-cleaning capabilities.
Titanium metal represents a small proportion (4-5%) of the total
market for Kenmare’s titanium feedstocks, however, demand for
titanium metal in low-carbon technologies such as geothermal,
nuclear, and solar is growing. In addition, REEs are essential for
permanent magnets in wind turbines and electric vehicle motors. In
a scenario where temperature increases are limited to 1.5ºC due to
rapid decarbonisation of the economy, the projected growth up to
2050 for these metals is 60% for titanium metal and 80% for REEs
relative to a business-as-usual case, where temperature increases
continue their current trajectory.
BREAKDOWN OF TAXONOMY-ELIGIBLE ECONOMIC ACTIVITIES DATA FOR 2023
ELIGIBLE
ACTIVITIES 2023 TOTAL TAXONOMY ELIGIBLE TAXONOMY NON-ELIGIBLE
$m ($’000) % $m % $m ($’000)
Turnover 458,477 0 0 100 458,477
Capital expenditure 69,730 0 0 100 69,730
Operating expenditure 303,353 0 0 100 303,353
74
Kenmare Resources plc Annual Report and Accounts 2023
TRUSTED BUSINESS CONTINUED
Mozambique is one of 57 countries that subscribe to the
Extractive Industries Transparency Initiative (EITI) and
Kenmare representatives have been on Mozambique’s
EITI co-ordinating committee since its inception in 2009.
STRATEGIC REPORT
75
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
MANAGING RISK IS AN INTEGRAL PART OF KENMARE’S BUSINESS.
THE GROUP APPLIES A COMPREHENSIVE PROCESS FOR IDENTIFYING,
ASSESSING AND MANAGING RISKS ASSOCIATED WITH ITS OPERATIONS
AND BUSINESS AND STRATEGIC CORPORATE DECISIONS.
Risk management framework
An overview of the risk management and internal control framework, responsibilities within it and the relationship between
functions is set out below. While the Board is ultimately responsible for risk management within the Group, it has delegated
responsibility for the monitoring of the effectiveness of the Group’s risk management and internal control systems to the Audit
& Risk Committee. The Board and Audit & Risk Committee receive reports from the Executive Committee on the key risks to the
business and the steps being taken to mitigate such risks. The Audit & Risk Committee reviews the principal risks and uncertainties.
First line of defence
Operational management has
ownership, responsibility and
accountability for directly
assessing, controlling and
mitigating risks.
Second line of defence
Kenmare has various oversight
functions, which are responsible
for providing subject matter
expertise, defining standards
and ensuring adherence and
compliance.
Third line of defence
Internal audit provides assurance
to the Board on how effectively
the organisation assesses and
manages its risks. It includes
assurance on the effectiveness
of the first and second lines of
defence.
Board of Directors
The Board of Directors has ultimate
responsibility for risk management.
The Board receives reports and
updates from the Board Committees
and the Executive Directors on the key
risks facing the business and the steps
taken to manage these risks. The
Board delegates responsibility to the
Audit and Risk Committee.
Executive Committee
The Executive Committee monitors
and facilitates the implementation
of effective risk management
practices by departmental
management and ensures
appropriate risk reporting up
and down the organisation.
Audit & Risk Committee
Responsible for monitoring
and assessing the Group’s risk
management and internal control
systems. Receives regular
updates on risk management
strategies, mitigation and
action plans.
Sustainability Committee
Responsible for monitoring
developments related to
sustainability risks including
safety, health, environment,
climate and social performance,
and providing strategic direction,
oversight and risk assurance.
76
Kenmare Resources plc Annual Report and Accounts 2023
PRINCIPAL RISKS AND UNCERTAINTIES
Risk assessment process
The Group’s risk assessment process is based
on a coordinated, Group-wide approach to
the identification and evaluation of risks
and the manner in which they are monitored
and managed. This process begins with a
bottom-up approach involving operational
managers who, through a programme of
workshops, regularly perform a detailed
risk review to update the departmental
risk registers. In assessing the potential
impact and likelihood of each risk identified,
management considers the existing key
controls and evaluates the risks in terms of
potential residual impact. A standard risk-
scoring matrix is used to ensure consistency
in reporting across all areas.
Departmental risk registers are consolidated
into a Group Risk Register. The Executive
Committee provides input to ensure that
there is a top-down view of the key risks
facing the Group. This includes consideration
and assessment of any newly identified
emerging risks. Following a review of the
Group Risk Register by the Executive
Committee, the principal risks identified for
the Group and their mitigations are submitted
to the Audit & Risk Committee and Board for
review and approval.
As part of this review and approval process,
the Audit & Risk Committee provides a
robust assessment of the emerging and
principal risks faced by the Group. This is
achieved by offering alternative viewpoints
and challenging risk scoring assumptions as
appropriate.
1
Permitting, licensing and
Government agreement risk
2
Country risk
3
Geotechnical risk
4
Severe weather events
5
Uncertainty over physical
characteristics of the orebody
6
Loss of production due to
power supply and transmission
interruption
7
Asset damage or loss
8
Health, Safety and Environment
9
Material misstatement in the Ore
Reserves & Mineral Resource Table
10
IT security risk
11
Development project risk
12
Industry cyclicality
13
Customer and/or market
concentration
14
Foreign currency risk
15
Aggressive cost inflation
Risk heat map
HIGH>
1 2 3 4 5
LIKELIHOOD
IMPACT
<LOW
<LOW
HIGH>
1 2 3 4 5
6
4 10
15
1
2 7 8
14
3
5 9
12
13
11
77
Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Risk appetite
Exploration for, and the development of, Mineral Resources,
together with the construction and development of mining
operations in Mozambique, are activities that involve high risk.
Kenmare makes informed decisions prior to engaging in any
associated activities that pose a significant risk to the Group.
Where activities are undertaken, appropriate mitigations are
put in place commensurate with the degree of risk that is faced.
For some risks, such as country risk and industry cyclicality,
these risks are inherent to the Company’s business and there is
a limit on the level of mitigation that can be put in place given
the single jurisdiction and the single industry in which the Group
operates. Kenmare has a very low appetite and tolerance for risk
in areas which potentially impact the health and safety of its staff,
community and/or environment.
Emerging risks
Kenmare considers emerging risk as part of the risk assessment
process within the Group’s risk management framework. An
emerging risk is one that could potentially impact the Group;
however, the risk is not yet fully understood, limiting its ability to
fully assess the likelihood and impact of such risks. Such risks are
closely monitored, enabling Kenmare to implement mitigations
when necessary or appropriate.
Task Force on Climate-related Financial
Disclosures
In line with regulatory reporting requirements, Kenmare used two
alternate warming scenarios to evaluate climate-related risks
applicable to its operations and business model. These included
both physical risks and those related to the transition to a low
carbon economy, such as policy, regulatory, technology, market
and reputational risks.
The Group has summarised its climate risk analysis on page 66.
Further detail on its climate risks are set out in the 2021 Climate
Strategy Report available at www.kenmareresources.com. This
analysis confirms extreme weather events, and in particular
cyclones and storms, present the most material climate-related
risk to its business. The controls in place to mitigate this risk are
set out on page 80. No other climate-risks have been identified as
a principal risk or uncertainty.
Principal risks and uncertainties
Under Section 327(1)(b) of the Companies Act 2014 and
Regulation 5(4)(c)(ii) of the Transparency (Directive 2004/109/EC)
Regulations 2007 and UK Disclosure and Transparency Rule 4, the
Group is required to give a description of the principal risks and
uncertainties that it faces. These risks are similar to those faced
by many companies in the mining industry. A description of the
principal risks and uncertainties, together with mitigating factors
and controls, are set out in the table on pages 79 to 85. This table
is not prioritised nor is it an exhaustive list of all risks that may
impact the Group, but rather the Board’s view of principal risks
at this point in time. There are additional risks that are not yet
considered material or that are not yet known to the Board or fully
understood but that may assume greater importance in the future.
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Kenmare Resources plc Annual Report and Accounts 2023
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
LINKS TO STRATEGY
Operate
responsibly
Deliver long-life,
low-cost production
Allocate capital
efficiently
STRATEGIC
Permitting, licensing and Government agreement risk
STRATEGY
DESCRIPTION
The Group’s mining and processing activities require its foundation agreements (Mineral Licensing Contract and
Implementation Agreement), and various licences, permits, concessions and approvals to be in place in the relevant mining
areas in northern Mozambique. The Group may not be granted, may not maintain, or may not obtain a renewal or extension
of its foundation agreements, necessary licences, permits, concessions and approvals for it to operate in accordance with
its plans. This could be because of failure or inability to comply with conditions or processes, including in connection with
community consultation processes; pressure from stakeholders; administrative delay and/or failure by the relevant authorities
to comply with the terms of the foundation agreements and/or applicable law.
POTENTIAL
IMPACT
In addition, the terms of any such agreement, licence, concession or approval, renewal or extension may be less advantageous
than expected and the costs associated with obtaining, maintaining, renewing or extending such agreement, licence,
concession or approval may be higher than expected.
HOW KENMARE
MANAGES RISK
Robust foundation agreements (Mineral Licensing Contract and Implementation agreement) entitle the Group to be issued
a number of key permits and provide it with rights of extension in relation to those foundation agreements.
Continued compliance with terms of foundation agreements and maintenance of existing licences in good standing.
The Group continually demonstrates its commitment to the future long-term development of the Mine.
The Group maintains a positive working relationship with the Government of Mozambique through regular contact,
promoting open and honest two-way communication.
Engagement with affected local communities to work towards obtaining the required environmental approvals.
RISK TREND
The term of the Implementation Agreement (which governs the terms of KMPL’s operation of the IFZ (Industrial Free Zone))
ends in December 2024.
The Group has applied for an extension of the agreement for a further 20 years, to which it is entitled under the agreement and
is in active communication with Mozambican authorities in connection with the extension.
Whilst the Group believes an extension will be obtained, the ongoing extension process means that the perception of risk has
increased compared to the prior year.
Notwithstanding the increase in perceived risk, the location of the risk on the risk heat map on page 77 remains unaltered
because the assessment of likelihood remains within the same range as last year (although it has moved to the upper end of that
range).
Country risk
STRATEGY
DESCRIPTION
The Group’s operations are located entirely in Mozambique. There may be potential adverse operational or financial impacts
from changes in the political security or economic circumstances in Mozambique. In addition, changes in, or disputes over, the
regulatory or tax regimes in Mozambique (including changes in the interpretation or application of those regimes to the Group)
could also have an adverse impact.
POTENTIAL
IMPACT
Kenmare has operated in Mozambique since 1987; however, it remains subject to risks similar to those prevailing in many
developing nations, including economic and social instability, the risk of insurgency, changing regulatory or tax regime (or the
application thereof) or disputes with the authorities in relation to the same.
These risks may cause significant disruption to the operation or cause an increase in costs in order to ameliorate their impact. In
addition, increases in taxes could have an adverse effect on the Group’s financial results.
HOW KENMARE
MANAGES RISK
Binding foundation agreements are in place with legal and fiscal stability clauses and international arbitration provisions.
The Group maintains a positive working relationship with the Government of Mozambique, including the Ministry of
Resources and Energy (MIREME) and the tax authorities.
Kenmare monitors closely any developments in the national environment.
Frequent engagement with the Mozambique Defence Department, navy marines, and police.
In-house monitoring of activities and on-going improvement of security strategy.
On-site diesel storage and power generation systems are in place to maintain processing and export activities to mitigate
electrical supply infrastructure impacts.
Internal and external compliance reviews of Kenmare’s tax administration.
RISK TREND
The risk of insurgence in the Cabo Delgado province remains an area of focus, however Total Energies have announced
resumption of work in the area, which is expected to commence in Q1 2024.
Taking all the country risk factors into account, there is no significant change to the overall assessment of country risk
compared to the prior year.
TREND KEY
Risk is
increased
Risk is
unchanged
Risk is
decreased
New
risk
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Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
OPERATIONAL
Geotechnical risk
STRATEGY
DESCRIPTION
An external berm failure at the Moma Mine could result in a major slimes/water spill into adjoining valleys, potentially impacting
on local communities and/or the operating assets.
POTENTIAL
IMPACT
The nature of dredge mining gives rise to the creation of artificial ponds and a potential for failure of berm systems that
surround the ponds. A failure of a berm could cause loss of life, damage to the operating assets and cessation of the operation
of the Wet Concentrator Plants (WCPs) for a prolonged period.
HOW KENMARE
MANAGES RISK
Permanently employed staff with geotechnical engineering skills.
Prudent geotechnical design and controls.
Daily inspections.
Interlocking external audits from two separate and independent geotechnical consultants.
Safety/diversion berm erected to protect downstream from pond berm failure.
On-going installation and monitoring of pipes on ponds to control excess water.
Additional risk management measures include transitioning to the Global Industry Standard on Tailings Management (GISTM).
RISK TREND
External berm failure remains a key focus in risk management. There are no circumstances envisioned that would be expected
to increase the risk profile of geotechnical risk throughout 2024.
Based on this, there is no significant change in the assessment of this risk compared to the prior year.
Severe weather events
STRATEGY
DESCRIPTION
Climate change and the location of the Group’s operations on the Mozambican coast, gives rise to the risk from cyclone activity
and severe wind/flooding. Such events pose risk to the safety of mine staff, contractors, and visitors, as well as to physical damage
to the operational assets. For further information on the climate-related risks Kenmare faces, see its 2021 Climate Strategy Report.
POTENTIAL
IMPACT
In extreme weather circumstances, there is a risk of loss of life. There is a risk of physical damage to the operating assets of
the Mine, which may result in an inability to operate the Mine. Weather forecasting allows for disaster planning. Heavy rain and
flooding can also impact supply logistics to and from the Mine.
HOW KENMARE
MANAGES RISK
Mine and associated infrastructure designed to appropriate cyclone rating.
Designated cyclone-proofed buildings at the Mine.
On-going weather/cyclone monitoring.
Cyclone readiness plan covering land-based and marine assets.
Disaster management programme.
Insurance cover.
Adequate stock of materials and supplies on site.
RISK TREND
Although this risk may increase in future years, there have been no significant changes to the assessment of the risk compared
to the prior year.
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Kenmare Resources plc Annual Report and Accounts 2023
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
OPERATIONAL CONTINUED
Uncertainty over physical characteristics of orebody
STRATEGY
DESCRIPTION
Orebody characteristics, including slime levels, may not conform to existing geological or other expectations or may have an
unanticipated effect on production. Orebody characteristics, including slime levels, in some of the ore bodies may differ from
those previously mined and may require changes in mining methods and/or additional plant and equipment.
POTENTIAL
IMPACT
Physical characteristics of an orebody, including divergence from expectations, may cause reduced production levels or a
necessity to incur increased operating or capital costs to maintain production at the intended level.
HOW KENMARE
MANAGES RISK
Extensive sample testing.
Extensive orebody drill programme including introduction of cone penetration testing to measure orebody properties
relating to hardness and in-fill drilling at Pilivili in 2023 as further described in “Ore Reserves & Mineral Resources”.
Test pits/trenching implemented.
Expertise in managing slimes and in managing unexpected mining conditions.
Dry mining operations.
Improved throughput modelling.
Definitive Feasibility Study for Nataka considering the impact of slimes on mining, processing, and tailings emplacement.
Investment in Geometallurgy department, including a new laboratory.
Assessment of AI tools to better identify and manage areas of high slimes.
RISK TREND
As further described in “Ore Reserves & Mineral Resources”, in 2023 Kenmare identified issues with grades encountered in the
Pilivili ore zone. The Company identified the underlying cause and took corrective action.
As a result, the overall assessment of this risk remains unchanged.
Loss of production due to power supply and transmission interruption
STRATEGY
DESCRIPTION
The Mine is reliant on the delivery of stable and continuous electric power by Electricidade de Mocambique (EdM) from the
Cahora Bassa Dam via a power transmission line to the Mine.
Furthermore, additional power in excess of that currently agreed to be supplied by EdM is required for the future operations of
the Mine, including in connection with the transition to Nataka.
The viability of obtaining additional power will need to be analysed and may require additional infrastructure.
POTENTIAL
IMPACT
Significant disruption to, or instability in, the power supply at the Mine could have a material and adverse effect on the
ability to operate the Mine or to operate it in the lowest cost manner, thereby adversely affecting production volumes and/or
operating costs.
In addition, a failure to obtain any additional power required by future operations, or to obtain such power at acceptable cost
could have a material and adverse effect on the ability to operate the Mine or to operate it in the lowest cost manner, thereby
adversely affecting production volumes and/or operating costs.
HOW KENMARE
MANAGES RISK
Company’s Synchronous Condenser (Dip Doctor) reduces the effect of grid power instability.
The Rotary Uninterruptible Power Supply (RUPS) provides increased power reliability to the MSP as it is able to supply it
with alternative power where issues with incoming grid power are detected.
On-site diesel-powered generators are able to power part of the mining operations in the case of planned or prolonged
unavailability of stable grid-power, thereby maintaining HMC production at approximately 50%.
Projects are underway to ensure the Mine is not solely reliant on EdM breakers and to ensure protection of the internal
power infrastructure.
Consideration of options for additional power supply for future operations, and dialogue with EdM and other stakeholders in
connection therewith.
RISK TREND
There have been no significant changes to the overall assessment of the risk compared to the prior year.
Completion by EdM of upgrades to its transmission infrastructure are expected to reduce the risk in future years.
LINKS TO STRATEGY
Operate
responsibly
Deliver long-life,
low-cost production
Allocate capital
efficiently
TREND KEY
Risk is
increased
Risk is
unchanged
Risk is
decreased
New
risk
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Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
OPERATIONAL CONTINUED
Asset damage or loss
STRATEGY
DESCRIPTION
The operation of a large mining and processing facility carries an inherent risk of technical failure of equipment, fires and other
accidents. In addition, the assets are exposed to the risk of theft.
POTENTIAL
IMPACT
An occurrence of these risks could result in damage to, or destruction of, key mining, processing or shipping facilities at the
Mine, such as the transshipment vessels, the jetty or product conveyor belt. Loss of such key assets could result in disruption to
production and/or shipping, significant replacement cost and consequential monetary losses.
HOW KENMARE
MANAGES RISK
Programme of inspections and planned maintenance with a team of specialist engineers.
Standard operating procedures.
Fire detection and suppression systems.
Annual external risk assessment and compliance audit.
Insurance cover.
Carrying sufficient strategic spares.
Investment in improved technology infrastructure to enable improved monitoring of assets, enabling the identification and
prevention of damage and/or theft-related incidents.
Newly built warehouse storing critical and costly spares.
RISK TREND
The Mine has noted a reduction of security-related incidents during 2023.
The assessment of the risk remains unchanged from previous years.
Health, Safety and Environment (HSE)
STRATEGY
DESCRIPTION
The operation of a large mining and processing facility carries a potential risk to the health and safety of the workforce, visitors
and the local community.
Incidents carry potential for environmental damage to surrounding areas.
POTENTIAL
IMPACT
The improper use of machinery, poor maintenance, technical failure of certain equipment or failure to meet and maintain
appropriate safety standards could result in significant injury, loss of life or significant negative impact on the surrounding
environment and/or communities.
In addition, it is possible that a failure to comply fully with applicable regulations exposes the Mine to the risk of fines or other
sanctions by a relevant regulator.
HOW KENMARE
MANAGES RISK
Prioritisation of HSE by management.
Appropriately trained staff.
Standard operating procedures.
On-going hazard identification programme.
Health and Safety awareness programme implemented for the Company and community.
Mine clinic and evacuation procedures for staff.
Community investment and programmes including health clinic and education programmes.
Compliance with applicable HSE standards and legislation.
RISK TREND
While the Mine’s LTIFR for 2023 was 0.15, health and safety remains an area of priority for the Company.
The overall assessment of this risk remains unchanged.
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Kenmare Resources plc Annual Report and Accounts 2023
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
OPERATIONAL CONTINUED
Material misstatement in the Ore Reserves & Mineral Resource Table
STRATEGY
DESCRIPTION
A material misstatement in the Ore Reserves and Mineral Resources statement.
POTENTIAL
IMPACT
A material misstatement could adversely impact the Company’s valuation.
HOW KENMARE
MANAGES RISK
JORC-compliant statement prepared by competent person.
Review by independent specialist in 2023 of methodologies, as further described in “Ore Reserves & Mineral Resources”.
On-going drilling and sampling programme, including in-fill drilling at Pilivili in 2023 as further described in “Ore Reserves &
Mineral Resources”.
On-going reconciliation of mining results to Mineral Resource models.
RISK TREND
As further described in “Ore Reserves & Mineral Resources”, in 2023 issues were identified with cut-off grades and with drilling
conducted in the 1990s at Pilivili, following which improvements and corrections made. As a result, the overall assessment of
this risk remains unchanged.
IT security risk
STRATEGY
DESCRIPTION
The Group is dependent on the employment of advanced information systems and is exposed to risks of failure in the operation
of these systems. Further, the Group is exposed to security threats through cyber attacks.
POTENTIAL
IMPACT
A failure in these systems, or a successful cyber attack, could lead to:
• Disruption to critical business systems and operational equipment.
• Loss or theft of confidential information, competitive advantage, or intellectual property.
• Financial and/or reputational harm.
• Imposition of sanctions for breach of laws/regulations.
HOW KENMARE
MANAGES RISK
Analysis by external certified IT specialists of Group information systems to ensure reliability and protection to align with
industry information security standards.
Third-party specialists provide network assurance.
On-going strategic and tactical efforts to address the evolving nature of cyber threats.
Increased user training and IT security awareness.
Increased management attention, coupled with additional internal and external resources.
RISK TREND
Management have increased focus on IT and cyber security risk, and significant progress has been made in 2023 in managing
this risk. This same effort will continue into 2024.
The risk trend remains unchanged from the previous year.
Development project risk
STRATEGY
DESCRIPTION
The DFS for the WCP A upgrade and transition to Nataka was completed in 2023.
All development projects include the risk of taking longer and costing more than anticipated.
POTENTIAL
IMPACT
Failure to successfully engineer, design, plan execute and complete the Nataka transition and other development projects, or to
do so on time and on budget, and to operate completed projects in the manner anticipated could have adverse operational and
financial impacts.
HOW KENMARE
MANAGES RISK
Rigorous project appraisal and design process, including Pre-feasibility and Definitive Feasibility Studies.
Significant mining trials in connection with the transition to Nataka.
Owner’s team and use of industry experts with track records of delivery of a number of development projects for Kenmare.
Efficient procurement practices regarding long lead items, ensuring timely delivery and certainty over certain
construction costs.
RISK TREND
The transition of WCP A to Nataka represents the largest development project of the Group in a decade.
As the Nataka transition project is in execution phase, the perceived risk has increased compared to the prior year.
LINKS TO STRATEGY
Operate
responsibly
Deliver long-life,
low-cost production
Allocate capital
efficiently
TREND KEY
Risk is
increased
Risk is
unchanged
Risk is
decreased
New
risk
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Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
FINANCIAL
Industry cyclicality
STRATEGY
DESCRIPTION
The Group’s revenue generation may be significantly and adversely affected by declines in the demand for and prices of the
ilmenite, zircon, rutile and concentrate products that it produces. During rising commodity markets, there may be upward
pressure on operating and capital costs.
POTENTIAL
IMPACT
Unfavourable product market events beyond the Group’s control and/or pressure on operating or capital costs may adversely
affect financial performance.
HOW KENMARE
MANAGES RISK
Global portfolio of customers.
Long-term contracts with certain key customers.
On-going cost control and disciplined financial management.
Industry analysis to develop suitable assumptions in the Group’s commodity price forecasting used for planning purposes.
RISK TREND
Although Kenmare has seen a more challenging market in 2023 with prices for its products decreasing, the assessment of this
risk remains unchanged from prior years.
Customer and/or market concentration
STRATEGY
DESCRIPTION
The customer base and market for the Group’s ilmenite, zircon, rutile and concentrate products is concentrated.
POTENTIAL
IMPACT
The Group’s revenue generation may be significantly affected if there ceases to be demand for its products from major existing
customers, or is restricted from dealing with those customers, and it is unable to further expand its customer base in respect of
the relevant product.
HOW KENMARE
MANAGES RISK
Active management of existing customer relationships and development of new customers.
Market intelligence to track developments in customer demand.
Development of mineral sands concentrate as an additional co-product stream with a different customer base.
RISK TREND
There have been no significant changes to the overall assessment of this risk compared to the prior year.
Foreign currency risk
STRATEGY
DESCRIPTION
The Group’s revenues are entirely denominated in US Dollars, whereas costs are denominated in a number of currencies
including South African Rand, Mozambican Meticais, Euros and US Dollars.
POTENTIAL
IMPACT
The nature and location of the Mine and the intrinsic volatility of exchange rates give rise to an on-going significant probability
of occurrence of an adverse exchange rate fluctuation. The impact of such a fluctuation can be large across calendar years.
HOW KENMARE
MANAGES RISK
Group debt is denominated in US Dollars.
A natural hedge exists between revenue receipts and US Dollar-denominated costs.
A further natural hedge exists between the value of US Dollars and commodity prices over the long-term. When commodity
prices increase, the Group’s non-US Dollar-denominated costs tend to increase in US Dollar terms. When commodity prices
decrease, the Group’s non-US Dollar-denominated costs tend to decrease in US Dollar terms.
South African Rand hedging facilities in place.
RISK TREND
Foreign currency exposure has remained relatively unchanged from an operational perspective.
The risk therefore remains unchanged from prior years.
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Kenmare Resources plc Annual Report and Accounts 2023
PRINCIPAL RISKS AND UNCERTAINTIES CONTINUED
FINANCIAL CONTINUED
Aggressive cost inflation
STRATEGY
DESCRIPTION
Inflationary-related increase in operating or capital costs above expected inflation rates.
POTENTIAL
IMPACT
Aggressive inflation could have a negative impact on the Group’s cash cost per tonne and profitability.
HOW KENMARE
MANAGES RISK
Fixed price supply agreements where possible.
Multi-year labour agreements.
Understanding cost drivers and promoting pro-active cost management throughout the Group.
Active management of existing supplier relationships and development of new supplier relationships to ensure the Group
receives competitive contractual arrangements.
RISK TREND
There have been no significant changes to the overall assessment of this risk compared to the prior year.
LINKS TO STRATEGY
Operate
responsibly
Deliver long-life,
low-cost production
Allocate capital
efficiently
TREND KEY
Risk is
increased
Risk is
unchanged
Risk is
decreased
New
risk
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Kenmare Resources plc Annual Report and Accounts 2023
STRATEGIC REPORT
Scenario Relevant principal risk
SCENARIO 1:
RECESSIONARY ENVIRONMENT
Scenario assumptions include reduced customer demand as a result of supply-
side pressure and increased operating costs due to inflationary pressure.
Aggressive cost inflation, Industry cyclicality,
Customer and/or market concentration.
SCENARIO 2:
ONE-OFF FINE, PENALTY OR EVENT
Scenario assumptions include the occurrence of a singular catastrophic event
resulting from an operational failure, safety incident or extreme weather event
or the occurrence of a singular fine or penalty as a result of a regulatory breach.
Country risk, Health, Safety and Environment,
IT security risk.
SCENARIO 3:
COMBINATION OF SCENARIOS
The most severe scenario, although unlikely, considers the financial impact of
both scenario 1 and scenario 2 materialising simultaneously.
Combination of relevant risks from previous scenarios.
The Board, taking into consideration the Group’s principal risks and uncertainties, including emerging
risks, assessed the long-term viability of the Group in accordance with Provision 31 of the UK
Corporate Governance Code. Its conclusions are outlined below.
Viability assessment: period
The Board has reviewed the length of time to be covered by the
Viability Statement, particularly given its primary purpose of
providing investors with a view of financial viability that goes
beyond the period of the Going Concern Statement.
The Directors concluded that three years is an appropriate period
for the assessment as they have reasonable clarity over the
Group Forecast assumptions over this period. In a commodity-
based business, uncertainty increases inherently with expanding
time horizons potentially impacting the large number of external
variables, in particular sales pricing.
Overall, a three-year timeframe is deemed to achieve a suitable
balance between long and near-term influences.
Viability assessment: approach
The viability of the Group is assessed against strategic plans and
projections, and considers cash flows, committed funding and
liquidity positions, forecast future funding requirements and other
key financial ratios.
The Directors’ assessment has been made based on the Group
forecast with reference to the cash generation capabilities of the
Group, its committed debt facilities, including its $200 million
committed Revolving Credit Facility, which is available to 11
March 2029, the Board’s risk appetite and the principal risks and
uncertainties and how they are managed, as detailed on pages
76 to 85.
The Directors also assessed the potential financial and operational
impacts, in severe but plausible scenarios, of the principal risks
and uncertainties and the likely degree of effectiveness of current
and available mitigating actions as shown below. Sensitivity
analysis has been applied to certain key assumptions in the
Group forecast including revenue, operating costs and covenant
compliance.
Assessment of prospects
The Directors carried out a robust assessment of Kenmare’s
current position and the principal risks facing the Group, including
emerging risk and those that would threaten its strategy, business
model, future performance, solvency or liquidity.
The Board’s consideration of the long-term prospects of the
Group is an extension of the strategic planning process. This
includes the annual budget review, regular financial forecasting,
a comprehensive risk management assessment and scenario
planning, which considers the Group’s principal risks and
uncertainties.
Conclusion
Based on their assessment of the three scenarios detailed below
and future prospects, the Directors confirm that they have a
reasonable expectation that the Group will continue to operate
and meet its liabilities, as they fall due, for the next three years to
31 December 2026.
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Kenmare Resources plc Annual Report and Accounts 2023
VIABILITY STATEMENT
In March 2024 Kenmare agreed a new $200 million
Revolving Credit Facility to support the Company’s
planned capital programmes in the coming years.
The new facilities continue Kenmare’s strong
relationship with existing lenders and provide
enhanced financial flexibility.
STRATEGIC REPORT
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Kenmare Resources plc Annual Report and Accounts 2023
Wet Concentrator Plant (WCP) A is the largest of Kenmare’s
three mining plants, responsible for over 50% of Kenmare’s
Heavy Mineral Concentrate production. In 2024, Américo’s
focus is to continue to effectively manage slimes at WCP A
to deliver production improvements.
Américo Amoda
WET CONCENTRATOR PLANT A PLANT SUPERINTENDENT
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Governance at a glance
90
Board of Directors
92
Executive Committee
94
Corporate governance report
96
Nomination Committee report
110
Sustainability Committee report
114
Audit & Risk Committee report
118
Remuneration Committee report
124
Annual report on remuneration
128
Directors’ report
140
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
The Board
How the composition of Kenmare’s Board allows it to deliver long-term
sustainable value for Kenmare and its stakeholders.
Skills matrix
Kenmare requires each Director
to be recognised as a person of
the highest integrity and standing,
both personally and professionally.
Each Director must be ready to
devote the time necessary to
fulfil their responsibilities to the
Company in accordance with
the terms and conditions of
their letter of appointment. Each
Director should have demonstrable
experience, skills and knowledge
that enhance Board effectiveness
and complement those of the other
Board members. This is to ensure
an overall balance of experience,
skills and knowledge, and to create
long-term sustainable value for the
Company and its stakeholders.
AREA IAB MC MD EDK CF TH GM DS AW
Executive management
Experience as a Director, CEO, CFO or
other office holder or similar in medium
to large entities.
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Specific industry knowledge
Senior Executive, advisory or Board
experience in a mining or resources
organisation.
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
Accounting and finance
Senior Executive experience in financial
accounting and reporting, or business
development or Board Remuneration
and Nomination Committee experience.
✓ ✓ ✓ ✓ ✓ ✓ ✓
Sustainability
Experience and knowledge of working
on sustainability activities directly or as
part of operational responsibility.
✓ ✓ ✓ ✓
Climate
Leadership on climate and
decarbonisation.
✓ ✓
Legal and governance
Experience in organisations with a
strong focus on, and adherence to,
governance standards.
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
International experience
An understanding of the complexities
of operating in foreign jurisdictions.
✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓ ✓
LENGTH OF TENURE COMPOSITION
2
United Kingdom
3Ireland
1
Brazil
1USA
Denmark
1
Oman
1
NATIONALITYBOARD GENDER DIVERSITY
4
0-3 years
2
6+ YEARS
3
3-6 YEARS
5
INDEPENDENT
NON-EXECUTIVE
DIRECTORS
1
NON-EXECUTIVE
DIRECTOR
1
CHAIR
2
EXECUTIVE
DIRECTORS
6
MALE
3
FEMALE
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE AT A GLANCE
Responsibly meeting global demand
How the Board has supported the Group to responsibly meet global demand
for quality-of-life minerals.
DEVELOPING
KENMARE’S CULTURE
ENGAGING WITH
KENMARE’S
STAKEHOLDERS
SUPPORTING KENMARE’S
OPERATIONS TEAM TO
ACHIEVE ITS GOALS
Kenmare’s values of integrity,
commitment, accountability, respect
and excellence (ICARE) underpin
everything it does and creates the
Kenmare culture. This means that
Kenmare cares for, and nurtures, the
well-being not only of its employees
but also of the environment and host
communities. The Board receives
regular briefings on relations with the
workforce and the community to ensure
that policy, practices and behaviour
throughout the business are aligned
with the Group’s purpose, values and
strategy. It had the opportunity to meet
employees and Community members
personally on its visit to the Moma
Mine in December 2023 and to discuss
Kenmare’s strategy and any concerns
they might have.
Read more about how the Board
monitors culture on pages 102 to 103
The Sustainability Committee actively
engages with management and
provides advice and oversight on
matters such as health and safety,
environment, community, security and
human rights, all of which impact on the
Group’s relationships with stakeholders.
Its meetings include in-depth
discussion on strategies to ensure that
both Kenmare and its stakeholders
understand not only the context and
impact of operations but also the
benefits. The Committee also reviews
progress on internal sustainability
metrics and public targets, which
provide an incentive to continuously
improve engagement. Directors
engage with shareholders, lenders and
authorities throughout the year.
Read more about how Kenmare
engages with stakeholders on pages
22 to 23
The Board provides feedback and
constructive challenge to management
in relation to operational performance
and, through the Company’s
remuneration structure, sets targets
to incentivise the Executives to reach
and maintain production targets
and achieve market guidance. The
Remuneration Committee reviews
remuneration and related policies
applicable to the wider workforce,
ensuring that these are taken into
account when setting the policy for
Executive remuneration. The aim
across the Group is to provide a reward
package that is aligned to shareholders’
interests, supports the achievement
of the Company’s annual and strategic
objectives, is competitive against the
appropriate market and is consistent
with its focus on performance and core
values.
Read more about 2023 performance
targets on pages 132 to 133
Read more about performance and
reward for 2023 on page 125
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Andrew Webb (AW)
CHAIRMAN AND
NON-EXECUTIVE DIRECTOR
Age: 55 Appointed: 2021
Skills and experience: Andrew Webb was previously
a managing director at Rothschild & Co. in the Global
Advisory team, where he worked for 25 years until
September 2018. During this time, Andrew advised
governments, private and listed companies and joint
ventures on strategy, fundraisings, debt financings,
mergers, on and off-market acquisitions, disposals and
restructurings. He currently acts as a Non-Executive
Director of Ecora Minerals plc and several private
companies and voluntary organisations. Andrew has
a BA & MA in Natural Sciences from the University of
Cambridge. He brings his considerable experience in
corporate finance to the Company.
External appointments: Andrew is a Non-Executive
Director and Chair Designate of Ecora Minerals plc, a
royalty company listed on the London Stock Exchange.
He is also a Director of BG Sports Enterprises Limited,
a sports memorabilia company, AdeptoMines Limited,
a mining software company, Launcherley Tourism, a
holiday apartment letting company as well as a number
of community interest/not-for-profit companies in
England. All of these are private unlisted companies.
Andrew also acts as a consultant to Berkeley Research
Group and Ecometric Limited, a climate-tech group.
Issa Al Balushi (IAB)
NON-EXECUTIVE DIRECTOR
Age: 35 Appointed: 2023
Skills and experience: Issa Al Balushi is a Manager
in Economic Diversification Investments at Oman
Investment Authority (OIA). He has more than 10
years of experience in the financial industry and has
worked as a portfolio manager for several OIA assets
nationally and internationally. Previously, he worked at
the Central Bank of Oman as a bank examiner and at
EY in Oman as a financial analyst. He holds a Master’s
degree in Financial Analysis from UNSW, Sydney and
a Bachelor of Science, Finance from SQU, Muscat. Issa
brings his experience in the financial industry and in
international investment to Kenmare.
External appointments: Issa is a Director of
several private companies owned by OIA and Omani
state-owned enterprises.
Michael Carvill (MC)
MANAGING DIRECTOR
Age: 64 Appointed: 1986
Skills and experience: Michael Carvill is a Fellow of
the Institute of Engineers of Ireland (FIEI). He holds a
BSc in Mechanical Engineering from Queen’s University
Belfast and an MBA from the Wharton School of the
University of Pennsylvania. He worked as a contracts
engineer in Algeria and as a project engineer at Tara
Mines, Ireland. Michael brings his experience in mining
and, specifically, mineral sands to Kenmare as well as
his in-depth knowledge of its operations and history.
External appointments: Michael is a Director of a
number of privately owned property and construction
companies in Ireland and the UK.
Mette Dobel (MD)
NON-EXECUTIVE DIRECTOR
Age: 56 Appointed: 2022
Skills and experience: Mette Dobel has over 25 years’
experience in the mining, cement and engineering
industries. She was, until 2022, Regional President,
Europe, North Africa, Russia/CIS for FLSmidth, an
engineering, equipment and service solutions provider
to the global mining and cement industries. She was
previously, for 12 years, a director of FLSmidth A/S and
FLSmidth & Co. A/S, which is listed on Nasdaq OMX
Exchange in Copenhagen. She holds a Master’s degree
in Engineering and a Bachelor of Science (Commercial)
from Københavns Teknikum. Mette contributes her
engineering expertise as well as her governance and
employee relations experience to the Company.
External appointments: Mette is a Non-Executive
Director of M&J Recycling ApS, which is a private
Danish company and also a Director of her family
investment company.
Tom Hickey (TH)
FINANCIAL DIRECTOR
Age: 55 Appointed: 2022
Skills and experience: Before his appointment to
Kenmare in September 2022, Tom Hickey served
for 15 years as Executive Director of various public
companies. This included eight years as Chief Financial
Officer of the African and South American-focused
oil and gas producer Tullow Oil Plc. Tom also held
senior financial roles with the oil and gas exploration
company Petroceltic International Plc between 2010
and 2016, including as Chief Financial Officer and was
an Independent Non-Executive Director with United
Oil & Gas Plc and Petroneft Resources Plc. Tom has
a Bachelor of Commerce degree and a Diploma in
Professional Accounting, both from University College
Dublin, and he is a Fellow of the Irish Institute of
Chartered Accountants. He contributes his skills and
expertise as an experienced finance professional, as well
as his natural resources background, to the Company.
External appointments: Tom is a Director of Boru
Energy Limited, a personal consultancy company and a
Non-Executive Director of Teamwork Holdings Limited,
Kuldea Limited and Vortech Water Solutions Limited,
all of which are private unlisted companies, as well as
Donore Harriers Company Limited by Guarantee, an
athletics club.
Elaine Dorward-King (EDK)
NON-EXECUTIVE DIRECTOR
Age: 66 Appointed: 2019
Skills and experience: Elaine Dorward-King has
over 30 years’ experience in the mining, chemicals
and engineering industries, including the mineral
sands sector. She was Executive Vice President of
Sustainability and External Relations for Newmont
Goldcorp from 2013 to 2019, where she was responsible
for sustainability strategy, including climate and
decarbonisation. Prior to that, she worked from 1992
to 2013 for Rio Tinto, as Global Head of Health, Safety
and Environment and Managing Director of Richards
Bay Minerals in South Africa. She holds a Bachelor of
Science, magna cum laude, from Maryville College,
Tennessee and a PhD in Analytical Chemistry from
Colorado State University. Elaine brings a wealth of
natural resources and sustainability.
External appointments: Elaine is a Non-Executive
Director of JSE and NYSE-listed Sibanye Stillwater
Ltd, NYSE and TSX-listed Novagold Resources Inc and
TSX-listed Nevada Copper Corp.
S
A
S
R
N
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Kenmare Resources plc Annual Report and Accounts 2023
BOARD OF DIRECTORS
COMMITTEE KEY
A
Audit & Risk Committee
N
Nomination Committee
R
Remuneration Committee
S
Sustainability Committee
C
Committee Chair
Clever Fonseca (CF)
NON-EXECUTIVE DIRECTOR
Age: 70 Appointed: 2018
Skills and experience: Clever Fonseca has worked
in the titanium industry for over 35 years. He has
extensive knowledge and Board-level management
experience of mineral sands mining and he has worked
in the titanium pigment and feedstock industries.
He was responsible for developing Brazil’s only
dredge-mined mineral sands operation, was Vice
President of Global Supply and Mining for Millennium
Inorganic Chemicals (now part of Tronox) in the US,
and also served as Executive Director of Mineral
Deposits Ltd in Melbourne. Most recently, he was
Chief Executive of TiZir Ltd until 2012. He has a BSc
in Mining Engineering from Universidade Federal De
Pernambuco, and an MBA from Fundacao Getulio
Vargas, both in Brazil. Clever contributes his skills and
experience in the titanium industry to the Company.
External appointments: None.
Graham Martin (GM)
NON-EXECUTIVE DIRECTOR
Age: 70 Appointed: 2016
Skills and experience: Graham Martin has over 35
years’ experience in the global natural resources sector
with a particular focus on Africa. From 1997 to 2016 he
served as an Executive Director of Tullow Oil Plc, an
oil and gas exploration, development and production
company listed on the London, Irish and Ghanaian
stock exchanges. Prior to Tullow, he was a partner at
the US energy law firm Vinson & Elkins LLP, and at the
UK corporate law firm Dickson Minto WS. He holds a
degree in Law and Economics from the University of
Edinburgh. Graham brings his experience in law and
natural resources and his expertise in the remuneration
area to Kenmare.
External appointments: Graham is Non-Executive
Chairman of United Oil & Gas Plc, an AIM-listed oil and
gas company.
Deirdre Somers (DS)
NON-EXECUTIVE DIRECTOR
Age: 57 Appointed: 2020
Skills and experience: Deirdre Somers has over 20
years’ experience in senior management positions,
having served as Chief Executive of the Irish Stock
Exchange (ISE) from 2007 to 2018 and, prior to that, as
its director of listing. She led the ISE’s transformation
to a highly profitable entity with global specialisms
culminating in its sale in March 2018 to Euronext NV.
She also held the position of president and board chair
of the Federation of European Securities Exchanges
from 2015 to 2018. Deirdre, a qualified Chartered
Accountant, also worked with KPMG for eight years
and holds a Bachelor of Commerce degree from
University College Cork. She contributes her financial
skills and market experience to the Company and is
the financial expert on the Audit and Risk Committee.
External appointments: Deirdre is a Non-Executive
Director of Aquis Exchange Plc (quoted on the
Alternative Investment Market of the London Stock
Exchange), Enfusion, Inc. (listed on the New York Stock
Exchange) and the investment entities iShares I plc,
iShares II plc, iShares III plc, iShares IV plc, iShares V plc,
iShares VI plc and iShares VII plc (all BlackRock entities
listed in various markets) and Episode Inc. (unlisted).
She is also a Non-Executive Director of Cancer Trials
Ireland Limited, which is a Irish registered charity.
S R
A
R N
N
A
R
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Michael Carvill
MANAGING DIRECTOR
Michael Carvill has been the Managing
Director of Kenmare since 1986. He
worked as a contracts engineer in Algeria
and as a project engineer at Tara Mines,
Ireland. He is a Fellow of the Institute of
Engineers of Ireland (FIEI). He holds a
BSc in Mechanical Engineering (Queen’s
University, Belfast) and an MBA (Wharton
School, University of Pennsylvania).
Jeremy Dibb
HEAD OF CORPORATE DEVELOPMENT
AND INVESTOR RELATIONS
Jeremy Dibb joined Kenmare in 2014,
having previously covered the mining
sector as an equity research analyst at
Macquarie and Canaccord Genuity. Prior
to this he worked in asset management at
Cazenove Capital and Fidelity. Jeremy is a
chartered accountant, holds an MBA from
Saïd Business School at the University
of Oxford and is a CFA® charterholder.
Jeremy is also a Non-Executive Director of
AIM-listed DP Poland Plc.
Tom Hickey
FINANCIAL DIRECTOR
Tom Hickey joined Kenmare as Financial
Director in September 2022. Before this,
he served for 15 years as executive and/
or non-executive director of various
public companies including Tullow Oil Plc,
Petroceltic International Plc and United
Oil and Gas Plc. Tom has a Bachelor
of Commerce degree and a Diploma
in Professional Accounting, both from
University College Dublin, and he is a
Fellow of the Irish Institute of Chartered
Accountants.
Terence Fitzpatrick
GROUP GENERAL MANAGER –
TECHNICAL
Terence Fitzpatrick is a graduate of
University of Ulster (Mech. Eng.). He
worked as Project Manager and then
Technical Director of Kenmare from
1990 to 1999. He was responsible for the
development of the Ancuabe Graphite
Mine in Mozambique, which achieved
completion in 1994. He was appointed to
the Board of Kenmare in 1994. He served
as a Non-Executive Director from 2000
to 2008. He was appointed as Technical
director in February 2009 and served until
July 2018.
Ben Baxter
CHIEF OPERATIONS OFFICER
Ben Baxter joined Kenmare in 2015 and
has over 25 years’ experience in the
mineral sands industry. He was previously
employed by Rio Tinto at Richards Bay
Minerals (RBM) in South Africa and QMM
in Madagascar, where he held a broad
range of geological, mine planning and
leadership roles before being appointed
General Manager Mining. Ben holds a
BSc (Hons) in Applied Geology from
the University of Leicester and an MSc
in Mining Geology from the Camborne
School of Mines. In 2022, he completed
the Advanced Management Programme at
Harvard Business School.
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Kenmare Resources plc Annual Report and Accounts 2023
EXECUTIVE COMMITTEE
Chelita Healy
COMPANY SECRETARY
Chelita Healy graduated from University
College Dublin with a Bachelor of Civil Law
degree and a Master’s degree in European
Law. She qualified as a Solicitor in 1996.
She then worked as a solicitor and, later,
as a Partner, in a Dublin legal firm before
joining Kenmare’s Company Secretarial
department in 2019. She was appointed
Company Secretary in May 2021.
Cillian Murphy
MARKETING MANAGER
Cillian Murphy joined Kenmare in
October 2016. He graduated with a BSc in
Economics and Finance from University
College Dublin. Cillian initially worked
in Kenmare’s Investor Relations and
Corporate Development team before
becoming a marketing executive. He
has been Marketing Manager since
January 2020.
Gareth Clifton
MOZAMBIQUE MANAGER
Gareth Clifton holds a BA Economics
degree from the University of Exeter
and an MSc in African Studies from
the University of Edinburgh. He joined
Kenmare in 2001 having worked as a
General Manager for Union Transport LDA.
He previously held the position of manager
for a Mozambican shipping agent and also
worked for the UNDP.
Rajan Subberwal
GENERAL COUNSEL
Rajan Subberwal joined Kenmare in June
2013. He previously worked at Sullivan &
Cromwell LLP in London and he trained
at Clifford Chance LLP in London and
Frankfurt. Rajan has a BA from Oxford
University, an LLB from London University,
and an LLM from Harvard Law School. He
is admitted as a solicitor in Ireland and
England and Wales, and as an attorney in
New York.
Carlos Freesz
GLOBAL HEAD OF ICT
Carlos Freesz joined Kenmare in 2022
and has over 25 years of experience in
technology in various industries. He has
held global technology leadership and
management positions at MARS, IBM,
SAP, and Accenture, bringing together
technology strategy and execution
and partnered with companies such as
Vale, CSN and Anglo-American. Carlos
holds a BSc in Mechanical and Industrial
Engineering from Faculdade de Engenharia
Industrial (Brazil), an MSc in Digital
Strategy from Trinity College Dublin and
an Executive MBA from INSPER (Brazil).
Anna Brog
HEAD OF SUSTAINABILITY
Anna Brog joined Kenmare in 2021. She
was previously at Tullow Oil Plc, whose
assets are predominantly in Africa, where
she led the development of the company’s
ESG programme as its Sustainability
Manager. Prior to this she was head of
Corporate Social Responsibility at Logica
Plc, a multinational IT and management
consultancy company. Anna holds a post
graduate Certificate in Sustainability from
the University of Cambridge and a BA
from the University of Sussex.
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
The Directors recognise the importance of corporate governance and
ensure that appropriate corporate governance procedures are in place.
The 2018 UK Corporate Governance Code issued by the UK’s Financial Reporting Council
(FRC) in July 2018 (the “Code”) applies to the Company as it has a premium listing on
the London Stock Exchange. A copy of the Code can be obtained from the FRC’s website,
www.frc.org.uk. In the financial year under review, the Directors complied with all relevant
provisions of the Code. The table on the right outlines the main Principles of the Code and
where in this Annual Report there is further information on the application of the Principles.
Board leadership and Company purpose: Kenmare’s
Governance framework
Board of Directors
Main Principles Pages
Board leadership
and company purpose
96, 101,
102
and 103
Division of responsibilities 97
Composition, succession
and evaluation 98
Audit, risk and
internal control 107, 121
Remuneration 124-139
AUDIT & RISK
COMMITTEE
Monitors the
appropriateness and
integrity of the Group’s
financial reporting,
external audit,
internal audit and risk
management processes.
NOMINATION
COMMITTEE
Evaluates the composition
of the Board to ensure
an effective balance of
skills and experience,
and considers succession
planning for Directors and
Senior Executives.
REMUNERATION
COMMITTEE
Determines the policy for
remuneration of the Chair,
the Executive Directors,
the Company Secretary
and such other Executive
management as it is
designated to consider.
SUSTAINABILITY
COMMITTEE
Oversees the
implementation
of the Group’s
sustainability-focused
corporate policies.
Supported by
ROLE OF THE BOARD
MATTERS RESERVED
FOR THE BOARD
The Board is collectively responsible for the leadership, oversight, control, development
and long-term success of the Group. It works with management to set corporate vision and
develop strategy, with the aim of creating long-term sustainable value for the Company’s
shareholders, while recognising and discharging wider responsibilities to other stakeholders,
including employees, customers, suppliers and the communities in which it operates, and to
the environment. The Board constructively challenges and holds to account the management
team, in relation to both operational and financial performance of the Group and wider
sustainability goals. It is also responsible for ensuring that accurate and understandable
information is provided about the Group to shareholders, finance providers and other
stakeholders on a timely basis.
The Board’s responsibilities include:
• ensuring that appropriate management, development and succession plans are in place;
• reviewing the health, safety and sustainability performance of the Group, including its
response to climate;
• approving the appointment of Directors and their remuneration and severance;
• ensuring that satisfactory dialogue takes place with shareholders;
• understanding the views of the Group’s other key stakeholders and keeping engagement
mechanisms under review so that they remain effective;
• assessing the basis on which the Group generates and preserves value over the long term;
• assessing and monitoring culture;
• providing a means for the workforce to raise concerns in confidence;
• a robust assessment of the Group’s emerging and principal risks; and
• monitoring the effectiveness of the Group’s risk management and internal control systems.
The Board has a formal schedule of
matters specifically reserved for its
decision, including:
• strategic decisions;
• risk management and internal
controls;
• acquisitions and capital
expenditure above agreed
thresholds;
• approval of interim and final
dividends and share purchases;
• changes to the capital structure;
• tax and treasury oversight;
• approval of half-yearly and
annual financial statements;
• budgets and matters currently
or prospectively affecting the
Group and its performance;
• Board and Committee
membership; and
• Remuneration policy.
This schedule is available at
www.kenmareresources.com/en/
about-us/corporate-governance
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Kenmare Resources plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE REPORT
Responsibilities of members of the Board
DIRECTOR RESPONSIBILITIES
Chair The Chair leads the Board and is responsible for its overall effectiveness in directing the Company. The Chair
should demonstrate objective judgement throughout their tenure and promote a culture of openness and debate.
In addition, the Chair facilitates constructive Board relations and the effective contribution of all Directors, and
ensures that Directors receive accurate, timely and clear information.
Managing
Director
The Managing Director is responsible for managing the Company and the Group on a day-to-day basis within
policy parameters set by the Board.
Financial
Director
The Financial Director is responsible for contributing to the attainment of the Company’s business objectives by
providing strategic and financial guidance to ensure that the Company’s financial commitments are met and by
developing all necessary policies and procedures to ensure the sound financial management and control of the
Company’s business.
Senior
Independent
Director
The Senior Independent Director (SID) provides a sounding board for the Chair and serves as an intermediary for
the other Directors and shareholders.
Non-Executive
Directors
The Non-Executive Directors’ main responsibilities are to review the performance of management and the Group’s
financial information, assist in strategy development, and ensure that appropriate and effective systems of internal
control and risk management are in place. They provide a valuable breadth of experience and independent
judgement to Board discussions.
Summaries of the responsibilities of the Chair, Managing Director and Senior Independent Director
can be found at www.kenmareresources.com/en/about-us/corporate-governance
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Climate Strategy
Governance
The Chair, Andrew Webb, is responsible for overseeing Kenmare’s
sustainability strategy, including its Climate Strategy. The Sustainability
Committee of the Board ensures expert oversight and provides both
the Board and Executive Committee with direction on sustainability,
including overseeing the development and review of the Company’s
Climate Strategy and management plan. Further details on the
Sustainability Committee’s responsibilities and the matters it reviewed
in 2023 are on pages 114 to 116. In 2023, the Board’s consideration
of climate in the Company’s strategy and capital allocation included
updates from the Sustainability Committee on the development of the
Climate Transition Plan due to be published in 2024, as well as updates
from the Audit & Risk Committee on the financial assessment of
physical and transition climate risk in preparation for TCFD disclosures.
Advocacy and lobbying
Kenmare welcomes the COP27 agreement on finance to provide
“loss and damage” funding for vulnerable countries already being
hit hard by climate disasters, with Mozambique being one of the
countries most vulnerable to extreme weather events.
Kenmare is not a member of any trade associations. The Company
supports the position of the International Council on Mining and
Metals on climate, to achieve net zero by 2050 or sooner. Kenmare
also supports policies that encourage investment in low-carbon
technologies and supports disincentives for the ongoing use of
fossil fuels.
Composition and operation of the Board
The Board consists of the Chair and eight Directors, of whom
two are Executive and six are Non-Executive. Biographical
details, including each Director’s date of appointment, are set
out on pages 92 and 93. The majority of the Board is made up of
independent Non-Executive Directors. The Chair is required to be
Non-Executive and independent on appointment.
The Board has delegated responsibility for management of the
Group to the Managing Director and the management team.
A clear division of responsibility exists between the Chair, whose
principal responsibility is the effective running of the Board and
is not responsible for Executive matters regarding the Group’s
business, and the Managing Director, whose principal responsibility
is running the Group’s business on a day-to-day basis. A summary
of the role and responsibilities of each of the Chair and the
Managing Director can be found on the Company website at
www.kenmareresources.com/about-us/corporate-governance.
The Board has delegated some of its responsibilities to four
Committees of the Board: Audit & Risk, Remuneration, Nomination
and Sustainability. Each Committee has written Terms of
Reference that set out its authorities and responsibilities.
These Terms of Reference are available for review at the
Company’s registered office and on the Company’s website at
www.kenmareresources.com/about-us/corporate-governance.
On 25 January 2023, Issa Al Balushi was appointed to the Board
having been nominated by African Acquisitions S.à.r.l, the
Company’s largest investor and a company controlled by the
Oman Investment Authority (OIA).
As a result, female Directors now comprise one-third of the Board
and 11% of the Board is from an ethnic minority background. The
current composition would meet the recommendations of the
Parker Review and the Hampton-Alexander Review regarding
Board ethnic and gender diversity respectively, were they
applicable to the Company. Information required by the Listing
Rules on the Board and Executive Committee’s gender and ethnic
diversity are in the Nomination Committee report on page 112. The
diversity policy on Board appointment is set out in the Nomination
Committee report on page 112 and incorporated into this report.
All Directors offer themselves for re-election at the Company’s
AGM in May 2024.
Commitments
Non-Executive Directors are expected to devote such time as is
necessary for the proper performance of their duties. This will
include attendance at regular Board and Committee meetings,
the AGM and any extraordinary general meetings, Board dinners,
occasional site visits and meetings with shareholders. In addition,
they are required to consider all relevant papers prior to each
meeting. They are required to obtain the agreement of the Board
before accepting additional commitments that might affect the
time they are able to devote to their role at Kenmare. This matter
is considered by the Nomination Committee on an ongoing basis
in accordance with its Terms of Reference.
Board meetings
The Board meets regularly to ensure that all its duties are
discharged effectively. All Directors are expected to prepare for,
and attend, meetings of the Board and the AGM. If a Director
is unable to attend a Board meeting in person, teleconference
arrangements are available to facilitate participation. In the event
that a Board member cannot attend or participate in the meeting,
the Director may discuss agenda items with the Chair, Managing
Director or Company Secretary in advance of the meeting.
A schedule of Board and Committee meetings is circulated to the
Board for the following year. A more detailed agenda and Board
materials are made available electronically in the week preceding
the meeting.
During 2023, the Board held seven meetings. Details of the
Directors’ and Company Secretary’s attendance at Board and
Committee meetings are set out below:
FULL BOARD
AUDIT & RISK
COMMITTEE
REMUNERATION
COMMITTEE
NOMINATION
COMMITTEE
SUSTAINABILITY
COMMITTEE
A B A B A B A B A B
Non-Executive Director
Issa Al Balushi
1
7 7
Mette Dobel 7 7 2 2 4 4
Elaine Dorward-King 7 7 6 6 4 4 4 4
Clever Fonseca 7 7 6 5 5 5 4 4
Graham Martin 7 7 5 5 4 4
Deirdre Somers 7 7 6 6 5 5 4 4
Andrew Webb 7 7
Executive Directors
Michael Carvill 7 7
Tom Hickey 7 7
Company Secretary
Chelita Healy
2
7 7 6 6 5 5 4 4 4 4
Column A indicates the number of meetings held during the period the Director was a member of the Board and/or Committee.
Column B indicates the number of meetings attended during the period the Director was a member of the Board and/or Committee.
1
Issa Al Balushi was appointed as a Director on 25 January 2023.
2
In attendance only.
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Kenmare Resources plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE REPORT CONTINUED
Board activities in 2023
STRATEGIC
LINK TO STRATEGY STAKEHOLDERS CONSIDERED
• Conducted an overall review of strategy covering product market evolution,
capital projects and power requirements, valuation and market value, M&A
• Developed and reviewed Board objectives for 2023
• Received a report at every Board meeting on corporate development
opportunities and investor relations
• Reviewed management succession plans
Deliver long-life,
low-cost production
Allocate capital
efficiently
Shareholders, Lending Banks
and Employees
OPERATIONS
LINK TO STRATEGY STAKEHOLDERS CONSIDERED
• Received reports at every Board meeting from the Chief Operations Officer
on operational performance covering mining, processing, power supply,
security, shipping, human resources and community relationships
• Received an expert presentation as well as internal briefings on the
security and political situation in Mozambique
• Received updates at every meeting on the progress of development
projects such as Nataka and the WCP B upgrade
• Received a report at every Board meeting from the Marketing Manager on
product markets and customer relationships
• Reviewed power stability at Site, in particular the impact of the lightning
strike in early 2023 and associated insurance claim
• Reviewed pre-feasibility and definitive feasibility studies for the
component parts of the Nataka project
• Approved the purchase of two new dredges, the WCP A upgrade and TSF
for the development of Nataka
• Visited the proposed location for the TSF for Nataka and heard from Site
management on the mining challenges faced
Operate responsibly
Deliver long-life,
low-cost production
Shareholders, Employees,
Suppliers, Contractors and
Communities
GOVERNANCE AND CORPORATE
LINK TO STRATEGY STAKEHOLDERS CONSIDERED
• Approved the appointment of Issa Al Balushi to the Board and approved
the initiation of a search for an additional Non-Executive Director
• Received reports on progress on the renewal of the Company’s
Implementation Agreement with the Government of Mozambique
• Received and approved the report on arrangements for compliance with the
Company’s relevant obligations under Section 225 of the Companies Act 2014
• Approved the discretionary underpin for KRSP awards made to the
Executive Directors in 2023
• Approved awards under the KRSP to employees and the Executive Directors
• Considered and approved the Tender Offer
• Reviewed and approved the Payments to Governments report for 2022
• Reviewed the results of the 2022 internal Board performance review and
resulting action plan, and progressed items in that plan such as format of
Board papers, feedback and revision of disaster recovery plans
• Received updates at every Board meeting on investor relations and
assisted in preparation for the Capital Markets Day
• Approved the settlement of litigation
Operate responsibly
Shareholders, Employees,
Government and Regulators
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Board activities in 2022 continued
HEALTH AND SAFETY
LINK TO STRATEGY STAKEHOLDERS CONSIDERED
Received reports at every Board meeting from the Chief Operations Officer
on health and safety performance at the Mine and measures taken to deal
with the increased number of LTIs
Operate responsibly
Employees, Communities
FINANCE AND RISK MANAGEMENT
LINK TO STRATEGY STAKEHOLDERS CONSIDERED
• Received reports and presentations at every meeting from the Financial
Director regarding the Group’s financial performance
• Received updates on the Group refinancing and subsequently approved
the terms thereof in February 2024
• Reviewed the Group taxation
• Reviewed the Group’s cost management initiatives and capital expenditure
management
• Approved the Annual Report and Accounts for 2022 and the half-year
results to 30 June 2023
• Considered the Company’s distributable reserves in the context of
payment of dividends and the buyback of the Company’s shares
• Approved a new dividend payout range
• Reviewed the budget process and approved the Group’s 2024 budget and
operating plan
• Reviewed the principal risks and uncertainties facing the Group
• Reviewed impairment and sensitivities around the weighted average cost
of capital
• Received regular reports from the Chair of the Audit & Risk Committee
Allocate capital
efficiently
Shareholders, Lending Banks
and Governments
SUSTAINABILITY
LINK TO STRATEGY STAKEHOLDERS CONSIDERED
• Received updates from the Chief Operations Officer on environmental
management, rehabilitation of land, power and water supply
• Approved the Company’s updated Climate Strategy
• Received a presentation on Sustainable Investing
• Received a briefing on sustainability regulatory matters
• Received regular updates from the Chair of the Sustainability Committee
• Received updates from the Chief Operations Officer and Country Manager
on relations with the local community
• Approved compliance roles under the GISTM
• Visited rehabilitation areas and the Kenmare plant nursery
Operate responsibly
Communities, Government and
Regulators, Shareholders
CULTURE
LINK TO STRATEGY STAKEHOLDERS CONSIDERED
• Received regular briefings on employee and community relations
• Considered the results of the employee engagement survey undertaken in
late 2022 and initiatives to deal with bullying and sexual harassment
• Reviewed a briefing on organisational development and culture
• Received regular reports from the Chair of the Sustainability Committee
• Considered the report on workforce engagement during 2023
• Met with employees at the Moma Mine and with women from the Mtiticoma
village to discuss their relationships with, and attitude to, Kenmare
Operate responsibly
Communities, Government and
Regulators, Shareholders
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Kenmare Resources plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE REPORT CONTINUED
Site visit
The Board of Directors visited the Moma mine in December
2023. It provided an opportunity for them to meet a wide
range of staff, inspect operations, discuss project plans and
meet with various community members.
Communities
The Board visited the resettled Isoa village and saw 84 newly
constructed homes there. Elaine Dorward-King and Mette
Dobel met with women from Mtiticoma village to discuss
their business initiatives, including a kindergarten, cooking
business and fish shop, as well as healthcare and employment
with Kenmare. The positive impact of Kenmare on their
livelihoods and health was clear.
Operations and projects
The Directors visited WCP A and received a briefing on
slimes management and the potential for the use of artificial
intelligence for the management of booster pumps. They then
viewed the valley where it is proposed to build the Tailings
Storage Facility for WCP A’s operations in Nataka. WCP C’s
location provided a spectacular view of the area and the Board
was updated on the challenges faced in mining the area.
There was also a visit to WCP B and an in-depth discussion on
moving into the wetlands there and how biodiversity can be
protected. Lastly, the Board took the opportunity to fly over
the Congolone deposit to familiarise itself with the landscape.
The Board spent time in the MSP and various laboratories
and saw a new geometallurgical laboratory currently under
construction – this will enhance the Company’s ability to
test and predict the content and quality of its products.
The Directors were keen to visit the warehouse and saw the
significant improvements made there in relation to storage of
parts and equipment. At the RUPS, employees explained the
power supply to operations and also the operation of the RUPS,
which helps to maintain a constant power supply to the MSP.
Rehabilitation
The rehabilitation team has been experimenting with slimes to
improve the quality of rehabilitated soil. The Directors visited
these trial areas and the process and results to date were
explained to them. They also visited the Kenmare nursery and
noted the increase in the variety of plants and crops being
grown there since their last visit.
Employees
Mette Dobel, as the Non-Executive Director responsible for
workforce engagement, and Graham Martin, as Chair of the
Remuneration Committee, met with employees from a variety
of levels and trades. More details of their discussions are
at 109 and 126 respectively. The rest of the Board met with
the Security team to commend them on their performance
in dramatically reducing incidents of theft over the last
12 months. Before leaving Mozambique, the Board visited
the Maputo office and met with finance and IT staff there.
Throughout the visit, the Board met and engaged with
workers from all departments and levels.
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GOVERNANCE
Board oversight of culture
The Board believes that Kenmare’s strategy is supported and enabled by a unique and distinctive culture, which has been developed
and sustained over many years. This culture is founded on the Company’s values of Integrity, Commitment, Accountability, Respect and
Excellence, which are embedded at every level of the organisation through a variety of policies, forums, tools, communications and supports.
The Board does not use a singular tool for monitoring and shaping culture – instead it draws on a number of sources to understand how
employees and others feel about Kenmare and understand how this drives behaviours on a day-to-day basis. These include the following
reports, metrics and other information channels:
KENMARE’S VALUES
Integrity
Commitment
Accountability
Respect
Excellence
DIVERSITY AND INCLUSION
The Board believes that diversity and inclusion help the Company to
attract, engage and retain the best talent; adapt and respond effectively
to the changing expectations of its stakeholders; and find and innovate
solutions to business challenges, leveraging on the diverse viewpoints, skills
and experience of all employees and stakeholders. The Board-approved
Employment policy seeks to create an environment where everyone is
respected and valued. The Board places particular emphasis on promoting
local content and employment and increasing female representation in the
workforce. At year-end, nearly 16% of the Mine employees were women,
compared with 14.5% in 2022. Kenmare aims to hire local people wherever
possible and, in 2023, 97% of the workforce was Mozambican, and two-thirds
were from the Nampula province, where the Mine is located. Various initiatives
are in place, such as the Women’s Forum, to encourage the retention of female
staff and improvement in working conditions, where necessary. Levels of
female participation in the workforce are set as targets for management by
the Remuneration Committee and reported on to the Committee and Board.
WORKFORCE ENGAGEMENT
The Board believes that regular workforce engagement can greatly assist in
understanding the impact and value of culture to the business and assessing
its implementation by management. Mette Dobel has been designated as
the Non-Executive Director responsible for workforce engagement. Her
interaction with staff and feedback to the Board help the Board to assess
workforce sentiment and address issues of concern. A report from Mette
Dobel is set out on page 109. On its visit to the Mine in December, the
Board had an opportunity to meet with a wide range of staff in a dedicated
engagement session and on an informal basis to discuss life at Kenmare.
HEALTH AND SAFETY
A safe working environment is a fundamental
plank of Kenmare’s values. Kenmare’s Health and
Safety policy sets out its commitment to zero-
harm, proactive management of safety risks, and
maximising opportunities to enhance employee
well-being. Performance against these objectives
is monitored by the Board and Sustainability
Committee, used as KPIs for management
remuneration and externally audited.
EMPLOYEE ENGAGEMENT SURVEY
This helps the Board to understand how
employees feel about the Company, their
working environment and the culture. It is
undertaken every two years and the results
presented to the Sustainability Committee. It
covers areas such as job fulfilment, respect,
workload, teamwork and interaction with
managers. The last survey was completed in late
2022 and reviewed by the Board in 2023. The
results showed an employee satisfaction rating
of 83%, 14% down since the last such survey. The
Board looked at the reasons for this decrease
and the actions to address them.
VISIT TO MOMA MINE
The Board visited the Mine in December 2023. Physically meeting employees and Community members has proven to be one of the
most effective tools in assessing the culture of the organisation and gauging stakeholders’ attitudes towards Kenmare. More details
on the visit are on page 101.
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Kenmare Resources plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE REPORT CONTINUED
KENMARE MOMA DEVELOPMENT ASSOCIATION (KMAD)
The Board believes that Kenmare should be a catalyst for positive social and
economic change in the Moma Mine area. One of the ways the Company
achieves this is by supporting KMAD – a not-for-profit organisation
established in 2004 to implement development programmes in the Moma
Mine’s host communities. Its community initiatives have four key focuses
– livelihoods and economic development, healthcare development, water
and sanitation, and education development. The Kenmare Country Manager
and his team brief the Sustainability Committee on its activities and the
Committee reviews and provides input into its strategy.
SUPPLY CHAIN CODE OF CONDUCT
The supply chain is an essential part of Kenmare’s business and the
Company recognises that its suppliers, through the goods and services they
deliver in support of operations, create environmental, social and governance
impacts that Kenmare is indirectly responsible for. It is Kenmare’s vision
for its entire supply chain to share its commitments in these areas and, to
this end, the Company has put in place a Board-approved Supplier Code
of Conduct, which draws together its various corporate policies and will
help suppliers understand Kenmare’s expectations regarding sustainable
development. Suppliers may be audited or required by Kenmare to provide
information to demonstrate compliance with the code.
POLICIES
Kenmare aims to be a trusted business and support transparent disclosure,
so it can be accountable for its actions and commitments. All staff recognise
their personal and collective responsibility in upholding Kenmare’s business
integrity. The Company’s high standards are enshrined in its policies and the
laws and regulations of Ireland, the UK and Mozambique. Its policies reflect
these standards and expectations, and are approved and reviewed by the
Board and relevant Committees.
COMPANY PURPOSE
During 2023, employees at Site and corporate employees took part in
externally facilitated sessions to review the Company’s stated purpose.
Kenmare expects to finalise the review of its purpose in 2024 and
it will be tested with employees throughout Kenmare before it is adopted
and rolled out.
SUSTAINABILITY COMMITTEE
The Committee is tasked with managing health,
safety, security, social and environmental
risks, and facilitating progressive employment
practices on operating sites. With this in mind,
the Chief Operating Officer reports on health
and safety matters (workforce and community)
at every Sustainability Committee meeting. For
example, in 2023, the Committee was briefed
on all LTIs and the management response to
address the situation. As of 31 December 2023,
the team at Site achieved two million hours
without an LTI.
RISK MANAGEMENT
Managing risk, including that to the well-being of
the workforce and host communities, is an integral
part of Kenmare’s business. A comprehensive
process is in place for assessing and managing
risks associated with business and strategic
corporate decisions. Through this process,
significant risks faced by the Group are identified,
evaluated and appropriately managed. Details
of the risk management framework and the role
of the Board and its Committees are set out on
page 76.
WHISTLEBLOWING
Kenmare promotes a culture of openness and
accountability and encourages staff to report
suspected wrongdoing as soon as possible.
Concerns can be raised with a line manager,
externally with Safecall, an independent external
reporting line or with the Chair of the Audit &
Risk Committee or the General Counsel. Safecall
reports are investigated by the Internal Auditor
and reported on to the Audit & Risk Committee,
and any concerns fed back from its Chair to the
Board. Details of the reports received during
2023 are on page 121.
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Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Read more
about
Kenmare’s
unique value
proposition on
pages 2 to 3
Independence of
Non-Executive Directors
The Board has carried out an evaluation of the
independence of its Non-Executive Directors, taking
account of the relevant provisions of the Code and
whether the Non-Executive Directors identified as
independent discharge their duties in a proper and
consistently independent manner, and constructively
challenge the Executive Directors and the Board.
In January 2023, Issa Al Balushi was appointed to the
Board by African Acquisition S.à.r.l, as provided for
under the Subscription and Relationship Agreement
entered into in 2016. As a result, Issa Al Balushi is not
considered to be independent. The Board is satisfied
that each of the other current Non-Executive Directors
fulfils the independence requirements of the Code.
Andrew Webb has been Chairman of the Company since
May 2022. On his appointment as Chairman, Andrew
met the independence criteria as set out in the Code.
Senior Independent Director
Graham Martin is the Group’s Senior Independent
Director (SID). The principal role of the SID is to provide
a sounding board for the Chairman and to act as an
intermediary for other Directors and shareholders. The
SID is responsible for the appraisal of the Chairman’s
performance throughout the year. He is also available
to meet shareholders upon request, in particular if they
have concerns that cannot be resolved through the
Chairman or the Managing Director. A summary of the
role of the SID can be found at www.kenmareresources.
com/en/about-us/corporate-governance.
Directors’ Compliance Statement
The Directors have drawn up a Compliance Policy
Statement as defined in Section 225(3)(a) of the Irish
Companies Act 2014. Arrangements and structures
have been put in place that are, in the Directors’
opinion, designed to secure material compliance
with the Company’s relevant obligations. These
arrangements and structures were reviewed during the
financial year to ensure they remained appropriate and
comprehensive. The Directors’ Compliance Statement is
set out in full in the Directors’ report on page 142.
Share ownership and dealing
Details of the Directors’ interests in Kenmare shares are
set out in the Annual Report on Remuneration on page
135. The Kenmare Resources plc Dealing policy applies
to the Directors and to all employees. Under this policy,
Directors and employees may not deal in Kenmare
shares while they are in possession of inside information
about the Group. Kenmare also operates a Dealing
Code, which applies to the Directors and to employees
who are able to access restricted information about the
Group. Under the Dealing Code, Directors and relevant
employees are required to obtain clearance from the
Company before dealing in Kenmare shares and persons
discharging managerial responsibilities are prohibited
from dealing in the shares during closed periods, as
defined by the Dealing Code.
Company Secretary and legal
The Directors have access to the advice and services
of the Company Secretary who advises the Board and
Committees on governance matters. The Company’s
Articles of Association provide that the appointment
or removal of the Company Secretary is a matter for
the Board.
Kenmare’s General Counsel and Company Secretary
provide advice, guidance and support to Executive and
operational management and work closely with them to
provide training to employees. Together they provide
support on a range of matters including establishing
policies and procedures, providing compliance
training and communications, providing legal advice
on compliance and business issues, monitoring and
investigating whistleblower calls, and ensuring the
Group is informed of any changes to regulation and/
or reporting requirements. They work with the Head of
Sustainability in relation to sustainability governance
and, together with management at the Mine, review
compliance and governance matters on a Group-
wide basis. During 2023, workflows included CSRD
preparation, putting in place various IT policies and
updating the employee handbook and policies.
Directors may take independent advice in the
furtherance of their duties at the Company’s expense.
Induction and development of Directors
New Non-Executive Directors undertake a structured
induction process, which includes a series of meetings
with management, a briefing session with the General
Counsel and the Company’s corporate solicitors on
the responsibilities of a Director under Irish law and
applicable stock exchange rules, and a briefing with the
Company Secretary regarding corporate policies.
External experts may be invited to attend certain
Board or Committee meetings to address the Board
(or relevant Committee, as the case may be) on
relevant industry matters and on developments
in corporate governance, risk management and
Executive remuneration. Training and development
requirements for the Directors are discussed in the
Board performance review process and Directors
are encouraged to undertake appropriate training on
relevant matters. During 2023, management arranged
for briefings to the Board on Mozambican legal
developments, politics and security in Mozambique
and sustainable investing, and made various courses
(including a detailed one on risk management) available
to the Directors on the Kenmare E-learning platform. In
addition, all Directors have access to an online database,
which is regularly updated with relevant publications,
agreements and changes in legislation.
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Kenmare Resources plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE REPORT CONTINUED
Read more
about
Kenmare’s
business
model on
pages 24 to 25
Board performance review
2021 Board performance review
In accordance with provisions of the Code, a
performance review of the Board is carried out annually
and facilitated externally every third year. In 2021, a
comprehensive performance review of the Board and all
of its Committees was conducted by Board Excellence
Limited. A summary of the process and its findings can
be found on page 86 of the 2021 Annual Report.
2023 Board performance review
In December 2023 and early 2024, the Chair, Andrew
Webb, appraised the performance of the Board,
Committees and each of the Non-Executive Directors
and Graham Martin, the Senior Independent Director,
evaluated the performance of the Chair.
The various phases of the internal performance review
process are set out below.
The review indicated a high level of satisfaction and
found that there is good communication both within
the Board and its Committees and with management.
However, a number of focus areas to improve Board
effectiveness in 2024 have been identified. These
include changes to the ways that the Board oversees
and contributes to budgeting and capital allocation
and how it evaluates internal and external investment
opportunities.
PHASE 1 PHASE 2 PHASE 3 PHASE 4 PHASE 5
In December 2023, a
questionnaire covering
key aspects of Board
and Committee
effectiveness, including
their composition, the
content and conduct of
meetings, interaction
with management,
the effectiveness of
the Chair and the
Directors’ continuing
education process, was
made available online
to all Directors. This
was completed on an
anonymous basis to
facilitate openness in
scoring and comments.
Completed
questionnaires,
including views on
performance and
recommendations
for improvement,
were received
by the Company
Secretary in
January 2024
and an analytics
report was
provided to the
Board.
Discussions
were held by
each of the Chair
and the Senior
Independent
Director with
each of the
Directors
individually to
evaluate the
performance
of the Board
and the Chair
respectively.
Each of the
Committees
considered the
analytics report
as part of the
review of its
performance
and Terms of
Reference and
recommended
any changes
it considered
necessary to
the Board for
approval.
The Chair and
the Senior
Independent
Director reported
to the Board at
its meeting in
March 2024 on
the findings and
it was agreed
that any action
point arising
therefrom would
be considered
in development
of the Board
objectives for
2024.
Powers of the Directors
Under the Articles of Association of the Company,
the business of the Company is to be managed by
the Directors who may exercise all the powers of the
Company subject to the provisions of the Companies
Act, the Constitution of the Company and to any
directions given by resolution of a General Meeting
(not being inconsistent with the Companies Act and
the Articles of Association). The Articles of Association
permit the Directors to delegate any of their powers,
authorities and discretions to any committee provided
that a majority of the members of a committee shall be
Directors.
The Directors may also, from time to time appoint
any company, firm or person to be the attorney(s) of
the Company subject to such conditions as they may
think fit.
The Articles of Association also provide that the
Directors may establish any local or divisional boards
or agencies for managing any of the affairs of the
Company in any specified locality, either in Ireland
or elsewhere, and may delegate to any such board or
agent any of their powers, authorities and discretions
upon such terms and subject to such conditions as the
Directors may think fit.
Directors’ powers in relation to the issuing or buying
back by the Company of its shares are set out in the
Directors’ report on page 142.
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GOVERNANCE
Appointment and removal of Directors
The Articles of Association empower the Board to
appoint Directors but require such appointees to retire
and submit themselves for re-appointment at the first
Annual General Meeting following their appointment.
Under the Articles of Association, a third of the
Board must retire annually but may offer themselves for
re-election. However, in accordance with the provisions
contained in the Code, the Board has decided that all
Directors should retire annually at the Annual General
Meeting and offer themselves for re-election.
Directors may be removed by the shareholders in a
General Meeting of the Company.
Memorandum of Association and
Articles of Association
The Company’s Memorandum of Association and
Articles of Association set out the objects and powers of
the Company and may be amended by shareholders at
a General Meeting of the Company by special resolution
(requiring the resolution to be passed by 75% of the
eligible votes).
General meetings and shareholders’
rights
Under the Articles of Association, the power to manage
the business of the Company is generally delegated
to the Directors. However, the shareholders retain
the power to pass resolutions at a General Meeting
of the Company, which may give directions, not being
inconsistent with the Companies Act and the Articles of
Association, to the Directors as to the management of
the Company.
The Company must hold a General Meeting each year
as its Annual General Meeting, in addition to any other
meetings in that year. The Annual General Meeting
will be held at such time and place as the Directors
determine. All General Meetings, other than Annual
General Meetings, are called Extraordinary General
Meetings. The Directors may at any time call an
Extraordinary General Meeting. Extraordinary General
Meetings shall also be convened by the Directors on
the requisition of members holding, at the date of the
requisition, not less than 5% of the paid-up capital
carrying the right to vote at General Meetings.
No business may be transacted at any General Meeting
unless a quorum is present at the time when the
meeting proceeds to business. Three persons entitled to
attend and to vote upon the business to be transacted,
each being a member, or a proxy for a member,
constitutes a quorum.
The shareholders have the right to receive notice of
a General Meeting. In the case of an Annual General
Meeting or of a meeting for the passing of a special
resolution, 21 clear days’ notice at the least, and in any
other case 14 clear days’ notice at the least, needs to
be given in writing in the manner provided for in the
Articles to all the members (subject to any restrictions
imposed on any shares), to the Directors, the Company
Secretary and the auditors, and any other person
entitled to receive notice under the Companies Act. The
shareholders also have the right to attend, speak, vote
and ask questions at General Meetings. In accordance
with Irish company law, the Company specifies record
dates for General Meetings, by which date shareholders
must be registered in the Register of Members of
the Company to be entitled to attend. Record dates
are specified in the notes to the Notice of a General
Meeting. Shareholders may exercise their right to vote
on some, or all, of their shares by appointing a proxy
or proxies, by electronic means or in writing. The
requirements for the receipt of valid proxy forms are set
out in the notes to the notice convening the meeting. A
shareholder, or a group of shareholders, holding at least
3% of the issued share capital of the Company has the
right to put an item on the agenda of the Annual General
Meeting or to table a draft resolution for inclusion in the
agenda of a General Meeting, subject to certain timing
requirements prescribed by the Companies Act, and any
contrary provision of Irish company law.
Voting at any General Meeting is by a show of hands
unless a poll is properly demanded. On a show of hands,
every member who is present in person or by proxy has
one vote regardless of the number of shares they hold.
On a poll, every member who is present in person or by
proxy has one vote for each share they hold. A poll may
be demanded by the Chair of the meeting or by at least
three members having the right to vote at the meeting,
or by a member or members representing not less than
one-tenth of the total voting rights of all the members
having the right to vote at the meeting, or by a member
or members holding shares in the Company conferring
a right to vote at the meeting, being shares on which an
aggregate sum has been paid up equal to, and not less
than, one-tenth of the total sum paid up on all shares
conferring that right.
Deadlines for exercising voting rights
Voting rights at General Meetings of the Company are
exercised when the Chair puts the resolution at issue
to a vote of the meeting. Where a person is appointed
to vote for a shareholder as proxy, the instrument of
appointment must be received by the Company not later
than the latest time approved by the Directors.
Read more
about Board
succession on
page 111
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Kenmare Resources plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE REPORT CONTINUED
Audit, risk and internal control
Board’s approach to risk
management and internal control
The Board of Directors has responsibility for the Group’s
systems of internal control and risk management. This
involves an ongoing process of identifying, evaluating
and managing the significant risks faced by the Group
and regularly reviewing the effectiveness of the resultant
systems of internal control and risk management that
have been in place throughout the financial year and
up to the date of approval of the Annual Report and
Accounts. The Board has delegated to management the
planning and implementation of the system of internal
control throughout the Group. The system of internal
control is designed to provide reasonable, but not
absolute, assurance against material misstatement or
loss. Both it, and the risk management system, accord
with the Financial Reporting Council’s Guidance on Risk
Management, Internal Control and Related Financial and
Business Reporting (September 2014). The key elements
of the systems include the following:
The Board, in conjunction with management,
identifies the major risks faced by the Group and
determines the appropriate course of action to
manage these risks;
Risk assessment and evaluation are an integral part
of the management process throughout the Group.
Risks are identified and evaluated and appropriate
risk management strategies are implemented;
The Board maintains control and direction over
appropriate strategic, financial, organisational
and compliance issues, and has put in place an
organisational structure with defined lines of
responsibility and authority; and
Capital expenditures are controlled centrally and,
if in excess of predefined levels, are subject to
approval by the Board.
Review and effectiveness of the
risk management and internal
control systems
The Board conducted a review of the effectiveness
of the Group’s risk management and internal controls
systems, including financial, operational and compliance
controls, and as part of this it obtained a report from the
internal auditor. In the course of this review the Board
did not identify, nor was it advised of, any failings or
weaknesses that it determined to be significant.
Compliance policies and training
Kenmare insists on honesty, integrity and fairness in
all aspects of its business and expects the highest
standards of professionalism and ethical conduct to be
maintained in all its activities. The Group has detailed
policies and procedures in place on a range of relevant
areas such as climate, employment, health and safety,
environment, human rights and business ethics, which
had recently been updated and consolidated (where
appropriate). Depending on the nature of their role,
Directors and employees of the Group receive more
detailed training on those policies both as part of their
induction process and Kenmare’s ongoing training
programme. An e-Learning programme, which includes
topics such as insider dealing, risk, market abuse
regulation and whistleblowing, has been put in place
and update briefings are provided when there are any
material changes in law or regulation.
Whistleblowing
Kenmare promotes a culture of openness and
accountability and encourages staff to report suspected
wrongdoing as soon as possible, in the knowledge that
their concerns will be taken seriously and investigated
as appropriate, and that their confidentiality will be
protected wherever possible. Concerns can be raised
with a line manager, externally with Safecall (an
independent external reporting line) or with the Chair
of the Audit & Risk Committee or the General Counsel.
Whistleblowers may raise concerns anonymously if
they wish. Kenmare’s policies make clear that retaliation
against any employee who raises a genuine concern
is prohibited. Where concerns are raised, they are
investigated in an appropriate and independent manner.
All whistleblowing incidents are reviewed by the Internal
Auditor and General Counsel and formally investigated
by the Internal Auditor who reports findings to the Audit
& Risk Committee. The Audit & Risk Committee reviews
these reports and outcomes and provides updates to
the Board.
Stakeholder engagement
Kenmare has adopted a Stakeholder Engagement Policy
(available on its website at www.kenmareresources.
com/sustainability/policies) pursuant to which it will,
inter alia:
Engage openly and honestly with its key
stakeholders using appropriate communication tools
and in a regular and timely manner, having regard to
commercial sensitivities; and
Consult with and listen to all its stakeholders
transparently and resolve disagreements.
More details on stakeholder engagement can be found
on pages 22 and 23.
Community engagement
Kenmare values highly its strong relationship with its
host communities. Its stakeholder engagement plan is
updated annually and reflects the changing dynamics in
the relationship between the Mine and the community.
Kenmare works with local communities through the
Kenmare Moma Development Association (KMAD). Read
more on page 64 or read the KMAD Annual Report 2023
at: www.kenmareresources.com/en/sustainability/kmad.
The Board visited the Moma Mine in December 2023.
More details on the visit are on page 101.
Read more
about the
Audit & Risk
Committee on
pages 118 to
123
107
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Read more
about the
Directors’ visit
to Moma on
page 101
Workforce engagement
The Board has designated Mette Dobel as the
Non-Executive Director responsible for engagement
with the Group’s workforce. In December 2023, Mette
Dobel met with employees at the Moma Mine. She had
subsequent video calls with staff in Maputo, London and
Dublin. More details on workforce engagement are on
page 109.
Shareholder engagement
Communications with shareholders are given high
priority. Annual Reports and Accounts are sent to
shareholders in accordance with their instructions.
Major transactions and production guidance are also
notified to the market, and the Company’s website
www.kenmareresources.com, provides the full text of all
announcements. The website also contains a significant
amount of published material such as Annual Reports,
half-year results, governance documents, share price
information and investor presentations. In addition,
the Company maintains several social media accounts
on platforms such as X, LinkedIn and Facebook, which
are regularly updated with operational, financial and
sustainability-focused news.
Shareholder presentations are made at the time of
release of the Company’s full-year and half-year
results, following which the Executive Directors and
Investor Relations team provide feedback on the views
of shareholders and analysts to the Board. Where
necessary, the Board and Committee Chairs engage
with shareholders on specific topics and, where
relevant, provide feedback to other Directors. The Chair
and Senior Independent Director are also available
throughout the year to meet shareholders on request.
The Board is kept informed of the views of shareholders
through the Executive Directors’ attendance at investor
presentations and results presentations. Relevant
feedback from such meetings, investor relations reports
and brokers’ notes are provided to the entire Board on a
regular basis. The Board also receives briefings from the
Company’s brokers.
Capital Markets days and Mine visits for major
shareholders are held periodically. A Capital Markets
Day was held in London in April 2023 and featured
presentations by the Executive Directors and
management. These are available on the Company’s
website.
On an ongoing basis, the Investor Relations team
acts as a focal point for contact with investors and
provides information and deals with queries as they
arise. The Company Secretary engages annually with
proxy advisers in advance of the Company’s AGM. The
Company’s AGM affords shareholders the opportunity to
question the Chair and the Board.
OIA relationship agreement
OIA (formerly the State General Reserve Fund (“SGRF”))
currently does not fall within the definition of controlling
shareholder under the Listing Rules as it holds less
than 30% of Kenmare’s equity. However, the Company
and African Acquisition S.à.r.l., the vehicle through
which SGRF invested in the Company, have entered
into arrangements equivalent to those that would be
expected to be in place between a listed company
and its controlling shareholder. This is to ensure the
independence of the Company from that shareholder. In
particular, the Company entered into a subscription and
relationship agreement, dated 18 June 2016, with African
Acquisition S.à.r.l. that, among other things, sets forth
the relevant arrangements.
Substantial holdings
The Company is not owned or controlled directly or
indirectly by any government or by any corporation
or by any other natural or legal person severally or
jointly. The major shareholders do not have any special
voting rights. Details of the substantial holdings as at
31 December 2023 and 27 March 2024 are provided on
page 143.
Stock exchange listings
Kenmare, which is incorporated in Ireland and subject to
Irish company law, has a premium listing on the London
Stock Exchange (LSE) and is subject to the Listing
Rules of the UK Listing Authority.
Kenmare has a secondary listing on Euronext Dublin.
For this reason, the Company is not subject to the same
ongoing listing requirements as those which would
apply to an Irish company with a primary listing on
Euronext Dublin, including the requirement that certain
transactions require the approval of shareholders. For
further information, shareholders should consult their
own financial adviser.
AGM update
The AGM is an opportunity for the Executive Directors
to deliver presentations on the business and for
shareholders, both institutional and private, to question
the Board directly. Generally, all Directors attend the
AGM and are available to meet with shareholders. Notice
of the AGM, proxy statement and the Annual Report and
financial statements are sent to shareholders at least 21
days before the meeting. A separate resolution will be
proposed at the AGM on each separate issue including
a particular resolution relating to the adoption of the
Directors’ report and Auditor’s report and the financial
statements. Details of the proxy votes for and against
each resolution, together with details of votes withheld,
are announced after the result of the votes by hand.
These details are published on the Company’s website
following the conclusion of the AGM. At the AGM held
on 11 May 2023, there were no material votes cast
against any resolutions.
108
Kenmare Resources plc Annual Report and Accounts 2023
CORPORATE GOVERNANCE REPORT CONTINUED
Workforce engagement
“This year’s engagement with our employees across various
locations has provided invaluable insights, reinforcing our
commitment to a positive, inclusive, and forward-looking
workplace culture.
Throughout the interactions, a collective sense of pride in
being part of Kenmare was evident. Employees appreciate the
open dialogue and low hierarchy, which fosters a culture of
belonging and inclusivity. Our focus on safety over production
was highlighted as a distinctive Kenmare trait, setting us apart
in the mining industry and reinforcing our commitment to
employee well-being and community engagement.
The autonomy employees have in influencing their work,
coupled with a trust-based leadership approach, has been
highly commended. I have heard a general appreciation of
the continued investment in leadership training, which has
positively impacted management and employee relations,
enhancing the overall quality of leadership within the
Company.
Our efforts in localising our workforce and increasing diversity
continue to be positively received. These initiatives not only
bring us closer to the communities we operate in but also
enhance our organisational culture, making Kenmare a more
inclusive and diverse place to work.
The feedback from the 2022 workforce engagement survey
has been instrumental in identifying areas for improvement.
While we have a highly engaged workforce, issues like bullying
and sexual harassment, though minimal, are being taken
seriously. The management’s commitment to resolving these
issues and enhancing the overall employee experience is
unwavering.
A theme across our interactions was the need for innovative
work methods and embracing new technologies. Modernising
our systems and encouraging innovative thinking are areas
we’re keen to develop, ensuring Kenmare stays at the forefront
of efficiency and productivity.
The insights gathered from our diverse workforce are a guiding
light for our continuous improvement. As we evolve, these
perspectives help us identify our strengths and areas where
we can enhance our work environment. The Board is dedicated
to ensuring that Kenmare remains a responsible, engaging, and
forward-thinking organisation, where safety, employee welfare,
and inclusive growth are at the heart of everything we do. Our
journey this year has been one of meaningful engagement
and learning, and we are committed to using these insights
to foster a workplace where every employee feels valued and
empowered to contribute to our collective success.”
Mette Dobel
DESIGNATED WORKFORCE ENGAGEMENT DIRECTOR
3 April 2024
109
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
DEIRDRE SOMERS
Committee member
ELAINE DORWARD-KING
Committee member
“ KENMARE RECOGNISES
THE BENEFITS OF
DIVERSITY AND ITS
OBJECTIVE TO ACHIEVE
GREATER DIVERSITY AT
BOARD, COMMITTEE AND
SENIOR MANAGEMENT
LEVEL, AS WELL AS
ACROSS THE WIDER
WORKFORCE”
Graham Martin
CHAIR OF THE NOMINATION COMMITTEE
Membership and meetings
The Nomination Committee consists of Elaine
Dorward-King, Deirdre Somers and me, all of
whom are Independent Non-Executive Directors.
There were four Committee meetings during
2023. These were attended by all Committee
members.
Committee membership
INDEPENDENT
DATE OF APPOINTMENT
TO COMMITTEE
Graham Martin
Chair Yes 25/05/2017
Elaine
Dorward-King
Member Yes 13/05/2020
Deirdre Somers
Member Yes 31/12/2021
Principal responsibilities of the
Committee
• Regularly reviewing the structure, size,
composition and length of service of the Board
and making recommendations to the Board
with regards to changes considered advisable;
• Assessing the effectiveness and performance
of the Board and Committees including
consideration of the balance of skills,
knowledge, independence, diversity and
experience of the Board and Committees, and
other factors relevant to its effectiveness;
• Considering succession planning for Directors
and other Senior Executives, taking into
account the challenges and opportunities
facing the Group, what skills and expertise are
needed in the future, and ensuring a diverse
pipeline for succession;
• Identifying, and nominating for the approval
of the Board, candidates for appointment as
Directors and ensuring that there is a formal,
rigorous and transparent procedure for
appointment;
• Considering the results of the Board
performance review process that relate to the
composition of the Board, its diversity and how
effectively the members of the Board work
together; and
• Periodically reviewing the time input required
from a Non-Executive Director.
The standard terms of contract for Non-Executive
Directors are available on request from the
Company Secretary, at the Company’s registered
office during normal business hours, and at the
Annual General Meeting (for 15 minutes prior to
the meeting and during the meeting).
See the Committee’s Terms of Reference at www.
kenmareresources.com/en/about-us/corporate-
governance/nomination-committee
110
Kenmare Resources plc Annual Report and Accounts 2023
NOMINATION
COMMITTEE REPORT
STAGE 1
The Committee approves
a role specification
based on skills and
experience required
and the Diversity and
Inclusion policy.
STAGE 2
An independent search
agent is appointed.
STAGE 3
The Committee
considers a longlist
and then a shortlist of
potential candidates and
holds interviews.
STAGE 4
The Committee identifies
its preferred candidate.
STAGE 5
The preferred candidate
is invited to meet with all
Board members and due
diligence is carried out.
STAGE 6
The Committee makes a
recommendation to the
Board for consideration.
STAGE 7
The appointment is
approved by the Board
and announced.
STAGE 8
The induction process is
commenced.
Process for Board appointments
Dear shareholders
I am pleased to present the report of the Nomination
Committee for 2023. During the year, the Committee
met four times and the main areas of focus were the
skills and experience of existing Board members,
external appointments and time commitment, diversity
on the Board, succession planning, the search for a
new Non-Executive Director, the composition of the
Board’s Committees, and the Board performance review.
This report describes how the Committee has fulfilled
its responsibilities during the year under its Terms of
Reference and under the relevant requirements of the
UK Corporate Governance Code 2018.
Board succession and changes this year
On 25 January 2023, Issa AL Balushi joined the Board,
having been nominated by African Acquisition S.à.r.l.
which is controlled by Oman Investment Authority (OIA)
and is Kenmare’s largest investor. Issa is a Manager in
Economic Diversification Investments at OIA and has
over 10 years of experience in the financial industry and
investment. He was elected as a Director at the AGM in
May 2023. The process employed by the Company for
Board appointments other than following a nomination
by OIA is set out below.
Training
Directors have access to an online training platform,
which allows them to update and refresh their
knowledge in their own time. We also invite external
experts to present to the Board on specific topics of
interest from time to time. During 2023, tailored updates
on Mozambican legal developments, politics and
security in Mozambique, sustainable investing and risk
were provided by Kenmare to the Directors.
Executive Director succession planning
A priority of the Board and the Committee over the past
number of years has been enhancing our long-term
succession planning for the Executive Directors and this
is typically at least an annual agenda item at meetings
of the Committee and the Board.
As announced on 15 March 2024, Michael Carvill will
step down as Managing Director and from the Board
later this year. Subject to re-appointment at the
Company’s Annual General Meeting on 10 May 2024, it
is expected that Michael will remain on the Board and
in his executive role until the Company’s Interim Results
in August. Following this, and to support an orderly
transition process, Michael will continue to be available
to the Company in a consultancy capacity until at least
the end of 2024. The Committee has initiated a process
to find Michael’s successor and will consider both
internal and external candidates for the role.
Management succession
Each year the Committee considers the leadership
needs of the Group and succession planning for other
senior management roles.
During the year, the Committee received updates
from management on succession planning activities
throughout the Group. The Committee, and the wider
Board, also engages with the potential pipeline for
succession as members of the senior management team
present at Board and strategy meetings.
111
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Read more
about our
Committees on
page 96
Committee composition
Mette Dobel was designated by the Board as the Non-
Executive responsible for workforce engagement on 10
May 2023 and she joined the Remuneration Committee
with effect from 1 September 2023. Save for this, there
were no changes in the composition of Committees or in
Board roles.
Diversity and inclusivity
Kenmare recognises the benefits of diversity and
its objective to achieve greater diversity at Board,
Committee and senior management level, as well as
across the wider workforce. This is supported by the
Group’s Employment policy, which can be found at
www.kenmareresources.com/en/sustainability/policies.
The Board keeps this policy under review to ensure
that it is effective in achieving diversity in its broadest
sense, having regard to experience, age, sex and gender,
religious beliefs, sexual orientation, race, ethnicity,
disability, nationality, educational, socio-economic or
professional background and culture but bearing in
mind the need for an appropriately sized Board. We
instruct any search consultants we engage to consider
this in sourcing candidates. We recognise that diversity
aids implementation of our strategy by providing the
Board with different ways to tackle an issue, healthy
debate and challenge of the Board and the Executive
team as well as making Kenmare more adaptable to
changes in our environment.
While the Board will always seek to appoint candidates
on merit against objective criteria, greater diversity is
actively considered when making Board appointments
and will continue to be given careful consideration as
part of the process of Board refreshment and renewal.
Most of our Board appointments in recent years
have been female and we achieved our target of 33%
female representation on the Board in 2022. Given the
proportion of new appointees to the Board, we felt that
a certain adjustment period, while Directors settled into
their roles, was appropriate and did not wish to enlarge
the Board. However, in 2023, following a review by the
Committee of new and pending regulatory requirements
regarding gender and ethnic diversity, as well as the
skills, qualifications and experience of the existing Board,
the Committee believed it was an appropriate time to
initiate a search for an additional female Non-Executive
Director and the Board supported its recommendation.
The Committee engaged Korn Ferry to carry out such a
search. Korn Ferry is an independent executive search
firm, with no connections to the Company or any of the
Directors. We are currently in the process of reviewing a
longlist of potential candidates. This process will be co-
ordinated with the search for a new Managing Director in
order to ensure that the Board has the appropriate mix
of skills and, following its successful conclusion, women
will represent 40% of our Board.
Gender and ethnic breakdown of the Board and
the Executive Committee as at 31 December 2023
are set out in the tables below. There has been no
NUMBER
OF BOARD
MEMBERS
PERCENTAGE
OF THE BOARD
NUMBER OF
SENIOR POSITIONS
ON THE BOARD
(CEO, CFO, SID AND
CHAIR)
NUMBER ON
EXECUTIVE
COMMITTEE
PERCENTAGE
OF EXECUTIVE
COMMITTEE
Men 6 67 4 9 82
Women 3 33 – 2 18
Not specified/prefer not to say – – – – –
NUMBER
OF BOARD
MEMBERS
PERCENTAGE
OF THE BOARD
NUMBER OF
SENIOR POSITIONS
ON THE BOARD
(CEO, CFO, SID AND
CHAIR)
NUMBER ON
EXECUTIVE
COMMITTEE
PERCENTAGE
OF EXECUTIVE
COMMITTEE
White British or other White
(including minority-white
groups) 8 89 4 9 82
Mixed/multiple ethnic groups – – – 1 9
Asian/Asian British – – – 1 9
Black/African/Caribbean/Black
British – – – – –
Other ethnic group, including
Arab 1 11 – – –
Not specified/prefer not to say – – – – –
33.3%
Female Board representation
112
Kenmare Resources plc Annual Report and Accounts 2023
NOMINATION COMMITTEE REPORT CONTINUED
Read more
about the
recent Board
performance
review on page
105
change in the data since that date. While we met the
target in the Listing Rules for ethnic diversity, the
targets for women on the Board and in senior Board
positions were not met, for the reasons previously
set out. We have, however, made significant strides
in our search for an additional female Non-Executive
Director as noted. In addition, the Board’s current
intention is to appoint one of our female Directors as
Senior Independent Director following my retirement
in 2025. Lastly, although they are not applicable to us,
we support and currently meet the Board gender and
diversity recommendations of the Hampton-Alexander
review and Parker review respectively.
The Board and Executive Committee are committed to
increasing female representation in senior leadership
positions across the Group. We are making progress
with this objective, with 18.2% of the Executive
Committee being female and a further seven women in
their direct reports.
The Board and management continue to focus on
evolving and implementing strategies for recruiting and
developing colleagues in ways that promote diversity
and inclusion such as a KPI regarding the percentage
of women in the workforce and working with current
female employees to improve hiring and retention
rates. Further details of our approach to diversity in
the workforce can be found on page 63 and in the
Sustainability Report.
The data contained in the tables on the opposite page
was collected on the basis of self-reporting by the
individuals concerned who were asked to indicate, by
ticking the relevant box, which (if any) of the categories
they identified as.
Additional Directorships
Non-Executive Directors are expected to devote such
time as is necessary for the proper performance of their
duties. This will include attendance at regular Board and
Committee meetings, the AGM and any extraordinary
general meetings, Board dinners, occasional site visits
and meetings with shareholders. In addition, they are
required to consider all relevant papers prior to each
meeting. They are required to obtain the agreement of
the Board before accepting additional commitments
that might affect the time they are able to devote to
their role at Kenmare.
During the year, Elaine Dorward-King was appointed
as Non-Executive Director of Nevada Copper Corp, a
Canadian copper mining company listed on the Toronto
Stock Exchange and Mette Dobel was appointed as
a Non-Executive Director of M&J Recycling ApS, a
private Danish recycling company. In early 2024, the
Board approved the appointment of Andrew Webb as
a Non-Executive Director and Chair designate of Ecora
Resources plc, a royalty company listed on the London
Stock Exchange. In all cases, the Chair and, in the case
of Andrew, the Board, was satisfied with each Director’s
capacity to take on such additional role without any
impact on their work with Kenmare and that there was
no resulting conflict of interest.
In 2023, the Committee reviewed the external
appointments held by all Directors and their time
commitment to Kenmare and found these to be
satisfactory.
Board effectiveness
In accordance with provisions of the Code, a Board
performance review is carried out annually and facilitated
externally every third year. An external performance
review was conducted by Board Excellence in 2021
and this is summarised on page 86 of the 2021 Annual
Report. An internal Board performance review was
carried out in 2023 by Andrew Webb, as Chair, and by
myself in respect of Andrew’s performance. The review
is summarised on page 105 of the Corporate Governance
section and incorporated into this report by reference.
The review indicated a high level of satisfaction with
the composition, performance and effectiveness of
the Board, its Chair and Committees and found that
there are good communications both within the Board/
Committees and with management. However, some areas
for improvement were identified such as strengthening
the processes by which the Board oversees budgeting
and capital allocation planning, and how we evaluate
internal and external investment opportunities. These
will be dealt with throughout the year.
Committee effectiveness and priorities
for 2024
The Committee’s performance and effectiveness was
also considered as part of the recent internal Board
performance review. I am pleased to say that the
Committee was found to be working effectively and
efficiently.
Priorities for 2024 include the search for a new
Managing Director, concluding the current search for an
additional Non-Executive Director, and a renewed focus
on Executive and senior management succession.
Acknowledgements
I would like to thank the Committee members for their
commitment and input to the work of the Committee in
2023, and Chelita Healy, our Company Secretary, for her
invaluable support to the Committee.
Graham Martin
CHAIR OF THE NOMINATION COMMITTEE
3 April 2024
16%
Female workforce at Moma
NUMBER
OF BOARD
MEMBERS
PERCENTAGE
OF THE BOARD
NUMBER OF
SENIOR POSITIONS
ON THE BOARD
(CEO, CFO, SID AND
CHAIR)
NUMBER ON
EXECUTIVE
COMMITTEE
PERCENTAGE
OF EXECUTIVE
COMMITTEE
Men 6 67 4 9 82
Women 3 33 – 2 18
Not specified/prefer not to say – – – – –
NUMBER
OF BOARD
MEMBERS
PERCENTAGE
OF THE BOARD
NUMBER OF
SENIOR POSITIONS
ON THE BOARD
(CEO, CFO, SID AND
CHAIR)
NUMBER ON
EXECUTIVE
COMMITTEE
PERCENTAGE
OF EXECUTIVE
COMMITTEE
White British or other White
(including minority-white
groups) 8 89 4 9 82
Mixed/multiple ethnic groups – – – 1 9
Asian/Asian British – – – 1 9
Black/African/Caribbean/Black
British – – – – –
Other ethnic group, including
Arab 1 11 – – –
Not specified/prefer not to say – – – – –
113
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Membership and meetings
The Sustainability Committee consists of Clever
Fonseca, Mette Dobel, and myself as Chair, all of
whom are Independent Non-Executive Directors.
The Committee met four times in 2023 and details
of members’ attendance thereat are set out on
page 98.
Committee membership
INDEPENDENT
DATE OF APPOINTMENT
TO COMMITTEE
Elaine
Dorward-King
Chair Yes 4/11/2019
Clever Fonseca
Member Yes 2/10/2019
Mette Dobel
Member Yes 31/12/2022
Principal responsibilities
of the Committee
• To oversee the management of health, safety,
security, social and environmental risks, and
facilitate progressive employment practices;
• To ensure fair land access, compensation, and
timely rehabilitation arrangements;
• Advocate for socio-economic development on
behalf of our host communities, particularly
relating to livelihoods, healthcare, education,
and water and sanitation;
• Incorporate management of climate change and
other sustainability issues into Group plans,
with external reporting where appropriate to
recognised international norms; and
• Monitor socio-political developments within the
region and Mozambique.
See the Committee’s Terms of Reference at
www.kenmareresources.com/en/about-
us/corporategovernance/sustainability-committee
METTE DOBEL
Committee member
CLEVER FONSECA
Committee member
“THREE MILLION HOURS
WORKED WITHOUT
A LOST TIME INJURY
IS A SIGNIFICANT
ACHIEVEMENT, POSSIBLE
THANKS TO THE
DEDICATION OF LEADERS
AND ALL EMPLOYEES,
WHICH I COMMEND THEM
FOR AND ENCOURAGE
THEM TO STRIVE FOR
EACH AND EVERY DAY.”
Elaine Dorward-King
CHAIR OF THE SUSTAINABILITY COMMITTEE
114
Kenmare Resources plc Annual Report and Accounts 2023
SUSTAINABILITY
COMMITTEE REPORT
Read more
about Health &
Safety on page
62
Dear shareholders
I am pleased to present the Sustainability Committee’s
2023 report. During the year, the Committee met
four times, three times in person and once by video
conference. We were also fortunate to visit the Moma
Mine and communities in December. The main areas
of focus for our meetings are set out on the following
pages. This report describes how the Committee has
fulfilled its responsibilities during the year under its
Terms of Reference and under the relevant requirements
of the UK Corporate Governance Code 2018.
2023 sustainability performance
The Company experienced an upward trend in Lost Time
Injuries (LTIs) up until the third quarter, at which point,
Kenmare’s leadership and management teams intervened
with several safety down times to reinforce the message
that safety must always be prioritised over production.
Increased attention was given to safety issues in all
planned and unplanned activities that followed, and the
team was able to arrest the declining performance and
ended the year strongly, with zero LTIs in Q4. The rolling
12-month Lost Time Injury Frequency Rate was 0.15 LTIs
per 200,000 hours worked for 2023 and the team passed
three million hours worked without an LTI in late February
2024. I commend the team on this turnaround and for
their resilience and commitment to safety. The Moma
Mine again retained its NOSA five-star accreditation,
which is aligned to ISO 45001 and ISO14001 International
Standards, for its health, safety and environmental
performance for an eighth consecutive year.
Kenmare continued to work on a Climate Transition Plan
that aims to deliver a rate and pace of decarbonisation
required by scientific consensus to limit average
global temperature increases to 1.5
o
C The Company
uses 100% hydroelectric grid electrical power, which
represents 54% of its overall power consumption, so
further rapid decarbonisation will be a challenge. The
Committee reviewed proposals on decarbonisation
projects, including the sourcing and blending of
biodiesel into operations. A key intervention, the
Rotary Uninterruptible Power Supply (RUPS), operated
for a full year in 2023, significantly contributing to
power stability and a year-on-year carbon emissions
reduction of 14%. We are focused on both delivering the
short-term emissions reduction target of 12% by 2024
(relative to a 2021 baseline) and setting an ambitious
but achievable ambition for 2030, to pave the way to
net zero Scope 1 and 2 emissions by 2040. You can read
more about our decarbonisation and energy challenges
and opportunities in our climate disclosures on pages
66 to 70.
Kenmare’s commitment to local socio-economic
development continued. We grew the proportion of
local procurement operating expenditure by 3.2% and
agreed six new contracts with local suppliers. In addition,
the Kenmare Moma Development Association (KMAD)
continues to support micro-businesses and encourages
their inclusion in Kenmare’s supply chain. KMAD provided
interest free loans and business support to 22 micro-
ventures in 2023. Successful businesses included mobile
banking, suppliers of vegetables to the Mine’s catering
service, sewing, motor repair shop and community
nurseries, all of which have repaid or are on track to repay
their loans, demonstrating their ongoing sustainability.
We continued to make steady progress on increasing
the representation of women in our business and, by
the end of 2022, 16% of the workforce at the Mine was
female (2022: 14.5%) with women making up 40% of
the senior management there (2022: 25%). The Mine’s
workforce comprised 97% Mozambican employees, 2%
above regulatory requirements. Of the management
roles, 85% at Moma (supervisor and above) are held by
Mozambicans, including the General Manager.
Committee effectiveness and priorities
for 2024
An external evaluation of the Committee’s performance
and effectiveness is conducted every three years.
In the intervening years, this evaluation is carried
out internally. The 2023 evaluation found that
the Committee operates effectively. In 2024, the
Committee’s priorities include reviewing the draft
Biodiversity Offset Management Plan in advance of
submission to the government, approving a Climate
Transition Plan with interim decarbonisation targets,
reviewing progress to further alignment with GISTM
and overseeing the first year of adherence to the EU’s
Corporate Sustainability Reporting Directive (CSRD).
Conclusion
I would like to thank the Committee members for their
commitment and input to the work of the Committee
during 2023. I would also like to thank Michael Carvill,
Managing Director, for his continued leadership, Ben
Baxter, Higino Jamisse and his management teams for
their efforts on our environmental and supply chain
programmes, Anna Brog for her guidance, and Gareth
Clifton and Regina Macuacua for their dedication to
strong community relations.
Elaine Dorward-King
CHAIR OF THE SUSTAINABILITY COMMITTEE
3 April 2024
3 million
Hours worked without a
Lost Time Injury by late
February 2024
115
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Areas of focus in 2023
AREA OF FOCUS SUSTAINABILITY COMMITTEE ACTION
ESG strategy, targets
and reporting
• Reviewed and approved Executives’ and site 2024 ESG targets and progress against 2023 ESG targets
• Reviewed regular updates on reporting requirements
Safe and engaged
workforce
• Received updates at every meeting on health and safety of employees including background and
response to any Lost Time Injuries (LTIs)
• Received a briefing on the employee health and wellness programme
• Reviewed health and safety culture and plans for improvement
• Reviewed the findings of the Employee Engagement and Leadership survey and ongoing leadership
training
• Briefed on initiatives to uphold the Company’s zero tolerance of bullying and sexual harassment
• Reviewed progress on the security strategy
Thriving communities • Reviewed plans for supplier capacity building and programmes to increase local expenditure
• Discussed local procurement in 2022 and plans for its improvement in 2023
• Received updates at every meeting on community relations
A healthy natural
environment
• Received an update on the implementation of the Company’s water strategy and progress against
water reuse targets
• Oversaw research into biofuels options
• Participated in a workshop on biodiversity with an expert speaker and approved the Nature Positive
commitments proposed by management
• Approved draft Climate Transition plan and standards against which to measure emission reductions
• Approved the Company becoming a signatory to the Global Tailings Management Institute (GTMI) and
approved Global Industry Standard on Tailings Management (GISTM) compliance roles
Trusted business • Reviewed procedures for supply chain due diligence and audit
• Reviewed updates on all Sustainability policies
• Received an update on the political landscape in Mozambique
Terms of reference • Considered its Terms of Reference to ensure they remain appropriate for the Group’s needs. The
Terms of Reference are available on the Kenmare website at www.kenmareresources.com/en/about-us/
corporategovernance/sustainability-committee
116
Kenmare Resources plc Annual Report and Accounts 2023
SUSTAINABILITY COMMITTEE REPORT CONTINUED
GOVERNANCE
117
Kenmare Resources plc Annual Report and Accounts 2023
CLEVER FONSECA
Committee member
ELAINE DORWARD-KING
Committee member
“AS THE COMMITTEE’S
ROLE IN ESG OVERSIGHT
DEVELOPS, WE
HAVE CONSIDERED
HOW WE CAN WORK
OPTIMALLY WITH
THE SUSTAINABILITY
COMMITTEE TO ENSURE
COORDINATION AND
CONSISTENCY”
Deirdre Somers
CHAIR OF THE AUDIT &
RISK COMMITTEE
Kenmare Resources plc Annual Report and Accounts 2023
118
Membership and meetings
The Audit & Risk Committee consists of Clever Fonseca,
Elaine Dorward-King and me, as Chair, all of whom are
Independent Non-Executive Directors. As outlined
in the Directors’ biographical details, members bring
considerable accounting, corporate financial and mining
industry experience to the work of the Committee. I am a
Chartered Accountant and have been designated by the
Board as the Committee’s financial expert. Details of the
skills and experience of the Committee members are set
out on pages 92 and 93. Details of members’ attendance
at Committee meetings are set out on page 98.
Committee membership
INDEPENDENT
DATE OF APPOINTMENT
TO COMMITTEE
Deirdre Somers
Chair Yes 19 August 2020
Clever Fonseca
Member Yes 13 May 2020
Elaine Dorward-King
Member Yes 31 December 2021
Principal responsibilities of the Committee
• Monitoring the integrity of the Group’s financial
statements and any formal announcements relating to the
Group’s financial performance and reviewing significant
financial reporting judgements contained in them;
• Assessing whether the Annual Report and Accounts,
taken as a whole, is fair, balanced and understandable,
and provides the information necessary for
shareholders to assess the Group’s performance,
business model and strategy;
• Reviewing non-financial disclosures - such as sustainability
and climate, and the related external assurance processes
• Monitoring the external auditor’s independence and
objectivity and, in particular, the appropriateness of the
provision of non-audit services;
• Monitoring the effectiveness of the Group’s internal
control and risk management systems;
• Considering the appropriate risk appetite for the Group
and overseeing the current and prospective risks faced
by the Group and its strategy and mitigations in relation
to such risks;
• Ensuring the risk management function is properly
resourced, with adequate information rights and
sufficient independence such that it is free from
management interference;
• Making recommendations for the Board to put to
shareholders for their approval in General Meetings
regarding the appointment, remuneration and terms of
engagement of the external auditor;
• Monitoring the effectiveness of the internal audit
function; and
• Reporting to the Board, identifying any matters in respect
of which it considers that action or improvement is needed,
and making recommendations as to the steps to be taken.
The Chair of the Audit & Risk Committee attends the
Annual General Meeting to answer questions on the report
on the Committee’s activities and matters within the scope
of the Committee’s responsibilities.
See the Committee’s Terms of Reference at
www.kenmareresources.com/en/about-us/corporate-
governance/audit-risk-committee.
118
Kenmare Resources plc Annual Report and Accounts 2023
AUDIT & RISK
COMMITTEE REPORT
Dear shareholders
I am pleased to present the report of the Audit & Risk
Committee for 2023. During the year, the Committee met
six times and the main areas of focus were as set out
on page 122. This report describes how the Committee
has fulfilled its responsibilities during the year under its
Terms of Reference and under the relevant requirements
of the UK Corporate Governance Code 2018.
External audit
Independence and non-audit services
The Committee is responsible for ensuring that the
external auditor is independent and for implementing
appropriate safeguards where the external auditor
also provides non-audit services to the Group. The
Committee closely monitors the level of audit and non-
audit services that audit firms provide to the Group.
The Committee has adopted a policy on the provision of
non-audit services by the external auditor on the basis
that they may provide such services only where the
engagement will not compromise their audit objectivity
and independence, they have the understanding of the
Group necessary to provide the service, and they are
considered to be the most appropriate to carry out the
work. All non-audit services provided by audit firms
must be approved by the Committee.
KPMG is the Group’s external auditor and has confirmed
to the Committee that it is independent from the
Group under the requirements of the Irish Auditing and
Accounting Supervisory Authority’s (IAASA) Ethical
Standards for Auditors. The Committee reviews and
approves any appointment of an individual, within
three years of having previously been employed by the
current external auditor, to a senior managerial position
in the Group. No such appointments were made in 2023.
The Company Secretary, the Financial Director and,
from time to time, the external audit lead partner, attend
meetings at the invitation of the Committee. Twice each
year, the Committee and the external auditor discuss,
without management present, matters relating to its
remit and any issues.
KPMG was approved as auditor by the Company at the
AGM in May 2019 and began its engagement in July
2019. The lead audit partner is Keith Watt who took over
the role in 2021, having been involved as audit partner
since 2019. Keith will be replaced as lead audit partner in
2024 in accordance with ethical standards.
In 2023, KPMG provided a number of audit services and
non-audit services. The non-audit services consisted
mainly of audit-related assurance concerning the review
of the half-yearly financial statements and Mozambican
tax compliance services and other related matters.
The Committee is satisfied that the external auditor’s
knowledge of the Group was an important factor in
choosing it to provide these services. Under the EU fee
cap rules, non-audit services are not permitted to exceed
a ratio of 70% of the average annual audit fee for the
preceding three-year period - that limit has not been
breached. The fee paid to KPMG in 2023 in respect of
audit services and non-audit services was $242,000 and
$101,000 respectively, a ratio of 2.39:1.
KPMG has stated that it does not consider that these
fees create a self-interest threat since the level of fees
is not significant to the firm as a whole. The Committee
is, therefore, satisfied that the non-audit work did not
compromise KPMG’s independence or objectivity and
that it was in the interests of the Group to retain KPMG
for those services. As a result, the Company did not
invite third parties to tender for these services. The
Committee did not request the auditors to look at any
specific areas in 2023. Details of the amounts paid to
KPMG during the year for audit and other services
are set out in Note 7 to the consolidated financial
statements on page 172.
Effectiveness and quality
The Committee, on behalf of the Board, is responsible
for the relationship with the external auditor and for
monitoring the effectiveness and quality of the external
audit process. The Committee’s primary means of
assessing the effectiveness and quality of the external
audit process is by monitoring performance against the
agreed audit plan. In addition, we consider the following:
The experience and knowledge of the external
audit team;
The quality of presentations to the Board and
Committee;
The technical insights provided relevant to
the Group;
Demonstration of a clear understanding of the
Group’s business and key risks; and
The results of post-audit interviews with
management and the Committee Chair.
Based on the above, the Committee is satisfied with
the effectiveness of the external auditor for 2023 and
the quality of its audit and is satisfied that the external
auditor demonstrated professional scepticism and
challenged management’s assumptions, where necessary.
Read more
about the 2023
financial
results on
pages 52 to 55
119
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Financial reporting and significant
financial judgements
A key responsibility of the Committee is to consider the
significant areas of complexity, management judgement
and estimation that have been applied in the preparation
of the financial statements. The Committee has
reviewed the suitability of the accounting policies, which
have been adopted and whether management has made
appropriate judgements and disclosures. The table on
page 123 sets out the significant matters considered by
the Committee in relation to the financial statements
for the year ended 31 December 2023. After reviewing
the presentations and reporting from management and
consulting where necessary with KPMG, the Committee
is satisfied that the Annual Report and Financial
Statements appropriately addresses the critical
judgements and key estimates, both in respect of the
amounts reported and the disclosures.
Fair, balanced and understandable
report
At the request of the Board, the Committee considered
whether, in its opinion, the 2023 Annual Report and
Financial Statements, taken as a whole, is fair, balanced and
understandable and whether it provides the information
necessary for shareholders to assess the Group’s position
and performance, business model and strategy.
Following its review, we believe that the 2023 Annual
Report and Financial Statements is representative of the
year and presents a fair, balanced and understandable
overview, providing the necessary information
for shareholders to assess the Group’s position,
performance, business model and strategy.
As part of this process, we considered the robust process in place to create the Annual Report and Financial Statements and the Committee:
STAGE 1
Reviewed a draft of the whole
Annual Report and Financial
Statements in advance of giving
its final opinion and ahead of
final approval by the Board. The
Committee was provided with
all relevant information, received
briefings from management on how
specific issues are managed and
challenged management as required.
STAGE 2
Received confirmation that each
Committee had signed off on each
of its respective Committee reports
and reviewed other sections for
which it has responsibility under its
Terms of Reference.
STAGE 3
Was provided with a confirmation
by management that it was
not aware of any material
misstatements in the financial
statements made intentionally to
achieve a particular presentation.
STAGE 4
Was provided with findings from
KPMG that it had found no material
audit misstatements that would
impact the unqualified audit opinion
during the course of its work.
120
Kenmare Resources plc Annual Report and Accounts 2023
AUDIT & RISK COMMITTEE REPORT CONTINUED
Read more
about
Kenmare’s
products on
pages 16 and
17
Risk management
The Group has identified and documented critical risks to
the business, including key operational risks and related
controls in its risk register. The Group’s risk identification
and management process, register and mitigants
are reviewed and updated annually. The Group’s key
operational risks are reviewed and updated quarterly.
Following a review of the Group risk register by senior
management, the principal risks identified for the Group
and their mitigations are submitted to the Audit & Risk
Committee and Board for review and approval. These
risks are included in the principal risks and uncertainties
facing the Group as set out on pages 76 to 85. As part of
the internal audit function, controls identified in the risk
register are tested to ensure they are operating effectively.
The Committee assessed the Group’s risk management
and internal control framework in line with the FRC
Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting and reviewed
the audit and review summary reports from the external
auditor. The Committee, having assessed the above
information, is satisfied that the internal control and risk
management framework is operating effectively and has
reported this opinion to the Board.
Internal audit
The Internal Auditor prepares an internal audit plan
for each financial year proposing the audit areas to be
covered and the timeframe for each. This is presented
to the Committee for approval. The Internal Auditor
updates the Committee on progress at regular intervals
and presents reports to each Committee meeting.
The Committee can question the Internal Auditor
on the contents of the reports and the processes
employed by him in investigations. These reports are
considered by the Committee and material matters and
recommendations are then reported to the Board.
The Committee is responsible for monitoring and
reviewing the operation and effectiveness of the Internal
Audit function including its focus, plans, activities and
resources. To fulfil its duties during 2023, the Committee:
Reviewed and approved the internal audit
annual plan;
Considered, and was satisfied that, the
competencies, experience of and level of resources
available to the Internal Auditor were adequate to
achieve the proposed plan;
Considered the role and effectiveness of internal
audit in the overall context of the Group’s risk
management framework and was satisfied that the
function has appropriate standing within the Group;
Ensured that the Internal Auditor had access to the
Chair of the Board, if required; and
Ensured co-ordination between internal audit and
the external auditor to maximise the benefits from
clear communication and co-ordinated activities.
On the basis of the above, the Committee concluded
that, for 2023, the internal audit function was performing
well and is satisfied that the quality, experience and
expertise of the function is appropriate for the Group.
Whistleblowing
The Company has a Whistleblowing policy in place and
a third-party service provider is engaged to provide a
confidential 24/7 whistleblowing service (“Safecall”)
available to all stakeholders to report any wrongdoing
in the workplace. The service does not replace the
internal processes within the organisation but seeks
to provide an alternative for those employees who, for
any reason, do not wish to use the internal processes.
The Audit & Risk Committee Chair is also positioned to
receive written complaints in confidence on accounting,
risk issues, internal controls, auditing issues and related
matters for reporting to the Audit & Risk Committee.
Eight Safecall reports were received in 2023. All have
been investigated by the Internal Auditor in accordance
with approved procedures. These concerned non-
payment of wages by a contractor (three), unfair or
corrupt recruitment practices (two), harassment, unfair
treatment of a supplier and treatment of a contractor’s
employees. As regards the complaint of non-payment
of wages by a contractor, the Company liaised with the
contractor in question who, the whistleblower confirmed,
subsequently paid all arrears of wages. Kenmare
emphasised the seriousness of the issue and the need to
treat employees properly and ensure they are paid. The
report alleging unfair treatment of a supplier entity was
referred to the appropriate supply chain management
channels where it was substantiated and remedied. The
remaining four reports were found to be unfounded or
could not be investigated due to lack of information/
cooperation from the whistleblower.
$50m
2023 dividend distribution
121
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Areas of focus in 2023
AREA OF FOCUS AUDIT & RISK COMMITTEE ACTION
Financial
reporting
• Reviewed the 2022 Annual Report and Accounts in March 2023, the 2023 Half-Yearly
Financial Report issued in August 2023 and the regulatory announcements relating to these
statements before submitting them to the Board of Directors with a recommendation to approve.
• Undertook a review of the 2022 Annual Report and Accounts and confirmed to the Board
that it was the opinion of the Committee that, taken as a whole, the 2022 Annual Report and
Accounts were fair, balanced and understandable and provided the information necessary for
shareholders to assess the Group’s position and performance, business model and strategy.
• Assessed the appropriateness of the Group’s accounting policies, including the key
estimates, judgements and disclosures made by management.
Distributable
reserves
• Reviewed the Company’s distributable reserves to ensure these were sufficient to pay
the 2022 final dividend, the 2023 interim dividend and to buy back shares pursuant to the
Tender Offer.
Risk
management
and internal
control
• Reviewed the Group’s risk management and internal control framework (including procedures
for detecting fraud) established for identifying, evaluating and managing key risks.
• The principal risks facing the Group were reviewed and considered and eight specific strategic
risks identified by the Committee as key to the outcome for the year were monitored quarterly.
• Reviewed the Company’s risk appetite statement.
• Received and considered risk review updates.
• Received updates on insurance renewals.
• Reviewed the Anti-Bribery and Whistleblower policies to ensure they remained appropriate
for the Group’s business.
• Approved and monitored progress against a set of Treasury policy KPIs.
Internal audit • Reviewed the internal audit charter and was satisfied that it remained appropriate for the Group.
• Approved the internal audit plan for 2023 and received quarterly updates on progress in this
regard as well as in relation to ad hoc work undertaken during the year.
• Received quarterly reports from the internal auditor on Safecall reports received and
resulting investigations.
• Reviewed internal audit reports during the year covering warehouse management, revenue
management, certain HR procedures, crop compensation, suppliers and liability for contractors.
• Reviewed the effectiveness of the internal audit function.
External audit • Agreed the audit plan of the external auditor, KPMG, for their audit of the 2023 Annual Report
and Accounts and their review of the 2023 Half-Yearly Financial Report.
• Reviewed the independence, objectivity and effectiveness of the external audit process
including the safeguards designed to avoid the possibility that the auditor’s objectivity and
independence could be compromised. The Committee is satisfied that the appropriate policy
is in place in respect of services provided by external auditors.
• Approved the non-audit services provided by KPMG to the Group in 2023.
• Post-completion of the 2022 audit and 2023 half-year review, in conjunction with KPMG, review
meetings were held with senior finance management, and it was confirmed by both parties that
no issues had arisen during the audit or review process.
• Met the external auditor without management present to discuss matters relating to the
external audit process.
• Satisfied itself that the succession plan and execution for audit partner rotation in 2024 was
effective.
Climate change • Reviewed the proposed disclosures in the 2022 Annual Report against the recommendations
of the Task Force on Climate-related Financial disclosures (TCFD) and EU Taxonomy.
• Considered the impact of climate change on amounts reported in the financial statements
including the potential financial impact of the physical and transitional risks and opportunities
identified in accordance with the recommendations of the TCFD.
• Received briefings on its role in ESG reporting and on the financial assessment of climate risk.
• Considered how the Committee could work optimally with the Sustainability Committee to
ensure coordination and consistency.
Committee
affairs
• Amended its Terms of Reference to provide for review of non-financial disclosures. The Terms
of Reference are available on the Kenmare website at www.kenmareresources.com/en/about-
us/corporate-governance/audit-risk-committee.
• Reviewed the Committee’s performance.
Read more
about capital
investments
on page 55
122
Kenmare Resources plc Annual Report and Accounts 2023
AUDIT & RISK COMMITTEE REPORT CONTINUED
Read more
about tax on
page 54
AREA OF FOCUS AUDIT & RISK COMMITTEE ACTION
Other • Reviewed the principles and assumptions of our impairment model from first principles and
monitored the Company’s impairment position regularly to ensure all appropriate factors
were taken into account.
• Requested management to conduct a review of the budget process with an emphasis on
identifying areas for cost optimisation and discussed outcomes.
• Reviewed local procurement processes and statistics and local crop compensation.
• Received updates on the status of the Group’s cyber-security, its external review and the
workplan to optimal mitigation of risk.
• Monitored progress on the renewal of the Implementation Agreement with the Government
of Mozambique
• Established a dashboard of treasury metrics for regular monitoring
• Received feedback on a visit from the Mozambican Tax Authority to the Mine and the status
of our tax position in Mozambique.
Estimates and judgements
The Committee reviewed in detail the following areas
of significant judgement, complexity and estimation
in connection with the 2023 financial statements. The
Committee considered the report from the external
auditor on the audit work undertaken and conclusions
reached as set out in its audit report on pages 149
to 155. The Committee is satisfied that in all of these
matters, the accounting treatment complies with
relevant IFRS, and none gave rise to disagreement
between management, the external auditors or the
Committee.
AREA OF JUDGEMENT AUDIT & RISK COMMITTEE CONSIDERATIONS
Impairment
of property,
plant and equipment
• The Committee discussed the Group’s impairment process with both management
and KPMG.
• The Committee reviewed management’s impairment testing methodology and
process, including key judgements and assumptions. The Committee found the
process to be robust and was satisfied with the appropriateness of assumptions
and the consistency with the approach in prior years.
Revenue recognition • The Committee gained comfort over revenue recognition through discussions
with management in relation to the operation of key financial controls within the
Revenue Process in order to prevent and detect material misstatements. In addition,
the Committee gained an understanding of the substantive audit work performed
by KPMG. As a result of this, the Committee is satisfied that there are appropriate
controls and processes in place across the Group to ensure the completeness and
accuracy of revenue.
Going Concern and
Viability Statements
• The Committee reviewed the Going Concern and Viability Statements including the
underlying methodology, process and assumptions and recommended to the Board
that it approve the Going Concern and Viability Statements.
Other matters • The Committee considered, and is satisfied with, a number of other judgements
and estimates that have been made by management, including provisioning
for tax matters, the Mine closure and Mine rehabilitation provision, climate and
sustainability reporting, considerations of the impact of climate change on amounts
reported in the financial statements and the carrying amounts of the Parent
Company’s investments in subsidiary undertakings.
Audit & Risk Committee effectiveness and priorities for 2024
As outlined in the Corporate Governance report, during
2023 there was an internal review of the performance
and effectiveness of the Board and of its Committees.
I am pleased to confirm that the Chair found that the
Committee is working effectively and efficiently. The
Committee has identified the following key risks for
particular focus in 2024: progress on renewal of the
Implementation Agreement with the Mozambican
Government; continuity of power supply to Moma; cyber
security and pricing and customer concentration.
The Committee will also review our forecasting
processes and methodologies with a view to identifying
any opportunities for improvement. The Committee
would like to thank KPMG for their work on the 2023
financial statements. I would also like to thank my fellow
Committee members for their commitment and input to
the work of the Committee during 2023 and the financial
team for their assistance, guidance and support.
Deirdre Somers
CHAIR OF THE AUDIT & RISK COMMITTEE
3 April 2024
123
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
“OUR STAFF HAVE THE
OPPORTUNITY TO SHARE
THE BENEFITS FROM THE
SUCCESS OF THE GROUP.”
Graham Martin
CHAIR OF THE
REMUNERATION COMMITTEE
DEIRDRE SOMERS
Committee member
CLEVER FONSECA
Committee member
Dear shareholders
On behalf of the Board, I am very pleased to present the
Remuneration Committee’s report for 2023 on Directors’
remuneration.
This report is divided into two sections:
• This statement, which provides a summary of the year
under review and, together with the Annual Report
on remuneration, describes how the Committee has
fulfilled its responsibilities during the year under
its Terms of Reference and under the relevant
requirements of the UK Corporate Governance Code
2018; and
• The Annual Report on Remuneration, which provides
details of the remuneration earned by the Directors
in the year ended 31 December 2023 and how the
remuneration policy will operate for the year ending
31 December 2024.
The Directors’ remuneration policy was approved by
shareholders at the Annual General Meeting held on
11 May 2023 and applies for three years from that
date. Details of the vote in this regard are on page
139. The policy is set out in full on pages 135 to 145
of the 2022 Annual Report and on our website at
www.kenmareresources.com/en/about-us/corporate-
governance/remuneration-committee.
Summary of the work of the
Committee in 2023
A substantial part of the work of the Committee in
each year relates to the setting of the corporate
key performance indicators (KPIs) for the year,
performance against which is reflected not only in the
Executive Directors’ bonus scheme, but also forms a
part (generally ranging from 20–50%) of the bonus
entitlement of all our corporate staff and all the more
senior staff at the Mine. The Committee monitors
performance on a quarterly basis and the outcome is
regularly communicated, as appropriate, to the Directors
and other affected staff.
As in previous years, the performance criteria
set by the Committee for 2023 reflected a mix of
quantitative targets and qualitative targets and were
set at stretching levels for the maximum award. The
quantitative targets for 2023 comprised 80% (2022:
77%) of the maximum 100% opportunity and the
qualitative targets 20% (2022: 23%). The quantitative
targets covered metrics reflecting mineral production,
financial results and environmental, social and
governance (ESG) targets. The qualitative targets
included matters such as project execution, the Group’s
long-term mining strategy, corporate vision and values
and each Executive Director’s personal leadership.
METTE DOBEL
Committee member
METTE DOBEL
Committee member
124
Kenmare Resources plc Annual Report and Accounts 2023
REMUNERATION
COMMITTEE REPORT
Other aspects of the Committee’s work in 2023 included:
• assessing the outcome of the key performance
indicators (KPIs) under the Executive Directors’
bonus scheme for 2022, and agreeing some
modifications to those metrics for the application of
the scheme in 2023;
• reviewing benchmarking reports prepared by PwC
on the salaries, benefits and fees of the Executive
Directors, the Chief Operating Officer, the Company
Secretary, and the Chairman and setting their levels;
• reviewing and discussing with the Executive Directors
the remuneration of the Executive Committee and
senior Mine management;
• agreeing the amount of the annual award to the
Executive Directors under the Group’s long-term
share plan, the Kenmare Restricted Share Plan
(KRSP), the performance indicators to be considered
under the performance underpin and the annual
KRSP awards for other employees within the
Committee’s remit;
• a summary of performance in 2022 in the context of
the performance underpin for review at the end of the
relevant three-year period;
• applying the discretionary underpin to the 2020 KRSP
awards and determining that such awards should be
reduced by 5%;
• reviewing the remuneration and benefits of
the Executive Directors in the context of the
remuneration of the Group’s workforce as a whole.
We received presentations from management on
the remuneration structure for workers at the Mine
and our Dublin, London, and Beijing-based staff and
we satisfied ourselves that our staff receive pay
and benefits that are benchmarked appropriately,
take into account local employment regulations and
conditions as well as seniority, and afford our staff the
opportunity to share in the benefits from the success
of the Group. The Committee also notes that there
is no discrimination between our male and female
workers in their pay and benefits for similar jobs; and
• a presentation from PwC with an update on current
remuneration matters with particular focus on
a review of the 2023 AGM season and investor
feedback on remuneration issues.
Performance and reward for 2023
Under the Directors’ remuneration policy, the Executive
Directors receive a base salary (which, apart from
inflationary adjustments, has not been increased since
2010), pension contributions in line with market levels
and the Irish workforce, certain other benefits, an award
of shares under the KRSP, and the opportunity to earn
a bonus depending on the outcome of the remuneration
KPIs. In 2023, the Directors’ remuneration policy
operated in line with the intentions set out in the 2022
Annual Report on Remuneration.
As noted by the Chairman and the Managing Director
in their respective reports, Kenmare faced a number of
challenges in 2023, both internal and external. Despite
this, we delivered another year of robust financial results
and strong shareholder distributions.
These results, along with the Committee’s assessment
of performance against the qualitative targets, (all of
which are set out in more detail on pages 132 to 133),
were reflected in a general corporate scorecard outcome
for the year of 38.15%. The maximum opportunity for
Executive Directors for 2023 was 100% of base salary,
and this scorecard outcome therefore corresponds to
a cash bonus of 38.15% of salary for Michael Carvill and
Tom Hickey. The Committee considers this outcome
a fair reflection of corporate performance for the year
against stretching targets and the respective individual
performances of the Directors.
The KRSP awards granted on 28 April 2021 are
due to vest on 28 April 2024. Vesting is subject to
continued employment and an underpin based on the
Remuneration Committee’s judgement of Company
and individual performance over the three-year vesting
period. In advance of the vesting, the Committee has
conducted an initial assessment of the underpin and
provisionally determined that a reduction to the vesting
of 5% should be made to the awards. The Committee
will confirm the final vesting level in April 2024, with any
changes outlined in next year’s remuneration report.
More details on the underpin and the Committee’s
assessment are on page 134.
The KRSP awards granted in May 2020 vested in May
2023. Vesting was subject to continued employment and
an underpin based on the Remuneration Committee’s
judgement of Company and individual performance over
the three-year vesting period. The Committee determined
that a reduction to the vesting of 5% should be made to
the awards, confirming its provisional assessment, which
was reported in the 2022 Annual Report.
The Committee confirms that no malus and clawback
provisions were used during the year.
Read more
about
performance
targets on
pages 132 to
133
38.15%
2023 scorecard outcome
125
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Read more
about share
awards on
page 135
Directors’ remuneration policy
The current Directors’ remuneration policy was
approved by the Company’s shareholders at the 2023
AGM with 97.07% of votes in favour.
Full details of the policy are on page 135 to 145 of the
2022 Annual Report and are incorporated into this
Report by reference.
Directors’ remuneration for 2024
Management has agreed 4.6% salary increases for
corporate staff to mitigate current inflationary pressure.
In this context, the Remuneration Committee approved
an increase of 4% for the Executive Directors. Our bonus
scheme and KRSP will continue to operate in 2024 in
broadly the same way as they did in 2023.
Workforce engagement on
remuneration matters
As well as the management presentations on the
remuneration benefits of our worldwide staff, which
are noted above, I had an opportunity when visiting
the Mine in December to join Mette Dobel in engaging
with some senior Mine staff as noted more fully in
her commentary on page 109. In those discussions,
I explained the role and responsibilities of the
Remuneration Committee, in particular in setting the
salaries and benefits of the Executive Directors and how
they align with the approach for the wider workforce.
I discussed our desire to ensure that Executive pay is
aligned in its short, medium and long-term structure
with our culture and values and with the incentives and
reward available to all our staff and, along with Mette,
I took questions regarding employment conditions.
In the wider context, management engaged with the
workforce during the year in relation to performance
reviews, salaries, bonus outcomes (which reflect both
personal and corporate performance), and awards made
under the KRSP.
The Committee is particularly pleased that the KRSP
has been cascaded further down the organisation and
is now part of the remuneration package of around 350
staff at the Mine. This year will see the first large-scale
vesting of awards for Mine staff and we look forward to
reviewing the results.
Shareholder dialogue
Throughout the year we take every opportunity when
engaging with our shareholders to invite them to raise
any concerns or give any observations on Executive
remuneration, even when Executive remuneration is
not the specific purpose of the meeting. No specific
concerns were raised by our shareholders in the
course of 2023 and any observations that were made
were either taken into account in the determination of
outcomes in 2023 or in the new three-year remuneration
policy approved at the 2023 AGM.
Conclusion
The Committee continues to believe that the current
Directors’ remuneration policy with its blend of short,
medium and long-term aspects remains appropriate for
the Group and in our view clearly aligns the interests
of the Executives with those of the shareholders. It is
relatively simple and easily understandable; we believe
it is motivating and it also allows sufficient discretion to
the Committee to take account of all relevant matters
affecting the Group or its performance in the year. In
addition, it gives discretion to the Committee to look
back over each three-year period in determining the
ultimate KRSP vesting outcomes.
As ever, I am very grateful for the support and guidance
given to me throughout the year by my fellow members
of the Remuneration Committee and for the support
given to the Committee by Chelita Healy, the Company
Secretary.
Shareholders’ views on Executive remuneration are
very important to the Board. Should you have any
questions, comments or feedback on remuneration
matters at Kenmare, I would be very pleased to hear
from you. I can be reached via the Company Secretary
at chealy@kenmareresources.com.
I hope you will vote in support of the remuneration
report at the forthcoming AGM.
Graham Martin
CHAIR OF THE REMUNERATION COMMITTEE
3 April 2024
97.07%
Approval of
remuneration policy
126
Kenmare Resources plc Annual Report and Accounts 2023
REMUNERATION COMMITTEE REPORT CONTINUED
GOVERNANCE
127
Kenmare Resources plc Annual Report and Accounts 2023
RESPONSIBILITIES OF THE COMMITTEE
The role of the Committee is to assist the Board to fulfil its responsibility to ensure that:
• Remuneration policy and practices of the Group are designed to support strategy and promote long-term sustainable success
(including environmental, social and governance (“ESG”) objectives), reward fairly and responsibly, with a clear link to corporate
and individual performance and having regard to statutory and regulatory requirements; and
• Executive remuneration is aligned to Group purpose and values and linked to delivery of the Group’s long-term strategy.
The primary responsibilities of the Committee are to:
• Determine and agree with the Board the Group’s policy on Executive remuneration;
• Within the terms of the agreed policy, determine the total individual remuneration package of the Chair, Executive Directors, Chief
Operating Officer, Company Secretary and such other members of the senior Executive management as it is designated to consider;
• Review workforce remuneration, related policies and the alignment of incentives and rewards with culture; and
• Oversee the preparation of the Annual Report on remuneration.
See the Committee’s Terms of Reference at www.kenmareresources.com/en/about-us/corporate-governance/remuneration-committee
The Committee gives full consideration to legal and regulatory requirements, to the principles and provisions of the 2018 UK Corporate
Governance Code (“the Code”) and to related guidance. The Committee also seeks to ensure that risk is properly considered in the
setting of the remuneration policy, by ensuring that targets are appropriately stretching but do not lead to the taking of excessive risk.
The Committee reviews remuneration and related policies applicable to the wider workforce, ensuring that this is taken into account
when setting the policy for Executive remuneration. The aim across the Group is to provide a reward package that is aligned to
shareholders’ interests, supports the achievement of the Company’s annual and strategic objectives (including climate targets, where
relevant), is competitive against the appropriate market and is consistent with our focus on performance and our core values. This means:
• base salaries are set in line with the relevant market recognising the individual’s skill, knowledge, experience levels and
contribution to the role;
• high performance and exceptional contribution are recognised through in-year incentives;
• packages for leadership roles have an increased emphasis on longer-term share-based reward;
• employees are provided with competitive post-retirement benefits in line with practices applicable in relevant jurisdictions; and
• access to a competitive and cost-effective package of other benefits as part of the total reward offering.
The Company Secretary acts as Secretary to the Committee. The Managing Director and Financial Director may be invited to attend
meetings of the Committee, except when their own remuneration is being discussed. No Director is involved in the consideration of
their own remuneration.
The Remuneration Committee seeks independent advice when necessary from external remuneration consultants. In 2019, the
Committee conducted a competitive tender process following which PwC, which has no other connection with the Group, Company
or the Directors, were retained as independent external remuneration advisors. Since then, the Committee has renewed their
appointment annually. PwC is paid a fixed fee for a fixed scope of work and charges fees on a time and materials basis for work
outside of the agreed scope. During the year ended 31 December 2023, the total fees payable to PwC in respect of these services was
£60,000 (2022: £50,000). PwC is a member of the Remuneration Consultants Group and a signatory of that Group’s Code of Practice
for remuneration consultants. The Committee reviews the services and advice provided by PwC each year and is satisfied that the
advice it receives is independent and objective.
MEMBERSHIP AND MEETINGS COMMITTEE MEMBERSHIP
The Remuneration Committee consists of Deirdre
Somers, Clever Fonseca, Mette Dobel and Graham
Martin, as Chair. All Committee members are
Independent Non-Executive Directors. Biographical
details for each of the Committee members and a
description of their respective skills, expertise and
experience are set out on pages 92 and 93.
The Committee formally met five times during the
year but there were also a number of less formal
communications throughout the year on remuneration
issues between members of the Committee and
with the Executive Directors. Details of members’
attendance at meetings are set out on page 98.
INDEPENDENT
DATE OF APPOINTMENT
TO COMMITTEE
Graham Martin
Chair Yes 14/10/2016
Deirdre Somers
Member Yes 13/05/2021
Clever Fonseca
Member Yes 31/12/2021
Mette Dobel
Member Yes 01/09/2023
128
Kenmare Resources plc Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION
Consideration of employment conditions
outside the Group
The Committee reviews the remuneration of the Executive
Directors in light of the remuneration of the executive directors of
other appropriate quoted companies and, in the course of 2023,
considered benchmarking reports prepared by PwC in relation to
the same.
Implementation of the Directors’
remuneration policy
In implementing the current remuneration policy and developing
the new policy, the Remuneration Committee considered the
following factors set out in the Code:
• Clarity and simplicity – We believe that the remuneration
package for our Executive Directors is clear and transparent,
in particular the KRSP is a simple structure, which cascades,
where appropriate, down the organisation. The KRSP has a
simple structure with all awards vesting after three years,
subject to a further two-year holding period. Details of
engagement with the workforce on Directors’ remuneration are
set out on page 126.
• Risk – The Remuneration Committee has a number of tools
at its disposal to ensure that reputational and other risks are
identified and mitigated. These include malus and clawback
provisions in respect of both the annual bonus and the KRSP,
the use of a minimum share price from the time of the 2016
capital raise when determining KRSP awards to the Managing
Director and the discretionary underpin on the vesting of
KRSP awards. For example, in 2023, the Committee reduced
the number of shares vesting under the 2020 KRSP award
by 5% following its assessment of individual and Company
performance over the three-year vesting period, in accordance
with the underpin. Furthermore, the Remuneration Committee
has the discretion to amend the formulaic outcome of the
annual bonus if the Committee believes this does not reflect
the true underlying performance of the Group or the experience
of shareholders or if it wishes to avoid “windfall gains” in the
future. When determining the outcomes of the 2023 bonus,
the Committee considered these factors and determined that
the formulaic outcome was appropriate in light of the Group’s
performance.
• Predictability and proportionality – A range of potential
remuneration outcomes under the policy can be calculated
including a share price appreciation scenario. This enables
shareholders to assess the impact of performance outcomes
and share price appreciation on the value of remuneration
for individual Directors. The 2023 bonus outcome reflected
the Group’s overall performance including ESG outcomes and
progress in the long-term mining strategy.
• Alignment to culture – The discretionary underpin assessment
ensures that the vesting level of KRSP awards takes into
account the overall business performance over the relevant
three-year period, including non-financial factors such as
environmental, social and governance considerations, which are
at the heart of our culture, values and strategy.
Directors’ remuneration (audited)
The following tables set out the remuneration for Directors for the year ended 31 December 2023 and the prior year. The base salaries
increased by 7% in 2023 reflecting an inflation adjustment.
MICHAEL CARVILL TOM HICKEY
2
TONY MCCLUSKEY
6
EXECUTIVE DIRECTORS’
REMUNERATION
1
2023
$’000
2023
%
2022
$’000
2022
%
2023
$’000
2023
%
2022
$’000
2022
%
2023
$’000
2023
%
2022
$’000
2022
%
Fixed pay
Basic salary 679 618 448 110 – 313
Benefits 7 7 5 1 – 3
Pension 68 62 45 11 – 31
Total fixed pay 754 46% 687 38% 498 74% 122 71% – – 347 69%
Variable pay –
Bonus
3
259 295 171 51 – 153
Long-term incentives –
– Kenmare Restricted
Share Plan (KRSP)
4,5
644 837 – – –
Total variable pay 903 54% 1,132 62% 171 26% 51 29% – 153 31%
Total single figure 1,657 1,819 669 173 – – 500
1
The underlying currency of the Executive Directors’ emoluments is Euros. The annual basic salary of Michael Carvill is €628,146 (2022: €587,052) and of Tom Hickey is
€414,553 (2022: €387,443). This disclosure forms an integral part of the financial statements.
2
Tom Hickey was appointed as Financial Director of the Company on 26 September 2022.
3
The 2023 performance outcome of each of Michael Carvill and Tom Hickey is 38.15%. Under the Policy, any bonus in excess of 50% of salary is paid in nil-cost share options
granted under the KRSP which vest after three years – as the outcome for 2023 is below this level, the full award will be paid in cash.
4
The value of the KRSP awards for 2023 reflects the awards granted in 2021 and is calculated based on an average share price of the last three months of 2023 of £3.98
and taking into account the expected reduction in vesting of 5% as a result of the performance underpin. See page 134 for more details. The vesting date for the awards is 28
April 2024 and the Committee will confirm the final vesting level at that point.
5
The value of the KRSP awards for 2022 has been recalculated based on the share price on the vesting date, 13 May 2023, of £4.48 and taking into account the reduction in
vesting of 5% as a result of the performance underpin.
6
Tony McCluskey resigned as a Director on 26 September 2022
129
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
BASIC FEE
COMMITTEE CHAIR AND
MEMBERSHIP FEE
SENIOR INDEPENDENT
DIRECTOR FEE AUDITED TOTAL
NON-EXECUTIVE
DIRECTORS’
REMUNERATION
1,2,3
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
2023
$’000
2022
$’000
Issa Al Balushi
4
65 – – – – – 65 –
Mette Dobel 69 63 9 – – – 78 63
Elaine Dorward-King 69 63 32 29 – – 101 92
Clever Fonseca 69 63 21 19 – – 90 82
Graham Martin 69 63 30 34 11 10 110 107
Steven McTiernan – 88 – – – – – 88
Sameer Oundhakar – 63 – – – – – 63
Deirdre Somers 69 63 35 31 – – 104 94
Andrew Webb 237 155
5
– – – – 237 155
Total 647 621 127 113 11 10 785 744
1
The fees set out in the table above relate to the period of the directorship.
2
The Non-Executive Directors’ remuneration is 100% fixed. In 2023, it was agreed to increase all Non-Executive Directors’ fees by 7% to reflect inflation. The underlying
currency of the fees is Euros.
3
This disclosure forms an integral part of the financial statements.
4
Issa Al Balushi was appointed as Director of the Company on 25 January 2023.
5
Andrew Webb became Chair on 26 May 2022 and received fees in his capacity as such for eight months of 2022.
AUDITED TOTAL
TOTAL DIRECTORS’ REMUNERATION
2023
$’000
2022
$’000
Executive Directors
Salary 1,127 1,041
Benefits 12 11
Bonus 430 499
Pension 113 104
Kenmare Restricted Share Plan (KRSP) 644 837
Total Executive Directors' remuneration 2,326 2,492
Non-Executive Directors
Fees 785 744
Total remuneration 3,111 3,236
Executive and Non-Executive Directors’ remuneration and fees for
services as Directors provided to the Company and the entities
controlled by the Company are $2.3 million (2022: $2.4 million)
and $0.8 million (2022: $0.7 million) respectively. These figures
have been calculated based on the requirements of the UK’s
Large and Medium-sized Companies and Groups (Accounts and
Report) Regulations 2008 as amended in 2013, 2018 and 2019 (the
“Regulations”), to which the Company has regard.
2023 annual bonus award (audited)
The performance metrics for the 2023 annual bonus award sought
to deliver continuous and stretching progress in relation to
operational performance, cost efficiency and capital expenditure
management, health and safety initiatives, and corporate
objectives. The maximum opportunity under the annual bonus
award for 2023 was 100% of base salary for the Managing Director
and Financial Director.
130
Kenmare Resources plc Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION CONTINUED
GOVERNANCE
131
Kenmare Resources plc Annual Report and Accounts 2023
Performance targets and outcomes for the 2023 financial year were as follows:
PERFORMANCE NEEDED FOR PAY OUT AT
2023 ANNUAL
BONUS
OUTCOME WEIGHTING %
THRESHOLD
(25% OF
MAXIMUM VESTS)
TARGET
(50% OF
MAXIMUM VESTS)
STRETCH
(100% OF
MAXIMUM VESTS)
PERFORMANCE
ACHIEVED
PROPORTION OF
ELEMENT
2023
%
Operational Ilmenite production (tonnes) 16.0 1,050,000 1,080,000 1,150,000 986,000 0.0 0.00
Zircon (standard and special)
production (tonnes)
6.0 51,000 54,000 57,000 51,000 26.0 1.56
Other (tonnes) 3.0 45,000 47,000 50,000 54,000 100.0 3.00
Financial EBITDA ($m) 15.0 216.0 254.0 292.0 220.3 27.8 4.17
Production cash costs ($m) 10.0 228.0 218.0 208.0 226.3 29.3 2.93
Average share price in December 2023
(including dividends paid in 2023)
(£ per share)
5.0 4.68 5.10 5.53 4.41 0.0 0.00
Safe and
engaged
workforce
Lost Time Injury Frequency Rate
(LTIFR)
10.0 LTIFR >20% reduction relative to three-year rolling average The LTIFR increased by 25% relative to the three-year rolling average,
therefore this KPI was not achieved.
0.15 0.0 0.00
A healthy,
natural
environment
Climate / Decarbonisation 10.0 On track to deliver 12% emissions reduction by 2024, by
achieving 9% in 2023 with plan for additional 3% in 2024
A 14% reduction in Scope 1 emissions relative to 2022 was delivered in 2023. Diesel consumption
is forecast to increase in 2024, however, mitigation programmes were initiated in 2023 to ensure
the 12% emissions reduction, relative to the 2021 baseline is delivered.
100.0 10.00
Thriving
communities
Increase local spend (opex) - excl
electricity & diesel
2.5 4% increased year-on-year spend in Mozambican spend
(excluding electricity and diesel)
A 3.2% increase in operational expenditure was delivered as well as six new contracts with local
suppliers.
100.0 2.50
Trusted
business
Compliance with Supplier Code of
Conduct
2.5 80% compliance with audits against Kenmare’s Supplier
Code of Conduct, via sustainability questionnaire.
84% compliance with Kenmare’s Supplier Code of Conduct was achieved. 100.0 2.50
Project
execution
Development projects progress 10.0 WCP A Nataka projects progressed through DFS, key
execution phases approved by Board. WCP B Upgrade to
3400tph on track for delivery, with key phases approved by
the Board.
The WCP A Nataka projects progressed well through PFS stage to DFS with key phases
approved by the Board, with key contracts signed and works progressing on schedule. However
as estimated capex increased significantly from the PFS estimates presented at the Capital
Markets Day in April the Committee considered that only an on-Target score was appropriate.
This score was also awarded in respect of the WCP B upgrade where planning was well
advanced but execution deferred for budgetary reasons.
50.0 5.00
Long-term mining strategy 5.0 Delivery of PFS for Congolone. Evidence of incorporation
of optimisations and opportunities to deliver higher value/
lower risk solutions
The long-term mining strategy focussed on the possible development of our Congolone
resource where PFS work is ongoing and a promising infill drilling campaign conducted to
extend project life and upgrade resources. On-Target performance awarded.
50.0 2.50
Corporate,
leadership,
vision and
values
5.0 The Committee considers how each Executive performed
in terms of the Board’s expectations of his role, including:
leadership, strategic vision and planning, business
development, succession planning and alignment with
the Company’s vision and values. Regard is also had to
the Executive’s part in the achievement of the Board
objectives for the year and in long-term value creation for
the Company.
In awarding an 80% score to each executive the Committee took into
account, among other things, the very positive impressions the Board took
away from a site visit in December, the recent recruitment of some high
quality managers there who were clearly already making a difference and
the evident success of the leadership training programme.
80.0 4.0
Total 100.0 38.15
Overall, the outcome of the scorecard and, therefore, outcome for each of Michael Carvill and Tom Hickey was 38.15% of maximum (and
therefore 38.15% of salary). The Committee believes this appropriately reflects the Executive Directors’ performance during the year and the
Group’s results, and, therefore, has not applied further discretion to this outcome. In accordance with the policy, as the bonuses were less than
50% of salary, 100% of the 2023 annual bonus award was paid in cash.
132
Kenmare Resources plc Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION CONTINUED
Performance targets and outcomes for the 2023 financial year were as follows:
PERFORMANCE NEEDED FOR PAY OUT AT
2023 ANNUAL
BONUS
OUTCOME WEIGHTING %
THRESHOLD
(25% OF
MAXIMUM VESTS)
TARGET
(50% OF
MAXIMUM VESTS)
STRETCH
(100% OF
MAXIMUM VESTS)
PERFORMANCE
ACHIEVED
PROPORTION OF
ELEMENT
2023
%
Operational Ilmenite production (tonnes) 16.0 1,050,000 1,080,000 1,150,000 986,000 0.0 0.00
Zircon (standard and special)
production (tonnes)
6.0 51,000 54,000 57,000 51,000 26.0 1.56
Other (tonnes) 3.0 45,000 47,000 50,000 54,000 100.0 3.00
Financial EBITDA ($m) 15.0 216.0 254.0 292.0 220.3 27.8 4.17
Production cash costs ($m) 10.0 228.0 218.0 208.0 226.3 29.3 2.93
Average share price in December 2023
(including dividends paid in 2023)
(£ per share)
5.0 4.68 5.10 5.53 4.41 0.0 0.00
Safe and
engaged
workforce
Lost Time Injury Frequency Rate
(LTIFR)
10.0 LTIFR >20% reduction relative to three-year rolling average The LTIFR increased by 25% relative to the three-year rolling average,
therefore this KPI was not achieved.
0.15 0.0 0.00
A healthy,
natural
environment
Climate / Decarbonisation 10.0 On track to deliver 12% emissions reduction by 2024, by
achieving 9% in 2023 with plan for additional 3% in 2024
A 14% reduction in Scope 1 emissions relative to 2022 was delivered in 2023. Diesel consumption
is forecast to increase in 2024, however, mitigation programmes were initiated in 2023 to ensure
the 12% emissions reduction, relative to the 2021 baseline is delivered.
100.0 10.00
Thriving
communities
Increase local spend (opex) - excl
electricity & diesel
2.5 4% increased year-on-year spend in Mozambican spend
(excluding electricity and diesel)
A 3.2% increase in operational expenditure was delivered as well as six new contracts with local
suppliers.
100.0 2.50
Trusted
business
Compliance with Supplier Code of
Conduct
2.5 80% compliance with audits against Kenmare’s Supplier
Code of Conduct, via sustainability questionnaire.
84% compliance with Kenmare’s Supplier Code of Conduct was achieved. 100.0 2.50
Project
execution
Development projects progress 10.0 WCP A Nataka projects progressed through DFS, key
execution phases approved by Board. WCP B Upgrade to
3400tph on track for delivery, with key phases approved by
the Board.
The WCP A Nataka projects progressed well through PFS stage to DFS with key phases
approved by the Board, with key contracts signed and works progressing on schedule. However
as estimated capex increased significantly from the PFS estimates presented at the Capital
Markets Day in April the Committee considered that only an on-Target score was appropriate.
This score was also awarded in respect of the WCP B upgrade where planning was well
advanced but execution deferred for budgetary reasons.
50.0 5.00
Long-term mining strategy 5.0 Delivery of PFS for Congolone. Evidence of incorporation
of optimisations and opportunities to deliver higher value/
lower risk solutions
The long-term mining strategy focussed on the possible development of our Congolone
resource where PFS work is ongoing and a promising infill drilling campaign conducted to
extend project life and upgrade resources. On-Target performance awarded.
50.0 2.50
Corporate,
leadership,
vision and
values
5.0 The Committee considers how each Executive performed
in terms of the Board’s expectations of his role, including:
leadership, strategic vision and planning, business
development, succession planning and alignment with
the Company’s vision and values. Regard is also had to
the Executive’s part in the achievement of the Board
objectives for the year and in long-term value creation for
the Company.
In awarding an 80% score to each executive the Committee took into
account, among other things, the very positive impressions the Board took
away from a site visit in December, the recent recruitment of some high
quality managers there who were clearly already making a difference and
the evident success of the leadership training programme.
80.0 4.0
Total 100.0 38.15
133
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Read more
about
Operations on
pages 44 to 47
Vesting of the 2021 KRSP awards
The KRSP awards granted on 28 April 2021 vest subject
to continued employment and an underpin based on
the Remuneration Committee’s judgement of Company
and individual performance over the three-year vesting
period. The underpin provides the Committee with
the ability to take a holistic view of the Company’s
performance over the three-year period to ensure that
the vesting level is appropriate.
For the 2021 award, the underpin included the following
four core elements to be considered as part of the
assessment (although the Committee may consider
other factors in addition to these):
• operational performance outcomes under the annual
bonus scorecard over the three-year period;
• share price performance since grant;
• environmental, social and governance
performance; and
• major strategic or project decisions and return on
investment.
In advance of the awards vesting in April 2024, the
Committee has conducted an initial assessment of
the underpin. The Committee noted that the three
year absolute share price performance was 53% (an
annual compound growth rate of approx 15%), and that
performance relative to peers was impressive. As part of
this assessment the Committee considered whether there
had been a windfall gain and concluded that there had not.
Delivery of ESG targets was strong in 2021 and 2022, with
a decline in 2023, mainly reflecting a drop in the important
LTIFR performance. However, the Committee recognised
that over an 19 month period in 2022/2023 the Company
achieved a record 12+ million man hours worked without
an LTI. There were no significant ESG issues or health
and safety incidents during this time. Bonus outcomes
for 2021, 2022 and 2023 have averaged around 50% of
maximum (i.e. on target), with the ilmenite production
target missed in each of the three years. Project execution
has generally been on track although some capital
expenditure guidance was exceeded, and good progress
was made on the long-term mining strategy.
Taking all of this and other factors into account,
the Committee has provisionally determined that a
reduction to the vesting of 5% should be made to the
awards. The Committee will confirm the final vesting
level in April 2024, with any changes outlined in next
year’s remuneration report.
Vesting of the 2020 KRSP awards
The KRSP awards granted in May 2020 vested in May
2023. These had been granted subject to an underpin.
Details of the relevant underpin and the Committee’s
initial assessment of it were set out on page 128 of the
2022 Annual Report. That report stated that, at that
time, the Committee had provisionally determined that
a reduction of 5% should be made to the awards. The
Committee’s final assessment of the underpin at the
time of vesting confirmed this determination.
Total pension entitlements
Pension provision for the Executive Directors was
made in 2023 based on 10% of base salary, in line
with the remuneration policy and the contributions
for the Kenmare corporate staff. In lieu of his pension
contribution, Tom Hickey receives this amount in cash.
Fees paid to Non-Executive Directors are not pensionable.
No Director has a prospective entitlement to a defined
benefit pension by reference to their service as a Director.
Payments for loss of office (audited)
No payments for loss of office were made during the
year. Tony McCluskey stepped down as Director of
the Company on 26 September 2022 but remained
an employee of the Company until 18 May 2023. The
Committee determined that he would be treated as a
“good leaver” by reason of retirement in accordance
with the Directors’ remuneration policy and KRSP rules.
As outlined earlier, the expected vesting outcome in
relation to the 2021 KRSP award is 95%, equivalent to
51,513 shares for Tony McCluskey with a value of £0.2
million based on the average share price over the final
three months of 2023 (£3.98). The vesting date for
the awards is 28 April 2024 and the Committee will
determine the final vesting level at this time. Details of
Tony McCluskey’s outstanding share awards are set out
on page 130 of the 2022 Annual Report.
Payments to past Directors (audited)
Terence Fitzpatrick stepped down as a Director on 1 July
2018 but has remained an employee of the Company. His
salary is for his services as an employee and not loss of
office compensation. During the year, contributions of
$33,187 (2022: $30,450) were paid into his pension.
Tony McCluskey stepped down as a Director on
26 September 2022 but remained an employee of
the Company until 18 May 2023. His salary was for
his services as an employee and not loss of office
compensation. During the year, contributions of $6,982
(2022: $9,900) were paid into his pension and he received
a salary of $78,313.As outlined earlier, the expected
vesting outcome in relation to the 2021 KRSP award is
95%, equivalent to 51,513 shares for Tony McCluskey with
a value of £0.2 million based on the average share price
over the final three months of 2023 (£3.98). The vesting
date for the awards is 28 April 2024 and the Committee
will determine the final vesting level at this time. Details
of Tony McCluskey’s outstanding share awards are set
out on page 130 of the 2022 Annual Report.
134
Kenmare Resources plc Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION CONTINUED
Directors’ and Secretary’s shareholdings (audited)
The interests of the Secretary and Directors who held office during 2023, their spouses and minor children, in the
ordinary share capital of the Company, other than pursuant to share options or share awards, were as set out below:
SHARES HELD
27 MARCH
2024
SHARES HELD
31 DECEMBER
2023
SHARES HELD
1 JANUARY
2023
Issa Al Balushi – – –
Michael Carvill
1
524,364 505,975 377,621
Mette Dobel 2,500 2,500 –
Elaine Dorward-King 10,000 10,000 10,000
Clever Fonseca 5,170 970 970
Tom Hickey 47,000 47,000 40,000
Graham Martin 100,000 100,000 100,000
Deirdre Somers 3,940 3,940 3,940
Andrew Webb 10,000 – –
Chelita Healy (Secretary) – – –
1
This holding includes 152,320 shares held by Rostrevor One Limited, a company controlled by Michael Carvill and 84,787 shares held by the
Kenmare Resources Employee Benefit Trust on his behalf under the terms of the KRSP.
Share awards scheme (audited)
NUMBER OF NIL-COST OPTIONS
(EXCLUDING DIVIDEND EQUIVALENTS UNLESS STATED OTHERWISE)
NAME
SHARE
PLAN
AT
1 JAN
2023 AWARDED
VESTED
AND
EXERCISED
LAPSED OR
FORFEITED
AT
31 DEC
2023
DATE OF
GRANT
EXERCISE
PERIOD
MARKET
PRICE AT
EXERCISE
£
Michael Carvill KRSP 29,872 3,998
1
33,870 – – 15 March 2018 15/03/2021–
15/03/2025
£4.65
3
KRSP 60,829 4,072
1
34,487 – 30,414 15 March 2019 15/03/2022–
15/03/2026
£4.65
3
KRSP 157,206 27,294
1
176,640 7,860
2
– 13 May 2020 13/05/2023–
13/05/2027
£4.37
4
KRSP 133,930 – – – 133,930 28 April 2021 28/04/2024–
28/04/2028
KRSP 119,730 – – – 119,730 5 April 2022 5/04/2025–
5/04/2029
KRSP – 118,261 – – 118,261 6 April 2023 6/04/2026–
6/04/2030
Totals 501,567 153,625 244,997 7,860 402,335
Tom Hickey KRSP 91,829 – – – 91,829 28 September 2022 28/09/2025–
28/09/2029
KRSP – 78,048 – – 78,048 6 April 2023 6/04/2026–
6/04/2030
Totals 91,829 78,048 – – 169,877
Chelita Healy KRSP 2,158 – – 2,158 28 April 2021 28/04/2024–
28/04/2028
KRSP 4,696 – – – 4,696 5 April 2022 5/04/2025–
5/04/2029
KRSP – 5,192 – – 5,192 6 April 2023 6/04/2026–
6/04/2030
Totals 6,854 5,192 – – 12,046
1
Dividend equivalent entitlements relating to share awards vesting.
2
2020 award reduced by the Remuneration Committee by 5% on application of the discretionary underpin. See page 129.
3
Date of exercise was 6 April 2023.
4
Date of exercise was 24 May 2023.
135
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
The aggregate gain on awards that vested during the year for
Executive Directors was $1.4 million (2022: $1.5 million).
In the case of the Executive Directors, the KRSP awards made
prior to 2020 vest, subject to continued employment, 60% on the
third anniversary of grant date, 20% on fourth anniversary, and
20% on fifth anniversary.
The Executive Directors’ KRSP awards granted in 2020 and
thereafter vest, subject to continued employment and to the
Remuneration Committee’s assessment against a discretionary
underpin, on the third anniversary of grant date. The vested
KRSP awards are subject to a two-year holding period, which may
extend beyond an Executive Director’s cessation of employment
in accordance with the post-employment holding requirements of
the remuneration policy.
The 2023 awards for Michael Carvill and Tom Hickey represent
100% of base salary based on a share price of £4.663; the average
closing price of the Company’s shares during the five trading days
following announcement of the Company’s preliminary results for
2022. The value of these awards totalled £0.6 million for Michael
Carvill and £0.4 million for Tom Hickey.
In the case of Chelita Healy the above KRSP awards vest, subject
to continued employment, on the third anniversary of grant date.
Non-Executive Directors do not receive awards under share plans.
Executive Directors’ shareholding requirement
In accordance with the current remuneration policy, the Executive
Directors are required to build up shareholdings equal to 250%
of their respective salaries. This requirement can be met both
by shareholdings held by the Executive Directors (directly or
indirectly) and, on a net of tax basis, by unvested share awards
that are not subject to performance or underpin conditions.
As of 31 December 2023, the shareholding of Michael Carvill
represented 385% of his salary and the shareholding of Tom
Hickey represented 53% of his salary.
Performance graph and table
The value at 31 December 2023 of $100 invested in the Group
in 2013 compared with the value of $100 invested in the FTSE
All-Share Industrial Metals and Mining Index, as this is a relevant
sector index of which Kenmare is a constituent, is shown in the
graph below.
Value at 31 December 2023 of $100 investment at 31 December 2013
2013 2014 2015 2016 2017 2018 2019 2020 20222021 2023
Kenmare Resources plcFTSE All-Share Industrial Metals and Mining Index
0
100
200
300
400
500
600
700
800
900
1000
1100
The statutory chart above includes a period prior to the capital raise in 2016. The share price declined significantly during this period due
to a number of factors, including challenging commodity markets. However, Kenmare’s share price performance since the 2016 capital
raise has improved (with the share price as at 31 December 2023 being £3.95, which was 70% above the 2016 capital raise price of £2.32).
Note the FTSE All Share General Mining Index used in prior years is no longer available and so the FTSE All-Share Industrial Metals and
Mining Index has been used in the above chart.
136
Kenmare Resources plc Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION CONTINUED
Value at 31 December 2023 of $100 investment at 31 December 2015
The remuneration paid to the Managing Director in the past 10 years is set out below:
SINGLE FIGURE OF TOTAL
REMUNERATION $’000
BONUS PAY-OUT
(AS % MAXIMUM OPPORTUNITY)
LONG-TERM INCENTIVE
VESTING RATES
(AS % MAXIMUM OPPORTUNITY)
2023 Michael Carvill 1,657 38% 95%
2022 Michael Carvill 1,760 48% 95%
2021 Michael Carvill 1,135 60% N/A
2020 Michael Carvill 1,070 62% N/A
2019 Michael Carvill 1,444 47% 25%
2018 Michael Carvill 1,652 58% 83.3%
2017 Michael Carvill 1,528 59% –
2016 Michael Carvill 1,340 66%
1
N/A
2015 Michael Carvill 744 22%
1
N/A
2014 Michael Carvill 967 26%
1
N/A
1
Amount shown reflects the cash and deferred share award under the Kenmare Incentive Plan (KIP), part of which was conditional on long-term performance.
Percentage change in remuneration and Company performance
ANNUAL CHANGE
2023
%
2022
%
2021
%
Directors' remuneration
Executive Directors
Michael Carvill, Managing Director -9% 55% 6%
Tom Hickey, Financial Director 287% N/A N/A
Non-Executive Directors
1
Issa Al Balushi N/A N/A N/A
Mette Dobel 25% N/A N/A
Elaine Dorward-King 10% 11% (10%)
Clever Fonseca 10% 1% 4%
Graham Martin 3% 13% 6%
Deirdre Somers 10% 9% 226%
Andrew Webb 53% 2,483% N/A
Group performance
Net profit (36%) 60% 669%
Employee average remuneration on a full-time equivalent basis
Employees of the Company Kenmare Resources plc 10% 8% 10%
1
The changes in the Non-Executive Directors’ fees are a result of changes to Board and/or Committee composition and responsibilities during 2023 and the fact that the
underlying currency of the fees is Euros.
Relative importance of spend on pay
ANNUAL CHANGE
2023
$’000
2022
$’000 CHANGE
Overall spend on pay including Directors 59,098 57,769 2.3%
Profit distributed by way of dividend and share back 86,574 34,726 149%
Group cash operating costs 228,100 218,700 4%
Average employee numbers throughout the Group increased from 1,662 in 2022 to 1,687 in 2023.
Group cash operating costs have been included in the table in order to give a context to spend on pay relative to the overall cash
operating costs.
137
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Statement of implementation of policy in 2024 (audited)
Base salary
The base salaries for 2024 will increase by 4% reflecting an inflationary adjustment, which is below the wider Kenmare corporate staff
increase of 4.6%. These are set out below:
EXECUTIVE DIRECTOR
2024
$’000
2023
$’000 % CHANGE
Michael Carvill 687 661 4%
Tom Hickey 454 437 4%
The underlying currency of Michael Carvill and Tom Hickey’s base salaries is Euro. The US Dollar figures shown above for 2024 have been
calculated using the average 2023 Euro to US Dollar exchange rate. The final US Dollar figure for 2024 will vary depending on exchange
rate movements.
Annual bonus
The incentive opportunity for the Executive Directors under the incentive scheme for 2024 will be as follows:
EXECUTIVE DIRECTOR
ON-TARGET
INCENTIVE
(% OF SALARY)
MAXIMUM
INCENTIVE
(% OF SALARY)
Michael Carvill 50 100
Tom Hickey 50 100
The performance metrics for 2024 annual bonuses and their associated weightings are as follows:
AREA MEASURE WEIGHT
1
Operational Ilmenite, zircon, rutile and concentrates production volumes 25
Financial EBITDA/Total cash operating costs /TSR 30
ESG Safe and engaged workforce
A healthy, natural environment
Thriving communities
25
Strategic and project execution 15
Corporate 5
1
The targets for the Managing Director and Financial Director will be the same for all metrics except for the corporate category, where the Remuneration Committee will
determine appropriate splits reflecting their respective responsibilities and challenges in these areas in 2024.
The targets have not been disclosed due to commercial sensitivity but will be disclosed in the 2024 Annual Report on remuneration. The
performance metrics as set out above seek to deliver ongoing progress in relation to operational performance, cost efficiency, ESG, and
strategic corporate objectives. The performance targets associated with the quantitative measures are in line with guidance issued in
January 2024.
138
Kenmare Resources plc Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION CONTINUED
139
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Kenmare Restricted Share Plan
The maximum award level for the Executive Directors under the KRSP for 2024 will be 100% of base salary. In addition to the assessment
of the appropriate award level prior to grant, the Remuneration Committee will also undertake a discretionary underpin performance
assessment prior to vesting.
The factors, which will be considered as part of the underpin assessment for any KRSP awards granted to Executive Directors in 2024,
will be determined by the Committee and include those set out on page 134 of the 2022 Annual Report.
Statement of voting at AGM
The table below shows the outcome of the advisory vote on the Directors’ Remuneration report and the Directors’ remuneration policy at
the 2023 AGM.
ITEM
VOTES
FOR %
VOTES
AGAINST %
VOTES
WITHHELD
Advisory vote on 2022 Directors’ Remuneration report 73,065,700 99.47 390,957 0.53 252,639
Advisory vote on Directors’ remuneration policy 71,307,730 97.07 2,148,927 2.93 252,639
This report was approved by the Board of Directors and signed on its behalf by:
Graham Martin
CHAIR OF THE REMUNERATION COMMITTEE
3 April 2024
Read more
about cash
flows on page
54
The Directors present their report below and the audited financial statements for the
financial year ended 31 December 2023.
Principal activities
The principal activity of Kenmare Resources plc and its
subsidiary undertakings is the operation and further
development of the Moma Titanium Minerals Mine in
Mozambique.
Strategic report
The Strategic report, including a financial and risk
review and a review of the likely future developments of
the Group is set out on pages 7 to 86.
Statement of results and key
performance indicators
The consolidated statement of profit or loss and other
comprehensive income for the year ended 31 December
2023 is set out on page 154. The financial review on
pages 52 to 56 contains a detailed business review
including an analysis of the key performance indicators
used to measure the Group’s performance and is
incorporated by reference.
Dividends
In May 2023, the Company paid a final 2022 dividend
of $41.1 million representing USc43.33 per share
(2022: USc25.42). In October 2023, the Company paid
a 2023 interim dividend of USc17.5 (H1 2022: USc10.98)
per ordinary share, totalling $15.6 million. The Board
is recommending a final dividend of USc38.54 (2022:
USc43.33) per share. This would give a total dividend
in respect of 2023 of USc56.04 (2022: USc54.30) per
share. It is proposed to pay the final dividend on 17 May
2024 to shareholders registered at the close of business
on 12 April 2024.
Directors and Company
Secretary
The names of the Directors and Company Secretary
who held office during 2023 and a biographical note on
each appear on pages 92 and 93. In accordance with the
UK Corporate Governance Code, all Directors submit to
re-election at each AGM.
Directors’ and Company
Secretary’s shareholdings
and share awards
The interests of the Directors and Secretary of the
Company, their spouses, and minor children in the
ordinary share capital of the Company, and details of
the share awards granted to them in accordance with
the rules of the Kenmare Restricted Share Plan (KRSP),
are detailed in the Annual report on remuneration on
page 135.
Share option and share
award schemes
At 31 December 2023, there were options in respect
of 1,951,621 Ordinary Shares in issue. These are nil-
cost options to subscribe for Ordinary Shares and
were granted pursuant to the KRSP. There were no
outstanding interests under any previous share award
schemes.
Share capital
The Company’s authorised share capital consists of
181,000,000 ordinary shares of €0.001 each (ordinary
shares). The Ordinary Shares rank equally in all
respects and carry no special rights. They carry voting
and dividend rights. There are no restrictions on the
transfer of the Company’s shares or voting rights and
the Company has not been notified of any agreements
between holders of securities in this regard.
At the AGM held on 11 May 2023,
• the Company was granted an authority to make
market purchases, within a set price range, of up to
10% of its own shares;
• the Directors were given the authority by
shareholders to allot shares up to an aggregate
nominal amount equal to €31,609; and
• the Directors were empowered to allot shares and
other equity securities for cash without first offering
them to existing shareholders in proportion to their
holdings, up to an aggregate nominal value equal to
the nominal value of 5% of the issued share capital on
that date.
None of the above authorities have been exercised
and they will expire at the conclusion of this year’s
AGM, at which shareholders will be asked to grant new
authorities to the Company and the Directors.
At an EGM held on 8 September 2023, the Company
was authorised, for the purposes of Section 1074 of
the Companies Act 2014, to make one or more market
purchases and overseas market purchases (within the
meaning of Section 1072 of the Companies Act 2014)
of Ordinary Shares in connection with the Tender Offer
discussed below, at a price of £4.22 per share up to a
maximum of 5,601,390 Ordinary Shares. This authority
expired on 31 December 2023 and was in addition to
that granted at the AGM and referred to above.
On 11 September 2023, the Company purchased
5,601,390 Ordinary Shares which had been acquired
by Peel Hunt LLP pursuant to the Tender Offer. These
Ordinary Shares were cancelled following settlement on
12 September 2023 resulting in an issued share capital
of 89,228,161 Ordinary Shares after the transaction.
Save for the foregoing, the Company did not issue, hold,
purchase, sell or cancel any Ordinary Shares during
2023 and no member of the Group held any Ordinary
Shares during 2023.
140
Kenmare Resources plc Annual Report and Accounts 2023
DIRECTORS’ REPORT
Substantial interests
As at 27 March 2024 and 31 December 2023, the Company had received notification of the interests outlined in the
table below in its ordinary share capital, equal to, or in excess of, 3%:
AS AT 27 MARCH 2024 AS AT 31 DECEMBER 2023
HOLDING/
VOTING
RIGHTS
% OF ISSUED
SHARE
CAPITAL
HOLDING/
VOTING
RIGHTS
% OF ISSUED
SHARE
CAPITAL
African Acquisition S.à.r.l. 15,257,583 17.1% 15,257,583 17.1%
M&G Plc
1
12,788,737 14.3% 12,655,560 14.2%
FIL Limited 6,314,687 7.1% 9,940,744 11.1%
JO Hambro Capital Management Limited 5,418,953 6.1% 5,418,953 6.1%
Aberforth Partners LLP
1
4,955,440 5.6% 4,955,440 5.6%
Premier Miton Group Plc 4,412,311 4.9% 4,412,311 4.9%
Aegis Financial Corporation 3,578,594 4.0% 3,578,594 4.0%
Pageant Investments Ltd 2,926,000 3.3% - -
1
Share figures provided directly by institution as its most recent disclosure did not reflect the number of shares held following completion of the
share buy-back
Principal risks and
uncertainties
Under Section 327 of the Companies Act 2014, the
Directors are required to give a description of the
principal risks and uncertainties facing the Group.
These principal risks and uncertainties are set out
on pages 76 to 85.
Risk exposure
The exposure of the Group to credit, liquidity, market,
currency and cash flow risk is detailed in Note 24.
Capital management is detailed in Note 25.
Viability statement
In line with Provision 31 of the UK Corporate Governance
Code, the Directors have prepared a viability statement
in respect of the financial year ended 31 December 2023,
which is set out on page 86.
Going concern
The Directors have evaluated the appropriateness of the
going concern basis in preparing the 2023 Consolidated
Financial Statements for a period of at least 12 months
from the date of approval of these financial statements
(the “period of assessment”). The evaluation is based on
the Group’s cash flow forecast (“the Group Forecast”).
The Group’s business activities, together with
the factors likely to affect its future development,
performance and position are set out in the Strategic
report on pages 7 to 86 The financial position of the
Group, its cash flows, liquidity and borrowing position
are described in the Financial review on pages 52 to 56.
Note 25 to the financial statements includes the Group’s
policy for managing its capital.
The Group Forecast has been prepared by management
with best estimates of production, pricing and cost
assumptions over the period of assessment.
The Group recognises the principal risks, which can
impact on the outcome of the Group Forecast and have,
therefore, applied sensitivity analysis to the assumptions
to test the robustness of the cash flow forecast
for changes in market prices, shipments, operating
and capital cost assumptions. Changes in these
assumptions affect the level of sales and profitability
of the Group and the amount of capital required to
deliver the projected production levels. Debt covenants
are complied with and Group liquidity is maintained,
although at lower levels, in each of these sensitivities.
Having assessed the principal risks facing the Group,
together with the Group’s cash flow forecast, the
Directors have a reasonable expectation that the Group
has adequate resources for the foreseeable future
and can continue to adopt the going concern basis of
accounting in preparing the annual financial statements.
Statutory compliance
statement
The Directors acknowledge that they are responsible for
securing the Company’s compliance with the Company’s
“relevant obligations” within the meaning of Section
225 of the Companies Act 2014 (described below as
“Relevant Obligations”).
The Directors confirm that they have:
b. Drawn up a compliance policy statement setting out
the Company’s policies (that are, in the opinion of the
Directors, appropriate to the Company) in respect
of the Company’s compliance with its Relevant
Obligations;
c. Put in place appropriate arrangements or
structures that, in the opinion of the Directors,
provide a reasonable assurance of compliance in
all material respects with the Company’s Relevant
Obligations; and
d. During the financial year to which this report
relates, conducted a review of the arrangements
or structures that the Directors have put in place
to ensure material compliance with the Company’s
Relevant Obligations.
Read more
about
Kenmare’s
viability
statement on
page 86
141
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Takeover directive
In the event of a change in control of the Company, the
Project Companies or any other subsidiary that is a
borrower under the revolving credit facility, such facility
is automatically cancelled and all outstanding amounts
together with accrued interest become immediately
due and payable. The KRSP contains change of control
provisions that provide for accelerated crystallisation
of awards and vesting of shares (including by way of
exercise of nil-paid options) in the event of a change of
control of the Company. Other than as described in the
Remuneration Policy report on pages 135 to 145 of the
2022 Annual Report, there are no agreements between
the Company and its Directors or employees providing
for predetermined compensation for loss of office or
employment that would occur in the event of a bid for
the Company, save that certain employees, not being
Directors, have service contracts that either provide
for extended notice periods and/or fixed payments on
termination following a change in control of the Company.
Corporate Governance
Statement
For the purpose of Section 1373 of the Companies
Act 2014, the Directors have prepared a Corporate
Governance Statement in respect of the financial year
ended 31 December 2023, which is set out on page 153.
Non-financial reporting
statement
In compliance with the European Union (Disclosure
of Non-Financial and Diversity Information by certain
large undertakings and groups) Regulations 2017, the
table below sets out the relevant sections in this Annual
Report to understand the Group’s approach to these
non-financial matters.
REPORTING
REQUIREMENTS
PAGE
REFERENCE
KENMARE’S
POLICIES RISK ASSESSMENT
Environmental
matters
Pages 66 to 71 Environmental Environmental risk is included in the risk
entitled “Health, Safety and Environment
(“HSE”) described in the “Principal risks and
uncertainties” section on page 82.
Social and
employee matters
Pages 20 to 22
Pages 62 to 63
Page 73
Page 107
Health and safety
Whistleblowing
procedure
Conflicts of interest
Employment
Stakeholder
engagement
Health and safety risk is included in the risk
entitled “Health, Safety and Environment”
(“HSE”) described in the “Principal risks and
uncertainties” section on page 82. Community
engagement and investment is relevant to
the risk entitled “Permitting, licensing and
government agreement risk”, described in
the “Principal risks and uncertainties” section
on page 79. Otherwise, although the risks
associated with social and employee matters
are actively monitored, the Group does not
believe these risks meet the threshold of a
principal risk for the business.
Human rights Pages 20 to 23
Page 63
Pages 72 and 73
Human rights
Freedom of
association
Although the risks associated with human
rights abuses are actively monitored, the Group
does not believe these risks meet the threshold
of a principal risk for the business.
Anti-bribery and
corruption
Pages 72 and 73 Anti-bribery
Business ethics
Although the risks associated with bribery and
corruption are actively monitored, the Group
does not believe these risks meet the threshold
of a principal risk for the business.
Description of
business model
Pages 24 and 25
Non-Financial
key performance
indicators
Included in KPIs on pages 36 to 37 and
the Sustainability report on pages 58
and 59
142
Kenmare Resources plc Annual Report and Accounts 2023
DIRECTORS’ REPORT CONTINUED
Diversity and inclusion
The Diversity and Inclusivity report is within the
Nomination Committee report on page 112.
Taxonomy Regulation
For the purposes of the EU Taxonomy Climate
Delegated Act, the Directors have prepared a taxonomy
disclosure in respect of the financial year ended
31 December 2023, which is set out on page 74.
Other
Audit and Risk Committee
The Board of the Company has established an Audit
and Risk Committee. See pages 118 to 123 for the Audit
and Risk Committee report for the financial year under
review.
Rules regarding Directors, etc.
Details of the rules relating to the appointment or
removal of Directors, amendment of the Articles of
Association and the powers of Directors are set out in
the Corporate Governance report.
Subsidiary undertakings and branches
The subsidiary undertakings of the Company at
31 December 2023 are outlined in Note 4 to the
Company financial statements. Each of the subsidiary
undertakings Kenmare Moma Mining (Mauritius)
Limited, Kenmare Moma Processing (Mauritius) Limited
and Mozambique Minerals Limited operates a branch in
Mozambique. In addition, the Company established and
maintains a branch in the UK, registered at Companies
House.
Political donations
There were no political donations made during 2023
that require disclosure under the Electoral Act 1997
(as amended).
UK Listing Rule 9.8.4
No information is required to be disclosed in respect of
Listing Rule 9.8.4.
Auditors
KPMG, a global chartered accounting firm, was first
appointed statutory auditor on 14 May 2019 and has
been reappointed annually since that date and pursuant
to Section 383(2), of the Companies Act 2014 will
continue in office. The financial statements on page 154
to 187 have been audited by KPMG.
Disclosure of information to
statutory auditor
In accordance with the provisions of Section 330 of
the Companies Act 2014, each of the persons who are
Directors of the Company at the date of approval of this
report confirms that:
• So far as each Director is aware, there is no relevant
audit information (as defined in the Companies Act
2014) of which the statutory auditor is unaware; and
• Each Director has taken all the steps that they ought
to have taken as a Director to make themself aware
of any relevant audit information (as defined) and to
ensure that the statutory auditors are aware of such
information.
Accounting records
The Directors have employed appropriately qualified
accounting personnel and have maintained appropriate
accounting systems to ensure that proper accounting
records are kept in accordance with Sections 281 to 285
of the Companies Act 2014. The books of account are
kept at the Company’s office at 4th Floor, Styne House,
Hatch Street Upper, Dublin 2, Ireland.
Events since the financial
year-end
Details of events since the financial year-end are set out
in Note 29 to the consolidated financial statements.
Notice of Annual General
Meeting and special business
Notice of the Annual General Meeting, together with
details of special business to be considered at the
meeting, is set out in a separate circular to be sent to
shareholders and will also be available on the Group’s
website, www.kenmareresources.com.
Cross-references
All information cross-referenced in this report forms
part of the Directors’ report.
On behalf of the Board:
M. Carvill T. Hickey
DIRECTOR DIRECTOR
3 April 2024 3 April 2024
Read more
about the
Remuneration
Committee
Report on
pages 124 to
126
143
Kenmare Resources plc Annual Report and Accounts 2023
GOVERNANCE
Kenmare has a robust balance sheet and the Company
finished the year with net cash of $20.7 million. As a leader
in the finance team at Moma, Linda is looking forward
to further optimising operational expenditures and
strengthening cost controls in 2024.
Linda Chirume
FINANCE SUPERINTENDENT
144
Kenmare Resources plc Annual Report and Accounts 2023
Statement of Directors’
responsibilities
146
Independent auditor’s report
147
Consolidated statement of
comprehensive income
154
Consolidated statement of
financial position
155
Consolidated statement of
changes in equity
156
Consolidated statement of
cash flows
157
Notes to the consolidated
financial statements
158
GROUP
FINANCIAL
STATEMENTS
145
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
The Directors are responsible for preparing the Annual Report
and the Group and parent company financial statements, in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and parent
company financial statements for each financial year. Under that
law, the Directors are required to prepare the Group financial
statements in accordance with IFRS as adopted by the European
Union and applicable law including Article 4 of the IAS Regulation.
The Directors have elected to prepare the parent company
financial statements in accordance with Financial Reporting
Standard 101 Reduced Disclosure Framework (‘FRS 101’) and the
Companies Act 2014.
Under company law the Directors must not approve the Group
and parent company financial statements unless they are satisfied
that they give a true and fair view of the assets, liabilities, and
financial position of the Group and parent company and of the
Group’s profit or loss for that year. In preparing each of the Group
and parent company financial statements, the Directors are
required to:
• Select suitable accounting policies and then apply them
consistently;
• Make judgements and estimates that are reasonable and
prudent;
• State whether applicable Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
• Assess the Group and parent company’s ability to continue as
a going concern, disclosing, as applicable, matters related to
going concern; and
• Use the going concern basis of accounting unless they either
intend to liquidate the Group or parent company or to cease
operations, or have no realistic alternative but to do so.
The Directors are also required by the Transparency (Directive
2004/109/EC) Regulations 2007 and the Transparency Rules
of the Central Bank of Ireland to include a management report
containing a fair review of the business and a description of the
principal risks and uncertainties facing the Group.
The Directors are responsible for keeping adequate accounting
records that disclose with reasonable accuracy at any time the
assets, liabilities, financial position, and profit or loss of the Group
and which enable them to ensure that the financial statements
comply with the provision of the Companies Act 2014. The
Directors are also responsible for taking all reasonable steps to
ensure such records are kept by its subsidiaries which enable
them to ensure that the financial statements of the Group comply
with the provisions of the Companies Act 2014 including Article
4 of the IAS Regulation. They are responsible for such internal
controls as they determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error, and have general responsibility
for safeguarding the assets of the Group, and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities. The Directors are also responsible for
preparing a Directors’ report that complies with the requirements
of the Companies Act 2014.
The Directors are responsible for the maintenance and integrity
of the corporate and financial information included on the
Group’s and Company’s website. Legislation in the Republic of
Ireland concerning the preparation and dissemination of financial
statements may differ from legislation in other jurisdictions.
Responsibility statement as required by the transparency
directive and UK corporate governance code:
Each of the Directors, whose names and functions are listed on
pages 92 and 93 of this Annual Report, confirm that, to the best of
each person’s knowledge and belief:
• The Group financial statements, prepared in accordance with
IFRS as adopted by the European Union and the Company
financial statements prepared in accordance with Financial
Reporting Standard 101 Reduced Disclosure Framework (‘FRS
101’) and the Companies Act 2014, give a true and fair view of
the assets, liabilities, and financial position of the Group and
parent company at 31 December 2023 and of the profit of the
Group for the year then ended;
• The Directors’ report contained in the Annual Report includes a
fair review of the development and performance of the business
and the position of the Group and parent company, together
with a description of the principal risk and uncertainties that
they face; and
• The Annual Report and financial statements, taken as a whole,
provides the information necessary to assess the Group’s
performance, business model, and strategy and is fair, balanced
and understandable and provides the information necessary
for shareholders to assess the parent company’s position and
performance, business model, and strategy.
On behalf of the Board:
M. Carvill T. Hickey
DIRECTOR DIRECTOR
3 April 2024 3 April 2024
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Kenmare Resources plc Annual Report and Accounts 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
IN RESPECT OF THE ANNUAL REPORT AND THE FINANCIAL STATEMENTS
Report on the audit of the financial
statements
Opinion
We have audited the financial statements of Kenmare Resources
PLC (‘the Company’) and its consolidated undertakings (‘the
Group’) for the year ended December 31, 2023 set out on
pages 154 to 187 and contained within the reporting package
635400ETHWP1EKJMDO16-2023-12-31-en, which comprise
the Consolidated Statement of Financial Position, Consolidated
Statement of Comprehensive Income, Consolidated Statement
of Changes in Equity, Consolidated Statement of Cash Flows,
Parent Company Statement of Financial Position, Parent Company
Statement of Changes in Equity and related notes, including the
material accounting policies set out in note 1.
The financial reporting framework that has been applied in
the preparation of the Group financial statements is Irish Law,
including the Commission Delegated Regulation 2019/815
regarding the single electronic reporting format (ESEF) and
International Financial Reporting Standards (IFRS) as adopted
by the European Union and, as regards the Company financial
statements, Irish Law and FRS 101 Reduced Disclosure Framework
issued in the United Kingdom by the Financial Reporting Council.
In our opinion:
the financial statements give a true and fair view of the assets,
liabilities and financial position of the Group and Company as
at December 31, 2023 and of the Group’s profit for the year
then ended;
the Group financial statements have been properly prepared in
accordance with IFRS as adopted by the European Union;
the Company financial statements have been properly
prepared in accordance with FRS 101 Reduced Disclosure
Framework issued by the UK’s Financial Reporting Council; and
the Group and Company financial statements have been
properly prepared in accordance with the requirements of
the Companies Act 2014 and, as regards the Group financial
statements, Article 4 of the IAS Regulation.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (Ireland) (ISAs (Ireland)) and applicable
law. Our responsibilities under those standards are further
described in the Auditor’s Responsibilities section of our report.
We believe that the audit evidence we have obtained is a sufficient
and appropriate basis for our opinion. Our audit opinion is
consistent with our report to the audit committee.
We were appointed as auditor by the directors on July, 17,
2019. The period of total uninterrupted engagement is the 5
years ended December 31, 2023. We have fulfilled our ethical
responsibilities under, and we remained independent of the
Group in accordance with ethical requirements applicable in
Ireland, including the Ethical Standard issued by the Irish Auditing
and Accounting Supervisory Authority (IAASA) as applied to
public interest entities. No non-audit services prohibited by that
standard were provided.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that
the directors’ use of the going concern basis of accounting
in the preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and
Company’s ability to continue to adopt the going concern basis of
accounting included:
We evaluated the directors’ assessment of the entity’s ability
to continue to adopt the going concern basis of accounting. In
our evaluation of the Directors’ conclusions, we considered the
inherent risks to the Group’s and Company’s business model and
analysed how those risks might affect the Group’s and Company’s
financial resources or ability to continue operations over the going
concern period. There were no risks identified that we considered
were likely to have a material adverse effect on the Group’s and
Company’s available financial resources over this period.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the
Group or the Company’s ability to continue as a going concern
for a period of at least twelve months from the date when the
financial statements are authorised for issue.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections of
this report.
In relation to the Group and the Company’s reporting on how they
have applied the UK Corporate Governance Code and the Irish
Corporate Governance Annex, we have nothing material to add
or draw attention to in relation to the directors’ statement in the
financial statements about whether the directors considered it
appropriate to adopt the going concern basis of accounting.
Detecting irregularities including fraud
We identified the areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements and risks of material misstatement due to fraud, using
our understanding of the entity’s industry, regulatory environment
and other external factors and inquiry with the directors. In
addition, our risk assessment procedures included:
Inquiring with the directors and management as to the Group’s
policies and procedures regarding compliance with laws and
regulations, identifying, evaluating and accounting for litigation
and claims, as well as whether they have knowledge of non-
compliance or instances of litigation or claims.
Inquiring of directors, the audit and risk committee, internal
audit, management and inspection of policy documentation as
to the Group’s policies and procedures to prevent and detect
fraud, including the internal audit function, and the Group’s
channel for “whistleblowing”, as well as whether they have
knowledge of any actual, suspected or alleged fraud.
Inquiring of directors, the audit and risk committee and internal
audit regarding their assessment of the risk that the financial
statements may be materially misstated due to irregularities,
including fraud.
Inspecting the Group’s regulatory and legal correspondence.
Reading Board and audit and risk committee minutes.
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FINANCIAL STATEMENTS
INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF KENMARE RESOURCES PLC
Considering remuneration incentive schemes and performance
targets for management and directors.
Performing planning analytical procedures to identify any usual
or unexpected relationships.
We discussed identified laws and regulations, fraud risk factors
and the need to remain alert among the audit team. This included
communication from the group to full scope component audit
teams of relevant laws and regulations and any fraud risks
identified at the Group level and request to full scope component
audit teams to report to the Group audit team any instances of
fraud that could give rise to a material misstatement at group.
Firstly, the Group is subject to laws and regulations that directly
affect the financial statements including companies and financial
reporting legislation, taxation legislation and distributable profits
legislation. We assessed the extent of compliance with these laws
and regulations as part of our procedures on the related financial
statement items, including assessing the financial statement
disclosures and agreeing them to supporting documentation when
necessary.
Secondly, the Group is subject to many other laws and regulations
where the consequences of non-compliance could have a material
effect on amounts or disclosures in the financial statements, for
instance through the imposition of fines or litigation or the loss of
the Group’s licence to operate. We identified the following areas
as those most likely to have such an effect: health and safety, anti-
bribery, employment law, environmental law, regulatory capital and
liquidity and certain aspects of company legislation recognising
the financial and regulated nature of the Group’s activities and its
legal form.
Auditing standards limit the required audit procedures to identify
non-compliance with these non-direct laws and regulations
to inquiry of the directors and management and inspection
of regulatory and legal correspondence, if any. These limited
procedures did not identify actual or suspected non-compliance.
We assessed events or conditions that could indicate an incentive
or pressure to commit fraud or provide an opportunity to
commit fraud. As required by auditing standards, we performed
procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition.
In response to the fraud risks, we also performed procedures
including:
Identifying journal entries and other adjustments to test for all
full scope components based on risk criteria and comparing
the identified entries to supporting documentation.
Evaluating the business purpose of significant unusual
transactions
Assessing significant accounting estimates for bias
Assessing the disclosures in the financial statements
As the Group is regulated, our assessment of risks involved
obtaining an understanding of the legal and regulatory framework
that the Group operates and gaining an understanding of
the control environment including the entity’s procedures for
complying with regulatory requirements.
Owing to the inherent limitations of an audit, there is an
unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have
properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-
compliance with laws and regulations (irregularities) is from the
events and transactions reflected in the financial statements, the
less likely the inherently limited procedures required by auditing
standards would identify it.
In addition, as with any audit, there remains a higher risk of
non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the override
of internal controls. We are not responsible for preventing non-
compliance and cannot be expected to detect non-compliance
with all laws and regulations.
Key audit matters: our assessment of risks of
material misstatement
Key audit matters are those matters that, in our professional
judgement, were of most significance in the audit of the financial
statements and include the most significant assessed risks of
material misstatement (whether or not due to fraud) identified
by us, including those which had the greatest effect on: the
overall audit strategy; the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements
as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
In arriving at our audit opinion above, the key audit matters, in
decreasing order of audit significance, were as follows (unchanged
from 2022):
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Kenmare Resources plc Annual Report and Accounts 2023
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF KENMARE RESOURCES PLC
Group key audit matters
Impairment of property, plant, and equipment (PPE) $935.8m (2022: $930.8m)
Refer to page 161 (accounting policy) and pages 172 to 173 (financial disclosures)
THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The Directors have developed an impairment assessment model
which they use to determine if the net present value of future cash
flows from the CGU will be sufficient to recover the carrying value
of the PPE assets of the Group.
There is a risk that incorrect inputs or inappropriate assumptions
could be included in the impairment model leading to an
impairment charge not being correctly identified and recognised.
The level of judgement involved in impairment model could give
rise to a material misstatement given the significance of the
caption to the balance sheet.
For the reasons outlined above the engagement team determine
this matter to be a key audit matter.
Our audit procedures included:
We obtained and inspected management’s assessment of
impairment of PPE assets and considered whether further
indicators should have been assessed based on our knowledge
of the business, its operating environment, industry knowledge,
current market conditions and other information obtained
during the audit.
We made inquiries of members of the Local and Group finance
teams to understand the performance of the Group and
management’s assessment of impairment in the period.
We challenged management’s key assumptions and valuation
techniques in determining whether impairment charges are
required and evaluating if these were indicators of possible
management bias.
We assessed the accuracy of management’s calculations of the
carrying value of those assets subject to impairment testing
and considered whether the assets tested are complete.
Where relevant, we compared certain inputs to external
industry specific and general economic data sources.
We agreed cashflow forecasts used in the impairment model to
Board approved budgets and challenged the reasonableness of
these budgets.
We evaluated the appropriateness and likelihood of the
sensitivities on the cashflow forecasts and the impact on
the overall impairment test outcome and assessed whether
additional sensitivity analysis would have been appropriate.
We recalculated the impairment/headroom for CGUs using
stressed variables to evaluate management’s sensitivity
analysis.
We performed testing on the design and implementation of
the control in place over the impairment of property, plant and
equipment.
We assessed management’s calculations to determine whether
impairment losses were required.
We engaged a KPMG valuation specialist to challenge certain
assumptions used within the discount rate.
We challenged the Group’s financial advisor on the assumptions
and data inputs used in the discount rate and assessed their
capability, competence and objectivity as financial advisers to
the Group.
We evaluated the completeness, accuracy and relevance of
disclosures required by IAS 36, including disclosures about
sensitivities and major sources of estimation uncertainty as
presented in the Group’s financial statements.
Based on evidence obtained, we found that management’s key
assumptions and key inputs were reasonable. We found the
disclosures to be adequate in providing an understanding of the
basis of impairment.
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FINANCIAL STATEMENTS
Group key audit matters (CONTINUED)
Revenue recognition $458.5m (2022: $526.0m)
Refer to page 160 (accounting policy) and pages 166 to 167 (financial disclosures)
THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The Group sells products under a variety of contractual
terms. Revenue is recognised when the control is transferred
to customers which is generally when mineral products have
been delivered in line with the terms of the individual customer
contracts.
There is a risk of fraud at year end that revenue has not been
reported in the consolidated financial statements in line with IFRS
15 and differing contractual terms. There is a risk that it has been
misstated intentionally to meet performance targets or in error
through the recording of a sale intentionally in the incorrect period,
specifically at year end.
For the reasons outlined above the engagement team determine
this matter to be a key audit matter.
Our audit procedures included:
We assessed the appropriateness of the allocation of contract
revenue to multiple element deliverables.
We performed testing on the design and implementation of
the control in place over the recognition of revenue and any
journals posted to revenue with characteristics that make them
susceptible to fraud.
We assessed on a sample basis whether sales transactions
either side of the balance sheet date as well as credit notes
issued after year end were recognised in the correct period
by performing cut-off procedures. We assessed if revenue has
been recorded correctly through the review of shipment terms,
shipment dates bills of lading and letters of credit.
We examined any new significant contractual arrangements
entered into and inquired whether terms have changed with
any significant customer, where there could be an impact on
the timing of revenue recognition.
We evaluated the adequacy of the Group’s disclosures in
respect of revenue.
Based on the procedures performed, we did not identify any
material misstatements. We found the disclosures in respect of
revenue to be appropriate.
Company key audit matter
Investment in subsidiaries $804.0m (2022: $802.9m)
Refer to pages 192 to 193 (accounting policy) and page 196 (financial disclosures)
THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN OUR AUDIT
The investments held by Kenmare Resources plc company only are
held at cost less impairment.
There is a risk in respect of the carrying value of these
investments if future cash flows and performance of these
subsidiaries is not sufficient to support the Company’s investment.
For the reasons outlined above the engagement team determine
this matter to be a key audit matter.
Our audit procedures included:
We obtained an understanding of the process for impairment
considerations and tested the design and implementation of
the relevant control therein.
We obtained and inspected management’s assessment of
impairment indicators.
We compared the carrying value of investments to the net
assets of the subsidiary to consider impairment indicators.
We considered the audit work performed in respect of the
subsidiaries, including the judgements and assumptions used
in the impairment model used to support the carrying value of
the investment in subsidiaries which also supports the carrying
value of the Group’s property, plant and equipment.
We evaluated the adequacy of the Company’s disclosures in
respect of investments in subsidiaries in accordance with the
relevant accounting standards.
Based on the procedures performed, we found management’s
assessment of the carrying value of the investment in subsidiary
undertakings to be appropriate. We found the disclosures to be
adequate in providing an understanding of the basis of impairment.
150
Kenmare Resources plc Annual Report and Accounts 2023
INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF KENMARE RESOURCES PLC
Our application of materiality and an
overview of the scope of our audit
Materiality for the Group financial statements and Company
financial statements as a whole was set at $9.35m (2022: $9.7m)
and $7.5m (2022:$8.0m) respectively, determined with reference
to a benchmark of total assets (2022: net assets) (of which it
represents 0.75% (2022: 1%)) for the Group and Company. We
consider total assets to be the most appropriate benchmark
as it best reflects the operations of the Group and Company. In
applying our judgement in determining the most appropriate
benchmark including our change in benchmark from the prior
audit, the factors which had the most significant impact were:
the stability of the Group, resulting from its nature, where the
Group is in its current mine plan and the industry in which the
Group operates; and
our understanding/view that one of the principal
considerations for investors in assessing the financial
performance is the Group and Company’s total assets.
In applying our judgement in determining the percentage to
be applied to the benchmark, the following qualitative factors,
had the most significant impact, decreasing our assessment of
materiality:
the amount of external debt on the Group and Company’s
balance sheet; and
the entity operates in locations which are subject to political
instability.
We applied Group and Company materiality to assist us determine
the overall audit strategy.
Performance materiality for the Group financial statements
and Company financial statements as a whole was set at $7.0m
(2022: $7.3m) and $5.6m (2022:$6.0m) respectively, determined
with reference to a benchmark of total assets (2022: net
assets) (of which it represents 75% (2022: 75%) and 75% (2022:
75%) respectively. In applying our judgement in determining
performance materiality, the following factors were considered to
have the most significant impact, increasing our assessment of
performance materiality:
the low number and value of misstatements detected; and
the low number and severity of deficiencies in control activities
identified in the prior year financial statement audit.
We applied Group and Company performance materiality to assist
us determine what risks were significant risks for the Group and
Company.
We apply the concept of materiality in planning and performing
the audit, in evaluating the effect of identified misstatements on
the audit and in forming our audit opinion. We reported to the
audit and risk committee any corrected or uncorrected identified
misstatements exceeding $0.47m (2022: $0.48m), in addition
to other identified misstatements that warranted reporting on
qualitative grounds.
In planning the audit we used materiality to assist in making the
determination to perform full scope audits. The Group’s principal
activity, its mining operation in Mozambique, is carried out
through two components. These components were subject to full
scope audits for Group audit purposes, using materiality levels of
US$3.6m each (2022: US$3.5m). We applied materiality to assist
us determine what risks were significant risks and the Group
audit team instructed component auditors as to the significant
areas to be covered by them, including the relevant risks, and the
information to be reported.
Taken together, the Company and the mine components
accounted for 100% of Group revenue (2022: 100%) and 99% of
Group net assets (2022: 99%).
Our audit was undertaken to the materiality and performance
materiality level specified above and was all performed by
engagement teams in Dublin and Mozambique.
Other information
The directors are responsible for the preparation of the other
information presented in the Annual Report together with the
financial statements. The other information comprises the
information included in the directors’ report and the non-financial
statement included on the Group’s website at https://www.
kenmareresources.com/en and Directors’ Report, the Business
Overview, Strategic Report and Governance sections of the
Annual Report, as well as the Directors’ Responsibility Statement,
Shareholder profile, Glossary - alternative performance measures,
Glossary – terms, and General information.
The financial statements and our auditor’s report thereon do
not comprise part of the other information. Our opinion on the
financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether, based on our financial statements audit work,
the information therein is materially misstated or inconsistent with
the financial statements or our audit knowledge. Based solely on
that work we have not identified material misstatements in the
other information.
Based solely on our work on the other information undertaken
during the course of the audit we report that, in those parts of the
directors’ report specified for our consideration:
we have not identified material misstatements in the directors’
report;
in our opinion, the information given in the directors’ report is
consistent with the financial statements; and
in our opinion, the directors’ report has been prepared in
accordance with the Companies Act 2014.
Corporate governance statement
We have reviewed the directors’ statement in relation to going
concern, longer-term viability, that part of the Corporate
Governance Statement relating to the Company’s compliance with
the provisions of the UK Corporate Governance Code and the
Irish Corporate Governance Annex specified for our review by the
Listing Rules of Euronext Dublin and the UK Listing Authority.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
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FINANCIAL STATEMENTS
Directors’ statement with regards the appropriateness of
adopting the going concern basis of accounting and any
material uncertainties identified set out on page 141;
Directors’ explanation as to their assessment of the Group’s
prospects, the period this assessment covers and why the
period is appropriate set out on page 141;
Director’s statement on whether it has a reasonable
expectation that the Group will be able to continue in operation
and meets its liabilities set out on page 141;
Directors’ statement on fair, balanced and understandable
and the information necessary for shareholders to assess
the Group’s position and performance, business model and
strategy set out on page 120;
Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks and the
disclosures in the annual report that describe the principal
risks and the procedures in place to identify emerging risks
and explain how they are being managed or mitigated set out
on page 121;
Section of the annual report that describes the review of
effectiveness of risk management and internal control systems
set out on page 121; and;
Section describing the work of the audit and risk committee
set out on pages 118 to 123.
The Listing Rules of Euronext Dublin also requires us to review
certain elements of disclosures in the report to shareholders by
the Board of Directors’ remuneration committee.
We have nothing to report in this regard.
In addition as required by the Companies Act 2014, we report,
in relation to information given in the Corporate Governance
Statement on page 142, that:
based on the work undertaken for our audit, in our opinion,
the description of the main features of internal control and
risk management systems in relation to the financial reporting
process, and information relating to voting rights and other
matters required by the European Communities (Takeover Bids
(Directive 2004/EC) Regulations 2006 and specified for our
consideration, is consistent with the financial statements and
has been prepared in accordance with the Act;
based on our knowledge and understanding of the Company
and its environment obtained in the course of our audit,
we have not identified any material misstatements in that
information; and
the Corporate Governance Statement contains the information
required by the European Union (Disclosure of Non-Financial
and Diversity Information by certain large undertakings and
groups) Regulations 2017.
We also report that, based on work undertaken for our audit, the
information required by the Act is contained in the Corporate
Governance Statement.
Our opinions on other matters prescribed by
the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we
consider necessary for the purposes of our audit.
In our opinion the accounting records of the Company were
sufficient to permit the financial statements to be readily and
properly audited and the financial statements are in agreement
with the accounting records.
We have nothing to report on other matters on
which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our
opinion:
the disclosures of directors’ remuneration and transactions
required by Sections 305 to 312 of the Act are not made.
the Company has not provided the information required by
Section 1110N in relation to its remuneration report for the
financial year December 31, 2022;
the Company has not provided the information required
by section 5(2) to (7) of the European Union (Disclosure
of Non-Financial and Diversity Information by certain large
undertakings and groups) Regulations 2017 for the year
ended December 31, 2022 as required by the European
Union (Disclosure of Non-Financial and Diversity Information
by certain large undertakings and groups) (amendment)
Regulations 2018.
We have nothing to report in this regard.
Respective responsibilities and
restrictions on use
Responsibilities of directors for the financial
statements
As explained more fully in the directors’ responsibilities statement
set out on page 146, the directors are responsible for: the
preparation of the financial statements including being satisfied
that they give a true and fair view; such internal control as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error; assessing the Group and Company’s ability
to continue as a going concern, disclosing, as applicable, matters
related to going concern; and using the going concern basis of
accounting unless they either intend to liquidate the Group or the
Company or to cease operations, or have no realistic alternative but
to do so.
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INDEPENDENT AUDITOR’S REPORT CONTINUED
TO THE MEMBERS OF KENMARE RESOURCES PLC
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a high level
of assurance, but is not a guarantee that an audit conducted
in accordance with ISAs (Ireland) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or
error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
A fuller description of our responsibilities is provided on
IAASA’s website at https://iaasa.ie/publications/description-
of-the-auditors-responsibilities-for-the-audit-of-the-financial-
statements/.
The purpose of our audit work and to whom we
owe our responsibilities
Our report is made solely to the Company’s members, as a body,
in accordance with Section 391 of the Companies Act 2014. Our
audit work has been undertaken so that we might state to the
Company’s members those matters we are required to state
to them in an auditor’s report and for no other purpose. To the
fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the
Company’s members, as a body, for our audit work, for this report,
or for the opinions we have formed.
Keith Watt
for and on behalf of
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
D02 DE03
3 April 2024
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Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
NOTES
| 2023 | 2022 | ||
| $’000 | $’000 | ||
Revenue | 2 | ||
Cost of sales | 4 | ( | ( |
Gross profit | |||
Administration expenses | 4 | ( | ( |
Operating profit | |||
Finance income | 8 | ||
Finance costs | 8 | ( | ( |
Profit before tax | |||
Income tax expense | 9 | ( | ( |
Profit for the financial year and total comprehensive income for the financial year | |||
Attributable to equity holders | |||
$ PER SHARE | $ PER SHARE | ||
Basic earnings per share | 10 | ||
Diluted earnings per share | 10 |
The accompanying notes form part of these financial statements.
154
Kenmare Resources plc Annual Report and Accounts 2023
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
NOTES
| 2023 | 2022 | ||
| $’000 | $’000 | ||
| Assets | |||
| Non-current assets | |||
Property, plant and equipment | 11 | ||
Right-of-use assets | 12 | ||
| Current assets | |||
Inventories | 13 | ||
Trade and other receivables | 14 | ||
Cash and cash equivalents | 15 | ||
Total assets | |||
| Equity | |||
Capital and reserves attributable to the Company’s equity holders | |||
Called-up share capital | 16 | ||
Share premium | 17 | ||
Other reserves | 18 | ||
Retained earnings | 19 | ||
Total equity | |||
| Liabilities | |||
| Non-current liabilities | |||
Bank loans | 20 | ||
Lease liabilities | 12 | ||
Provisions | 21 | ||
| Current liabilities | |||
Bank loans | 20 | ||
Lease liabilities | 12 | ||
Trade and other payables | 22 | ||
Current tax liabilities | 23 | ||
Provisions | 21 | ||
Total liabilities | |||
Total equity and liabilities |
The accompanying notes form part of these financial statements.
On behalf of the Board:
M. Carvill T. Hickey
DIRECTOR DIRECTOR
3 April 2024 3 April 2024
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FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
| CALLED-UP | |||||
| SHARE | SHARE | OTHER | RETAINED | ||
| CAPITAL | PREMIUM | RESERVES* | EARNINGS | TOTAL | |
| $’000 | $’000 | $’000 | $’000 | $’000 | |
Balance at 1 January 2022 | |||||
| Total comprehensive income for the year | |||||
Profit for the financial year | |||||
Total comprehensive income for the year | |||||
Transactions with owners of the Company - Contributions and distributions | |||||
Recognition of share-based payment expense (Note 6) | |||||
Exercise of share-based payment awards | ( | ( | |||
| Shares acquired by the Kenmare Employee Benefit | |||||
Trust (Note 16) | ( | ( | |||
| Shares distributed by the Kenmare Employee Benefit | |||||
Trust (Note 16) | |||||
Odd lot offer share buy back (Note 18) | ( | ||||
Odd lot offer share buy back transaction costs (Note 16) | ( | ( | |||
Cancellation of treasury shares | ( | ( | |||
Dividends paid (Note 19) | ( | ( | |||
Total contributions and distributions | ( | ( | |||
Balance at 1 January 2023 | |||||
| Total comprehensive income for the year | |||||
Profit for the financial year | |||||
Total comprehensive income for the year | |||||
Transactions with owners of the Company - Contributions and distributions | |||||
Recognition of share-based payment expense (Note 6) | |||||
Exercise of share-based payment awards | ( | ( | ( | ||
| Shares acquired by the Kenmare Employee Benefit | |||||
Trust (Note 18) | ( | ( | |||
| Shares distributed by the Kenmare Employee Benefit | |||||
Trust (Note 18) | |||||
Tender offer share buy back (Note 16) | ( | ( | ( | ||
Share buy back transaction costs (Note 16) | |||||
Dividends paid (Note 19) | ( | ( | |||
Total contributions and distributions | ( | ( | ( | ( | |
Balance at 31 December 2023 |
* An analysis of other reserves is provided in Note 18.
156
Kenmare Resources plc Annual Report and Accounts 2023
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
NOTES
| 2023 | 2022 | ||
| $’000 | $’000 | ||
| Cash flows from operating activities | |||
Profit for the financial year after tax | |||
| Adjustment for: | |||
Foreign exchange movement included in operating costs | |||
Expected credit losses | 24 | ||
Share-based payments | |||
Finance income | 8 | ( | ( |
Finance costs | 8 | ||
Income tax expense | 9 | ||
Depreciation | 11, 12 | ||
| Change in: | |||
Provisions | ( | ||
Inventories | ( | ( | |
Trade and other receivables | ( | ( | |
Trade and other payables | ( | ||
Exercise of share-based payment awards | ( | ( | |
Cash generated from operating activities | |||
Income tax paid | ( | ( | |
Interest received | |||
Interest paid | 12, 20 | ( | ( |
Factoring and other trade facility fees | 8 | ( | ( |
Debt commitment fees paid and other fees | 8 | ( | ( |
Net cash from operating activities | |||
| Investing activities | |||
Additions to property, plant and equipment | 11 | ( | ( |
Net cash used in investing activities | ( | ( | |
| Financing activities | |||
Dividends paid | 19 | ( | ( |
Odd lot offer share buy back | 16 | ( | |
Odd lot offer share buy back transaction costs | 16 | ( | |
Tender offer share buy back | 18 | ( | |
Tender offer share buy back transaction costs | 18 | ||
Market purchase of equity under Kenmare Restricted Share Plan | 18 | ( | ( |
Drawdown of debt | 20 | ||
Repayment of debt | 20 | ( | ( |
Payment of lease liabilities | ( | ( | |
Net cash used in financing activities | ( | ( | |
Net (decrease) / increase in cash and cash equivalents | ( | ||
Cash and cash equivalents at the beginning of the financial year | |||
Effect of exchange rate changes on cash and cash equivalents | ( | ||
Cash and cash equivalents at the end of the financial year | 15 |
157
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
1. Statement of accounting policies
158
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
Basis of accounting
159
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
1. Statement of accounting policies CONTINUED
160
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
161
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
1. Statement of accounting policies CONTINUED
162
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
163
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
1. Statement of accounting policies CONTINUED
164
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
165
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
1. Statement of accounting policies CONTINUED
2. Revenue
| 2023 | 2022 | |
| $’000 | $’000 | |
| Revenue from contracts with customers | ||
Revenue derived from the sale of mineral products | 437,091 | 498,339 |
Revenue derived from freight services | 21,386 | 27,649 |
Total Revenue | 458,477 | 525,988 |
Revenue by mineral product
The principal categories for disaggregating mineral products revenue are by product type and by country of the customer’s location.
The mineral product types are ilmenite, zircon, rutile and concentrates. Concentrates includes secondary zircon and mineral sands
concentrates.
During the financial year, the Group sold 1,045,200 tonnes (2022: 1,075,600 tonnes) of finished products to customers at a sales value of
$437.1 million (2022: $498.3 million). The Group earned revenue derived from freight services of $21.4 million (2022: $27.6 million).
| 2023 | 2022 | |
| $’000 | $’000 | |
| Revenue derived from sales of mineral products by primary product | ||
Ilmenite | 315,138 | 347,446 |
Primary zircon | 79,628 | 99,152 |
Concentrates | 31,046 | 33,057 |
Rutile | 11,279 | 18,684 |
Total revenue from mineral products | 437,091 | 498,339 |
Revenue derived from freight services | 21,386 | 27,649 |
Total Revenue | 458,477 | 525,988 |
Revenue by destination
In the following table, revenue is disaggregated by primary geographical market. The Group allocates revenue from external customers to
individual countries and discloses revenues in each country where revenues represent 10% or more of the Group’s total revenue. Where
total disclosed revenue disaggregated by country constitutes less than 75% of total Group revenue, additional disclosures are made on a
regional basis until at least 75% of the Group’s disaggregated revenue is disclosed. There were no individual countries within Europe, Asia
(excluding China) or the Rest of the World with revenues representing 10% or more of the Group’s total revenue during the year.
| 2023 | 2022 | |
| $’000 | $’000 | |
| Revenue derived from sales of mineral product by destination | ||
China | 177,511 | 154,704 |
Europe | 86,238 | 130,440 |
Asia (excluding China) | 76,535 | 108,487 |
USA | 52,826 | 51,600 |
Rest of the World | 43,981 | 53,108 |
Total revenue from mineral products | 437,091 | 498,339 |
Revenue derived from freight services | 21,386 | 27,649 |
Total Revenue | 458,477 | 525,988 |
166
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
Revenue by major customers
The Group evaluates the concentration of mineral product revenue by major customer. The following table disaggregates mineral product
revenue from the Group’s four largest customers.
| 2023 | 2022 | |
| $’000 | $’000 | |
| Revenue from external customers | ||
Largest customer | 69,023 | 74,671 |
Second largest customer | 41,616 | 62,791 |
Third largest customer | 32,999 | 58,413 |
Fourth largest customer | 31,844 | 41,015 |
Total | 175,482 | 236,890 |
All Group revenues from external customers are generated by the Moma Titanium Minerals Mine in Mozambique. Further details on this
operating segment can be found in Note 3. Sales to and from Ireland were $nil (2022: $nil) in the year.
3. Segment reporting
Information on the operations of the Moma Titanium Minerals Mine in Mozambique is reported to the Group’s Board for the purposes of
resource allocation and assessment of segment performance. Information regarding the Group’s operating segment is reported below:
2023 | 2022 | |||||
| CORPORATE | MOZAMBIQUE | TOTAL | CORPORATE | MOZAMBIQUE | TOTAL | |
| $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| Revenue & Results | ||||||
Revenue* | – | 458,477 | 458,477 | – | 525,988 | 525,988 |
Cost of sales | – | (294,927) | (294,927) | – | (282,694) | (282,694) |
Gross profit | – | 163,550 | 163,550 | – | 243,294 | 243,294 |
Administrative expenses | (6,867) | (1,559) | (8,426) | (7,848) | (2,014) | (9,862) |
Segment operating profit | (6,867) | 161,991 | 155,124 | (7,848) | 241,280 | 233,432 |
Finance income | 2,585 | 3,319 | 5,904 | 23 | 1,124 | 1,147 |
Finance expenses | (40) | (11,078) | (11,118) | (83) | (12,389) | (12,472) |
Profit before tax | (4,322) | 154,232 | 149,910 | (7,908) | 230,015 | 222,107 |
Income tax expense | (7,156) | (11,772) | (18,928) | (1,601) | (14,472) | (16,073) |
Profit for the financial year | (11,478) | 142,460 | 130,982 | (9,509) | 215,543 | 206,034 |
| Segment assets & Liabilities | ||||||
Segment Assets | 40,918 | 1,220,253 | 1,261,171 | 12,583 | 1,236,244 | 1,248,827 |
Segment Liabilities | 10,392 | 107,488 | 117,880 | 4,722 | 140,571 | 145,293 |
| Additions to non-current assets | ||||||
| Segment Additions to non-current | ||||||
assets | – | 69,730 | 69,730 | – | 59,867 | 59,867 |
* Revenue excludes inter-segment revenue of $22.7 million (2022: $24.2 million) earned by the corporate segment relating to marketing and management services fee income.
Inter-segment revenue is not regularly reviewed by the Chief Operating Decision Maker.
Corporate assets consist of the Company’s property, plant and equipment including right-of-use assets, cash and cash equivalents and
prepayments at the reporting date. Corporate liabilities consist of trade and other payables at the reporting date.
167
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FINANCIAL STATEMENTS
| 2023 | 2022 | |
| $’000 | $’000 | |
| Expenses by function | ||
Cost of sales | 294,927 | 282,694 |
Administrative expenses | 8,426 | 9,862 |
Total | 303,353 | 292,556 |
| 2023 | 2022 | |
| $’000 | $’000 | |
| Expenses by nature | ||
Staff costs | 58,252 | 55,907 |
Repairs and maintenance | 42,278 | 43,151 |
Power and fuel | 47,791 | 43,960 |
Freight | 21,386 | 27,649 |
Other production and operating costs | 83,274 | 78,921 |
Movement of mineral products inventory | (14,750) | (21,628) |
Depreciation of property, plant and equipment and right-of-use assets | 65,122 | 64,596 |
Total | 303,353 | 292,556 |
| 2023 | 2022 | |
| $’000 | $’000 | |
Wages and salaries | 51,864 | 47,698 |
Share-based payments | 3,278 | 5,601 |
Social insurance costs | 3,201 | 2,764 |
Retirement benefit costs | 755 | 706 |
59,098 | 57,769 |
| 2023 | 2022 | |
| HEADCOUNT | HEADCOUNT | |
Management and administration | 384 | 347 |
Operations | 1,303 | 1,315 |
1,687 | 1,662 |
168
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
6. Share-based payments
Share-based payment expense recognised in the consolidated income statement:
| 2023 | 2022 | |
| $’000 | $’000 | |
Expense arising from the Kenmare Restricted Share Plan | 3,278 | 5,601 |
The Group, under its incentive plan known as the Kenmare Restricted Share Plan (KRSP), grants equity-settled share-based payments to
employees as part of their remuneration.
In the case of the Executive Directors’, KRSP awards made prior to 2020 vest, subject to continued employment, 60% on the third
anniversary of grant date, 20% on fourth anniversary, and 20% on fifth anniversary.
The Executive Director awards granted from 2020 onwards vest, subject to continued employment and to the Remuneration Committee’s
assessment against a discretionary underpin, on the third anniversary of grant date. The vested KRSP awards are subject to a two-year
holding period which may extend beyond an Executive Director’s cessation of employment in accordance with the post-employment
holding requirements of the 2020 remuneration policy.
The discretionary underpin contains six core elements which the Remuneration Committee will consider including operational
performance, share price performance, ESG performance, major strategic or project decisions, and the long-term strategic vision for the
Company. The committee has not set fixed, quantitative underpins in respect of these factors. As such, these elements including share
price performance are considered non-market performance conditions and accordingly are not reflected in the grant date fair value. The
grant date of awards containing a discretionary underpin is deemed to occur when a shared understanding of the award is obtained by all
parties and this generally occurs upon the Remuneration Committees assessment of the Group’s performance in the year of vesting.
In addition, in the case of Executive Directors, where the annual bonus achieved exceeds 50% of base salary, Executive Directors are
granted restricted shares under the KRSP in respect of the excess outcome above this level. Such restricted shares would not be subject
to forfeiture or the discretionary underpin.
For other Group employees, awards under the KRSP vest, subject to continued employment, on the third anniversary of award.
| NUMBER OF | NUMBER OF | |
| SHARES | SHARES | |
| 2023 | 2022 | |
Awards outstanding at the beginning of the financial year | 2,562,203 | 2,284,429 |
Awards issued during the financial year | 943,670 | 927,832 |
Awards exercised during the financial year | (1,093,552) | (540,973) |
Awards forfeited during the financial year | (116,466) | (31,530) |
Awards cancelled during the financial year | (21,479) | (77,555) |
Awards Outstanding at the end of the financial year | 2,274,376 | 2,562,203 |
Awards Exercisable at the end of the financial year | 26,673 | 22,588 |
In 2023, awards in respect of 676,892 shares were granted to employees under the 2023 KRSP award. The estimated fair value of
the shares awarded is $3.9 million. During the year 266,778 shares were granted in the form of dividend equivalents. The fair value is
determined using the share price on the date of the award.
In 2023, awards in respect of 1,093,552 shares (2022: 540,973) were exercised under the KRSP award. 1,002,415 awards (2022: 295,443)
were exercised in equity through shares held by the Kenmare Employee Benefit Trust as described in Note 18 and 91,137 awards (2022:
245,443) were settled in cash resulting in a total cost of exercise of share based payments of $5.7 million (2022: $3.4 million).
169
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
7. Auditor’s remuneration
The analysis of the auditor’s remuneration is as follows:
| 2023 | 2022 | |
| $’000 | $’000 | |
| Audit fees | ||
Audit of the Company’s financial statements | 22 | 18 |
Audit of the Company’s subsidiary undertakings | 220 | 162 |
Total audit fee | 242 | 180 |
| Non-audit fees | ||
Other assurance services | 80 | 76 |
Taxation compliance services | 10 | 10 |
Other non-audit services | 11 | 11 |
Total non-audit fees | 101 | 97 |
Total fees | 343 | 277 |
$176,200 (2022: $116,300) of the total fee was paid to KPMG Dublin and $166,600 (2022: $160,900) of the total fee was paid to
KPMG Maputo.
| 2023 | 2022 | |
| $’000 | $’000 | |
| Finance costs | ||
Interest on bank borrowings | (7,935) | (8,829) |
Interest on lease liabilities | (112) | (147) |
Factoring and other trade facility fees | (1,467) | (2,218) |
Commitment and other fees | (928) | (534) |
Unwinding of discount on mine closure provision | (676) | (744) |
Total finance costs | (11,118) | (12,472) |
Interest earned on bank deposits | 5,904 | 657 |
Foreign exchange gain | – | 490 |
Total finance income | 5,904 | 1,147 |
Net finance costs recognised in profit or loss | (5,214) | (11,325) |
170
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
9. Income tax expense
| 2023 | 2022 | |
| $’000 | $’000 | |
Corporation tax | 18,928 | 16,073 |
Deferred tax | – | – |
Total | 18,928 | 16,073 |
| Reconciliation of effective tax rate | ||
Profit before tax | 149,910 | 222,107 |
Profit before tax multiplied by the applicable tax rate (12.5%) | 18,739 | 27,763 |
(Over)/under provision in respect of prior years | (219) | 546 |
Non-taxable income | (9,434) | (18,120) |
Non-deductible expenses | 1,204 | 483 |
Differences in effective tax rates on overseas earnings | 8,638 | 5,401 |
Total | 18,928 | 16,073 |
During the year, Kenmare Moma Mining Limited Mozambique Branch had taxable profits of $34.1 million (2022: $39.9 million), resulting in
an income tax expense of $11.7 million (2022: $14.5 million) being recognised. The income tax rate applicable to taxable profits of KMML
Mozambique Branch is 35% (2022: 35%).
Kenmare Moma Mining Limited Mozambique Branch has elected, and the fiscal regime applicable to mining allows for, the option to
deduct, as an allowable deduction, depreciation of exploration and development expense and capital expenditure over the life of mine.
Tax losses may be carried forward for three years. There are no tax losses carried forward at 31 December 2023.
Kenmare Moma Processing (Mauritius) Limited Mozambique Branch has Industrial Free Zone (IFZ) status. As an IFZ Branch, it is
exempted from corporation taxes and hence its income is non-taxable.
During the year, Kenmare Resources plc had taxable profits of $89.2 million (2022: $13.3 million) as a result of management and marketing
service fee income earned on services provided to subsidiary undertakings and dividend income earned from subsidiary undertakings,
resulting in a corporate tax expense of $7.2 million (2022: $1.6 million).
| 2023 | 2022 | |
| $’000 | $’000 | |
Profit for the financial year attributable to equity holders of the Company | 130,982 | 206,034 |
| 2023 | 2022 | |
| NUMBER OF | NUMBER OF | |
| SHARES | SHARES | |
Weighted average number of issued ordinary shares for the purpose of basic earnings per share | 93,126,115 | 94,919,944 |
| Effect of dilutive potential ordinary shares: | ||
Share awards | 2,437,495 | 2,361,819 |
Weighted average number of ordinary shares for the purposes of diluted earnings per share | 95,563,610 | 97,281,763 |
$ PER SHARE | $ PER SHARE | |
Basic earnings per share | 1.41 | 2.17 |
Diluted earnings per share | 1.37 | 2.12 |
171
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
11. Property, plant and equipment
| PLANT AND | DEVELOPMENT | CONSTRUCTION | OTHER | ||
| EQUIPMENT | EXPENDITURE | IN PROGRESS | ASSETS | TOTAL | |
| $’000 | $’000 | $’000 | $’000 | $’000 | |
| Cost | |||||
At 1 January 2022 | 1,017,429 | 258,172 | 61,430 | 64,431 | 1,401,462 |
Additions during the financial year | 252 | 112 | 59,261 | 242 | 59,867 |
Transfer from construction in progress | 48,233 | 1,767 | (69,918) | 19,918 | – |
Disposals | (10,230) | – | – | (7,201) | (17,431) |
Adjustment to mine closure cost | (20,080) | – | – | – | (20,080) |
At 31 December 2022 | 1,035,604 | 260,051 | 50,773 | 77,390 | 1,423,818 |
Additions during the financial year | – | – | 69,703 | 27 | 69,730 |
Transfer from construction in progress | 20,144 | 13,095 | (40,391) | 7,152 | – |
Disposals | (415) | – | – | (9,429) | (9,844) |
Adjustment to mine closure cost | 241 | – | – | – | 241 |
At 31 December 2023 | 1,055,574 | 273,146 | 80,085 | 75,140 | 1,483,945 |
| Accumulated depreciation | |||||
At 1 January 2022 | 270,113 | 141,489 | – | 35,302 | 446,904 |
Charge for the financial year | 44,435 | 6,379 | – | 12,772 | 63,586 |
Disposals | (10,230) | – | – | (7,201) | (17,431) |
At 31 December 2022 | 304,318 | 147,868 | – | 40,873 | 493,059 |
Charge for the financial year | 44,928 | 8,952 | – | 11,002 | 64,882 |
Disposals | (415) | – | – | (9,429) | (9,844) |
At 31 December 2023 | 348,831 | 156,820 | – | 42,446 | 548,097 |
| Carrying amount | |||||
At 31 December 2023 | 706,743 | 116,326 | 80,085 | 32,694 | 935,848 |
At 31 December 2022 | 731,286 | 112,183 | 50,773 | 36,517 | 930,759 |
An adjustment to the mine closure cost of $0.2 million (2022: $20.1 million) was made during the year as a result of an update in the mine
closure cost estimate as detailed in Note 21.
At each reporting date, the Group assesses whether there is any indication that property, plant and equipment may be impaired. The
Group considers the relationship between its market capitalisation and its book value, among other factors, when reviewing for indicators
for impairment. As at 31 December 2023, the market capitalisation of the Group was below the book value of net assets, which is
considered an indicator of impairment. The Group carried out an impairment review of property, plant and equipment as at 31 December
2023. As a result of the review, and given the performance and outlook of the Group, no impairment provision was recognised in the
current financial year. No impairment was recognised in the prior financial year. Given the historic volatility in mineral product pricing
and sensitivity of the forecast to mineral product pricing, the discount rate and to a lesser extent operating costs, the impairment loss of
$64.8 million, which was recognised in the consolidated statement of comprehensive income in 2014, was not reversed.
The cash-generating unit for the purpose of impairment testing is the Moma Titanium Minerals Mine. The basis on which the Mine is
assessed is its value in use. The cash flow forecast employed for the value in use computation is from a life of mine financial model. The
recoverable amount obtained from the financial model represents the present value of the future discounted pre-tax, pre-finance cash
flows discounted at 12% (2022: 14%).
172
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
Key assumptions include the following:
• The discount rate is based on the Group’s weighted average cost of capital. This rate is a best estimate of the current market
assessment of the time value of money and the risks specific to the Mine, taking into consideration country risk, currency risk and
price risk. The factors making up the cost of equity and cost of debt have changed from the prior year review, resulting in a discount
rate of 12% (2022: 14%). The Group’s estimation of the country risk premium included in the discount rate has remained unchanged
from the prior year. The Group does not consider it appropriate to apply the full current country risk premium for Mozambique to the
calculation of the Group’s weighted average cost of capital as it believes the specific circumstances which have resulted in the risk
premium increase over the past number of years are not relevant to the specific circumstances of the Moma Mine. Hence, country
risk premium applicable to the calculation of the cost of equity has been adjusted accordingly. Forecast income tax on intercompany
dividends from subsidiary undertakings is assumed to be exempt from 2025, by way of change to tax legislation or alternatively group
restructuring. Using a discount rate of 12.0%, the recoverable amount is greater than the carrying amount by $374.0 million (2022:
$86.9 million). The discount rate is a significant factor in determining the recoverable amount. A 3.5% increase in the discount rate
to 15.5% reduces the recoverable amount by $374.0 million to $nil, assuming all other inputs remain unchanged. The increase in the
recoverable amount from the prior year is a result of increased cash flows over the life of mine as a result of increased forecast revenue
net of increased capital costs and a decrease in the discount rate from 14% to 12%.
• The forecast assumes that all agreements, licences, concessions and approvals relating to the Group’s mining and processing
activities including the Implementation Agreement are in place or will be renewed. The mine plan is based on the Namalope, Nataka,
Pilivili and Mualadi proved and probable reserves and resources. Specific resource material is included only where there is a high
degree of confidence in its economic extraction. The Mine life assumption of 40 years has not changed from the prior year review.
Average annual production is approximately 1.3 million tonnes (2022: 1.2 million tonnes) of ilmenite and co-products zircon, rutile and
concentrates over the life of the Mine. Medium term production over the next three years is approximately 1.1 million tonnes. This
mine plan does not include investment in additional mining capacity. Certain minimum stocks of final and intermediate products are
assumed to be maintained at period ends.
• Product sales prices are based on contract prices as stipulated in marketing agreements with customers, or where contracts are
based on market prices or production is not currently contracted, prices are forecast by the Group taking into account independent
titanium mineral sands expertise provided by TiPMC Solutions and management expectations including general inflation of 2% per
annum. Forecast prices provided by TiPMC Solutions have been reviewed and found to be consistent with other external sources
of information. Average forecast product sales prices have increased over the life of mine from the prior year-end review as a result
of revised forecast pricing. A 9.0% reduction in average sales prices over the life of mine reduces the recoverable amount by $374.0
million to $nil, assuming all other inputs remain unchanged.
• Operating costs are based on approved budget costs for 2024 taking into account the current running costs of the Mine and estimated
forecast inflation for 2024. From 2025 onwards, operating costs are escalated by 2% per annum as management expects inflation
to normalise and average 2% over the life of mine period. Average forecast operating costs has decreased from the prior year-end
review as a result of a reduction in the estimated future power costs and further optimisation of unit price for mining in Nataka. A 6.5%
increase in operating costs over the life of mine reduces the recoverable amount by $374.0 million to $nil, assuming all other inputs
remain unchanged.
Whilst the Group has set ambitions to be net zero by 2040, the full financial impact of the transition plan is still being assessed as
the Group considers how it will work towards meeting this target. The mine financial model includes the cost of using bio-diesel in its
forecast operating costs. The cost of studies on plant electrification and other sustainable methods of operating are also included in
forecast operating and capital cost. No savings associated with the Company’s ambition to become net zero have been factored into
the forecast.
• Capital costs are based on a life of mine capital plan including inflation at 2% per annum from 2025. Average forecast capital costs
have increased and their scheduling has changed from the prior year-end review based on updated sustaining and development
capital plans required to maintain the existing plant over the life of mine. A 47% increase in capital costs over the life of mine reduces
the recoverable amount by $374.0 million to $nil, assuming all other inputs remain unchanged.
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Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
12. Right-of-use assets and lease liabilities
| PLANT AND | LAND AND | ||
| EQUIPMENT | BUILDINGS | TOTAL | |
| $’000 | $’000 | $’000 | |
| Cost | |||
At 1 January 2023 | 3,319 | 2,590 | 5,909 |
Additions | – | – | – |
Disposals | (3,319) | – | (3,319) |
At 31 December 2023 | – | 2,590 | 2,590 |
| Accumulated Depreciation | |||
At 1 January 2023 | 3,319 | 982 | 4,301 |
Depreciation expense | – | 240 | 240 |
Disposals | (3,319) | – | (3,319) |
At 31 December 2023 | – | 1,222 | 1,222 |
| Carrying amount | |||
At 31 December 2023 | – | 1,368 | 1,368 |
At 31 December 2022 | – | 1,608 | 1,608 |
On 1 January 2019, the Group recognised a lease liability of $3.3 million in relation to electricity generators at the Mine. The lease for
the electricity generators was renewed in November 2017 for a five-year period and rental payments were fixed for the five years. The
lease agreement expired in November 2022 and following negotiations the Group completed the acquisition process of the electricity
generators in February 2023.
On 1 January 2019, the Group recognised a lease liability of $1.7 million in respect of the rental of its Irish head office. The lease has a term
of 10 years commencing August 2017 and rental payments are fixed to the end of the lease term. This lease obligation is denominated
in Euros.
In February 2019, the Group recognised a lease liability of $0.4 million in respect of its Mozambican country office in Maputo. The lease
has a seven-year term commencing February 2019 and rental payments are fixed for seven years. This lease obligation is denominated in
US Dollars. The Branch has discounted lease payments using its incremental borrowing rates. The weighted average rate applied is 7%.
In December 2022, the Maputo Office lease was modified and remeasured. The lease term was extended to 10 years commencing 1
December 2022. In addition, additional floor space of 250 square meters was leased as an addendum to the existing lease. The Group has
determined that the lease modification should not be accounted for as a separate lease because the lease payments for the new office
space are not considered commensurate with market rentals for office space of that size and characteristic. The incremental borrowing
rate applied to the remeasured lease is 10.2%.
At each reporting date, the Company assesses whether there is any indication that right-of-use assets may be impaired. No impairment
indicators were identified as at 31 December 2023 or 31 December 2022.
The Group has recognised a rental expense of $12.4 million (2022: $3.9 million) in relation to short term leases of machinery and vehicles
which have not been recognised as a right-of-use asset.
Set out below are the carrying amounts of lease liabilities at each reporting date:
| 2023 | 2022 | |
| $’000 | $’000 | |
Current | 264 | 245 |
Non-current | 1,256 | 1,540 |
Total | 1,520 | 1,785 |
The consolidated income statement includes the following amounts relating to leases:
| 2023 | 2022 | |
| $’000 | $’000 | |
Depreciation expense | 240 | 1,010 |
Interest expense on lease liabilities | 112 | 147 |
Total | 352 | 1,157 |
174
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
| 2023 | 2022 | |
| Reconciliation of movements of lease liabilities to cash flows arising from financing activities | $’000 | $’000 |
| Lease liabilities | ||
Balance at 1 January | 1,785 | 2,178 |
| Cash movements | ||
Lease interest paid | (112) | (147) |
Principal paid | (265) | (1,142) |
| Non-cash movements | ||
Lease modification | – | 749 |
Lease interest accrued | 112 | 147 |
Balance at 31 December | 1,520 | 1,785 |
13. Inventories
| 2023 | 2022 | |
| $’000 | $’000 | |
Mineral products | 58,405 | 43,655 |
Consumable spares | 40,852 | 40,516 |
99,257 | 84,171 |
At 31 December 2023, total final product stock was 259,100 tonnes (2022: 213,500 tonnes). Closing stock of heavy mineral concentrate
was 16,700 tonnes (2022: 18,800 tonnes).
Net realisable value is determined with reference to forecast prices of finished products expected to be achieved. There is no guarantee
that these prices will be achieved in the future, particularly in weak product markets. During the financial year, there was a write-down of
$nil million (2022: $nil) to mineral products charged to cost of sales to value mineral products at net realisable value.
| 2023 | 2022 | |
| $’000 | $’000 | |
Trade receivables | 127,442 | 104,970 |
VAT receivable | 6,377 | 4,527 |
Prepayments | 19,831 | 14,521 |
153,650 | 124,018 |
15. Cash and cash equivalents
| 2023 | 2022 | |
| $’000 | $’000 | |
Bank balances | 71,048 | 108,271 |
Cash and cash equivalents comprise cash balances held for the purposes of meeting short-term cash commitments and investments
which are readily convertible to a known amount of cash and are subject to an insignificant risk of change in value. Where investments
are categorised as cash equivalents, the related balances have a maturity of three months or less from the date of investment.
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FINANCIAL STATEMENTS
| 2023 | 2022 | |
| €’000 | €’000 | |
| Authorised share capital | ||
181,000,000 ordinary shares of €0.001 each | 181 | 181 |
181 | 181 |
| 2023 | 2022 | |||
| $’000 | $’000 | |||
| Allotted, called-up and fully paid | ||||
| Opening balance | ||||
94,829,551 | (2022: | 94,921,970) ordinary shares of €0.001 each | 104 | 104 |
| Acquired and cancelled | ||||
5,601,390 | (2022: | 92,419) ordinary shares of €0.001 each | (7) | – |
| Closing balance | ||||
89,228,161 | (2022: | 94,829,551) ordinary shares of €0.001 each | 97 | 104 |
Total called-up share capital | 97 | 104 | ||
| 2023 | 2022 | |
| $’000 | $’000 | |
Opening balance | 545,950 | 545,950 |
Shares issued during the year | – | – |
Closing balance | 545,950 | 545,950 |
176
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
| SHARE-BASED | ||||
| UNDENOMINATED | OWN | PAYMENT | ||
| CAPITAL | SHARES | RESERVE | TOTAL | |
| $’000 | $’000 | $’000 | $’000 | |
Balance at 1 January 2022 | 226,278 | – | 4,261 | 230,539 |
Recognition of share-based payment expense | – | – | 5,601 | 5,601 |
Exercise of share-based payment awards | – | (3,363) | (3,363) | |
Odd lot offer share buy back (Note 16) | – | 515 | – | 515 |
Cancellation of treasury shares | – | (515) | – | (515) |
Shares acquired by the Kenmare Employee Benefit Trust | – | (1,797) | – | (1,797) |
Shares distributed by the Kenmare Employee Benefit Trust | – | 1,779 | – | 1,779 |
Balance at 1 January 2023 | 226,278 | (18) | 6,499 | 232,759 |
Recognition of share-based payment expense | – | – | 3,278 | 3,278 |
Exercise of share-based payment awards | – | – | (3,512) | (3,512) |
Tender offer share buy back (Note 16) | 7 | (29,963) | – | (29,956) |
Cancellation of treasury shares | – | 29,963 | – | 29,963 |
Shares acquired by the Kenmare Employee Benefit Trust | – | (6,182) | – | (6,182) |
Shares distributed by the Kenmare Employee Benefit Trust | – | 3,390 | – | 3,390 |
Balance at 31 December 2023 | 226,285 | (2,810) | 6,265 | 229,740 |
| 2023 | 2022 | |
| NO. OF | NO. OF | |
| SHARES | SHARES | |
At 1 January | 3,034 | – |
Tender offer share buy back | 5,601,390 | – |
Odd lot offer share buy back | – | 92,419 |
Cancellation of treasury shares | (5,601,390) | (92,419) |
Shares acquired by the Kenmare Employee Benefit Trust | 1,206,909 | 298,477 |
Shares distributed by the Kenmare Employee Benefit Trust | (661,892) | (295,443) |
Closing balance | 548,051 | 3,034 |
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Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| $’000 | $’000 | |
Opening balance | 324,721 | 154,050 |
Profit for the financial year attributable to equity holders of the Parent | 130,982 | 206,034 |
Tender Offer share buy back (Note 16) | (29,963) | – |
Tender Offer share buy back transaction costs (Note 16) | 572 | – |
Odd lot offer share buy back (Note 16) | – | (515) |
Odd lot offer share buy back transaction costs (Note 16) | – | (122) |
Exercise of share options | (2,197) | – |
Dividends paid | (56,611) | (34,726) |
Closing balance | 367,504 | 324,721 |
20. Bank loans
| 2023 | 2022 | |
| $’000 | $’000 | |
Borrowings | 47,873 | 78,578 |
| The borrowings are repayable as follows: | ||
Less than one year | 33,087 | 33,653 |
Between two and five years | 15,712 | 47,142 |
48,799 | 80,795 | |
Transaction costs | (926) | (2,217) |
Total carrying amount | 47,873 | 78,578 |
Borrowings
On 11 December 2019, the Group entered into debt facilities with Absa Bank Limited (acting through its Corporate and Investment
Banking Division) (“Absa”), The Emerging Africa Infrastructure Fund (part of the Private Infrastructure Development Group) (“EAIF”),
Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division) (“Nedbank”), Rand Merchant Bank and
Standard Bank Group (“Standard Bank”).
The debt facilities comprise a $110 million Term Loan Facility and a $40 million Revolving Credit Facility that share common terms and
a common security package. The finance documentation also accommodates for a Mine Closure Guarantee Facility (provided by either
the existing lenders or other finance providers) of up to $40 million, with the provider(s) of such a facility sharing in the common security
package. The potential total aggregate principal amount of indebtedness secured under the finance documentation is therefore $190
million. The transaction costs for arrangement of the debt facilities amounted to $6.5 million.
The Term Loan Facility has a final maturity date of 11 March 2025. Interest is at SOFR plus 5.40% per annum. Repayment is in seven equal
semi-annual instalments, beginning 11 March 2022.
On 11 November 2023 the Revolving Credit Facility was extended by 12 months and has a final maturity date of 11 December 2024.
Interest is at SOFR plus 4.25% per annum.
The Group entered into a mine closure guarantee facility with Absa Bank Moçambique SA effective from 1 July 2023 for an amount of
$26.6 million. This guarantee shares the security package with the Term Loan Facility and Revolving Credit Facility on a pro rata and pari
passu basis.
The security package consists of (a) security over the Group’s bank accounts (subject to certain exceptions), (b) pledges of the shares
of Kenmare Moma Processing (Mauritius) Limited and Kenmare Moma Mining (Mauritius) Limited (the “Project Companies”), (c) security
over intercompany loans, and (d) Mozambican law security interests over certain rights and agreements with Mozambican authorities,
including over the Implementation Agreement, the Mineral Licensing Contract and the Mining Licence.
178
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
The carrying amount of the secured bank accounts of the Group was $70.9 million as at 31 December 2023 (2022: $102.9 million). The
shares of the Project Companies and intercompany loans are not included in the consolidated statement of financial position as they are
eliminated on consolidation. They, therefore, do not have a carrying amount but, upon enforcement of the pledges on behalf of the lender
group, the shares in the Project Companies would cease to be owned or controlled by the Group. The secured rights and agreements do
not have a carrying amount. They are, however, necessary for the Project Companies to operate the Mine in Mozambique.
At 31 December 2023, total debt of $47.9 million (2022: $78.6 million) was recognised by the Group and $31.4 million of principal
repayments were made against the term loan over the course of the year. Unamortised transaction costs of $0.9 million (2022: $2.2 million)
plus interest amortised of $1.7 million (2022: $2.2 million) were recognised by the Group at 31 December 2023.
Reconciliation of movements of debt to cash flows arising from financing activities
| 2023 | 2022 | |
| $’000 | $’000 | |
| Bank loans | ||
Balance at 1 January | 78,578 | 148,099 |
| Cash movements | ||
Loan interest paid | (7,211) | (6,921) |
Principal paid | (31,429) | (91,429) |
Loan drawn down Non-cash movements | – | 20,000 |
Loan interest accrued | 7,935 | 8,829 |
Balance at 31 December | 47,873 | 78,578 |
Covenants
The finance documents contain a number of representations, covenants and events of default on customary terms, the breach of which
could lead to the secured parties under the finance documentation accelerating the outstanding loans and taking other enforcement
steps, such as the enforcement of some or all of the security interests, which could lead to, in extremis, the Group losing its interest in the
Mine. The most salient of the relevant terms that could lead to acceleration of the loans and/or enforcement of security are the financial
covenants.
All covenants have been complied with during the year. The key financial covenants are detailed below:
| AS AT | AS AT | |||
| 31 DECEMBER | 31 DECEMBER | |||
| 2023 | 2022 | COVENANT | ||
Interest Coverage Ratio | 65.35:1 | 34.96:1 | Not less than | 4.00:1 |
Net Debt to EBITDA | (0.09):1 | (0.09):1 | Not greater than | 2.00:1 |
Debt Service Coverage Ratio | 4.88:1 | 3.11:1 | Not less than | 1.20:1 |
Liquidity | $111,048,000 | $148,271,000 | Not less than | $15,000,000 |
Reserve Tail Ratio | 81% | 81% | Not less than | 30% |
The definition of the covenants under the debt facilities are set out below:
• Interest Coverage Ratio is defined as the ratio of EBITDA to Net Interest Cost.
• Net Debt is defined as total financial indebtedness excluding leases less consolidated cash and cash equivalents.
• The Debt Service Coverage Ratio is the ratio of cash and cash equivalents at the beginning of a reporting period plus available
facilities plus cash generated in the period to debt repayments in the period.
• Liquidity is defined as consolidated cash and cash equivalents plus undrawn amounts of the Revolving Credit Facility.
• Reserve Tail Ratio means the reserve tail ratio, expressed as a percentage of the termination date reserves (estimated remaining
reserves in March 2025) divided by the initial reserves (estimated reserves in December 2019).
179
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
| 2023 | 2022 | |
| $’000 | $’000 | |
Mine closure provision | 17,540 | 16,623 |
Mine rehabilitation provision | 5,462 | 4,121 |
Other provisions | – | – |
23,002 | 20,744 | |
Current | 2,125 | 998 |
Non-current | 20,877 | 19,746 |
23,002 | 20,744 |
| MINE | MINE | |||
| CLOSURE | REHABILITATION | |||
| PROVISION | PROVISION | OTHER | TOTAL | |
| $’000 | $’000 | PROVISIONS | $’000 | |
At 1 January 2022 | 35,959 | 3,998 | 2,264 | 42,221 |
(Decrease)/increase in provision during the financial year | (20,080) | 4,131 | 948 | (15,001) |
Provision utilised during the financial year | – | (4,008) | (3,212) | (7,220) |
Unwinding of the discount | 744 | – | – | 744 |
At 1 January 2023 | 16,623 | 4,121 | – | 20,744 |
Increase in provision during the financial year | 241 | 1,720 | – | 1,961 |
Provision utilised during the financial year | – | (379) | – | (379) |
Unwinding of the discount | 676 | – | – | 676 |
At 31 December 2023 | 17,540 | 5,462 | – | 23,002 |
180
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
| 2023 | 2022 | |
| $’000 | $’000 | |
Trade payables | 6,510 | 7,305 |
Deferred income | 2,752 | 2,740 |
Accruals | 29,302 | 25,248 |
38,564 | 35,293 |
| 2023 | 2022 | |
| $’000 | $’000 | |
Current tax liabilities | 6,921 | 8,893 |
2023 | 2022 | ||||
| CARRYING | CARRYING | ||||
| AMOUNT | FAIR VALUE | AMOUNT | FAIR VALUE | ||
| $’000 | $’000 | $’000 | $’000 | ||
Financial assets at fair value through profit and loss | |||||
| Trade receivables | – | – | 31,188 | 31,188 | Level 2 |
| Financial assets at fair value through OCI | |||||
| Trade receivables | 110,534 | 110,534 | 43,065 | 43,065 | Level 2 |
| Financial assets not measured | |||||
| at fair value | |||||
| Trade receivables | 16,908 | 16,908 | 30,717 | 30,717 | Level 2 |
Cash and cash equivalents | 71,048 | 71,048 | 108,271 | 108,271 | Level 2 |
198,490 | 198,490 | 213,241 | 213,241 | ||
| Financial liabilities not measured | |||||
| at fair value | |||||
Bank loans | 47,873 | 48,799 | 78,578 | 80,795 | Level 2 |
181
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
24. Financial instruments CONTINUED
| 2023 | 2022 | |
| $’000 | $’000 | |
China | 38,693 | 19,009 |
Asia (excluding China) | 24,905 | 17,243 |
Europe | 34,150 | 45,806 |
USA | 29,597 | 22,776 |
Africa | 97 | 136 |
Total | 127,442 | 104,970 |
| 2023 | 2022 | |
| $’000 | $’000 | |
External credit ratings at least Baa3 (Moody’s) | 65,266 | 31,188 |
Other | 63,756 | 75,316 |
Total gross carrying amount | 129,022 | 106,504 |
Loss allowance | (1,580) | (1,534) |
Total | 127,442 | 104,970 |
| MORE THAN | MORE THAN | MORE THAN | |||
| 30 DAYS | 60 DAYS | 90 DAYS | |||
| CURRENT | PAST DUE | PAST DUE | PAST DUE | TOTAL | |
| $’000 | $’000 | $’000 | $’000 | $’000 | |
2023 | 127,383 | – | – | 59 | 127,442 |
2022 | 104,962 | – | – | 8 | 104,970 |
182
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
| GROSS | IMPAIRMENT | |||
| WEIGHT | CARRYING | LOSS | ||
| AVERAGE | AMOUNT | ALLOWANCE | CREDIT | |
| LOSS RATE | $’000 | $’000 | IMPAIRED | |
Other | 2.0% | 63,756 | 1,580 | No |
| GROSS | IMPAIRMENT | |||
| WEIGHT | CARRYING | LOSS | ||
| AVERAGE | AMOUNT | ALLOWANCE | CREDIT | |
| LOSS RATE | $’000 | $’000 | IMPAIRED | |
Other | 2.0% | 75,316 | 1,534 | No |
| 2023 | 2022 | |
| $’000 | $’000 | |
Balance at 1 January | 1,534 | 424 |
Net remeasurement of loss allowance | 46 | 1,110 |
Balance at 31 December | 1,580 | 1,534 |
2023 | 2022 | |||||
LONG-TERM CREDIT RATING | LONG-TERM CREDIT RATING | |||||
$ MILLION | S&P | MOODY’S | $ MILLION | S&P | MOODY’S | |
Nedbank Ltd | 25.8 | BB– | Ba2 | – | – | – |
Barclays Bank plc | 23.2 | A+ / Stable | A1/ Stable | 81.4 | A + | A1/ Stable |
FirstRand Bank Limited | 10.1 | BB– | Ba2 | – | BBB - | Ba2 /Stable |
HSBC Bank plc | – | – | – | 1.0 | AA- / Stable | A1/ Stable |
Absa Bank Mauritius Limited | 4.9 | – | Ba | 20.5 | – | Ba2 /Negative |
183
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
24. Financial instruments CONTINUED
| BETWEEN | ||||
| LESS THAN | TWO AND FIVE | MORE THAN | ||
| TOTAL | ONE YEAR | YEARS | FIVE YEARS | |
| $’000 | $’000 | $’000 | $’000 | |
Bank loans | 48,799 | 33,087 | 15,712 | – |
Lease liabilities | 2,019 | 390 | 1,173 | 456 |
Trade and other payables | 38,564 | 38,564 | – | – |
89,382 | 72,041 | 16,885 | 456 |
| BETWEEN | ||||
| LESS THAN | TWO AND FIVE | MORE THAN | ||
| TOTAL | ONE YEAR | YEARS | FIVE YEARS | |
| $’000 | $’000 | $’000 | $’000 | |
Bank loans | 80,795 | 33,653 | 47,142 | – |
Lease liabilities | 2,409 | 390 | 1,447 | 572 |
Trade and other payables | 35,293 | 35,293 | – | – |
118,497 | 69,336 | 48,589 | 572 |
184
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
| SOUTH | ||||||
| MOZAMBICAN | AFRICAN | AUSTRALIAN | ||||
| METICAL | RAND | EURO | STERLING | DOLLAR | RENMINBI | |
| $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
Trade and other receivables | 12,956 | 1,712 | 338 | 395 | 156 | – |
Cash and cash equivalents | 5,371 | 9,296 | 571 | 499 | 3 | 17 |
Bank loans | – | – | – | – | – | – |
Leases | – | – | (1,255) | – | – | – |
Trade and other payables | (12,919) | (1,741) | (296) | – | – | – |
Net exposure | 5,408 | 9,267 | (642) | 894 | 159 | 17 |
| SOUTH | ||||||
| MOZAMBICAN | AFRICAN | AUSTRALIAN | ||||
| METICAL | RAND | EURO | STERLING | DOLLAR | RENMINBI | |
| $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
Trade and other receivables | 12,172 | 756 | 489 | 72 | 88 | – |
Cash and cash equivalents | 1,397 | 12,894 | 892 | 1,129 | 17 | 34 |
Bank loans | – | – | – | – | – | – |
Leases | – | – | (1,255) | – | – | – |
Trade and other payables | (20,367) | (2,178) | (502) | (10) | – | – |
Net exposure | (6,798) | 11,472 | (376) | 1,191 | 105 | 34 |
| SOUTH | ||||||
| MOZAMBICAN | AFRICAN | AUSTRALIAN | ||||
| METICAL | RAND | EURO | STERLING | DOLLAR | RENMINBI | |
| $’000 | $’000 | $’000 | $’000 | $’000 | $’000 | |
| 31 December 2023 | ||||||
Strengthening | 540 | 927 | (64) | 89 | 16 | 2 |
Weakening | (540) | (927) | 64 | (89) | (16) | (2) |
| 31 December 2022 | ||||||
Strengthening | (680) | 1,147 | (38) | 119 | 11 | 3 |
Weakening | 680 | (1,147) | 38 | (119) | (11) | (3) |
| 2023 | 2022 | |
| $’000 | $’000 | |
Variable rate debt | 48,799 | 80,795 |
185
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
24. Financial instruments CONTINUED
25. Capital management
The Group’s capital management objective is to ensure that entities in the Group will be able to continue as a going concern while
maximising the return to shareholders through the optimisation of debt and equity balances.
The principal activity of the Group is the operation of the Mine. The Group therefore manages its capital to ensure existing operations
are adequately funded and, based on planned mine production levels, that the Mine will continue to achieve positive cash flows allowing
returns to shareholders.
At 31 December 2023, the Group had total debt facilities in place of $150 million (2022: $150 million), details of which are set out in
Note 20.
The Board periodically reviews the capital structure of the Group, including the cost of capital and the risks associated with each class
of capital. The Group manages and, if necessary, adjusts its capital structure taking account of the underlying economic conditions. Any
material adjustments to the Group’s capital structure in terms of the relative proportions of debt and equity are approved by the Board.
The Group is not subject to any externally imposed capital requirements.
The definition of capital/capital structure of the Group consists of debt (which includes bank borrowings as disclosed in Note 20 and
leases as disclosed in Note 12) and equity attributable to equity holders of the Company, comprising issued capital, reserves, retained
profits and other reserves as disclosed in Notes 16 to 19.
| 2023 | 2022 | |
| $’000 | $’000 | |
| Contracts for future expenditure authorised by the Board: | ||
Capital authorised and contracted | 93,664 | 11,535 |
Capital authorised and not contracted | 39,066 | 12,439 |
| 2023 | 2022 | |
| $’000 | $’000 | |
Short-term employee benefits | 2,354 | 2,295 |
Post-employment benefits | 113 | 104 |
Share-based payments | 644 | 837 |
Total benefits | 3,111 | 3,236 |
186
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
28. Kenmare Resources plc
Kenmare Resources Public Company Limited is a public limited company. The place of registration is Ireland and the registered office
address is Styne House, Hatch Street Upper, Dublin 2. The registered number is 37550.
29. Events after the statement of financial position date
New Debt Facility
On 4 March 2024, the Group entered into a $200 million Revolving Credit Facility (“RCF”) provided by Absa Bank Limited (acting through
its Corporate and Investment Banking Division), Nedbank Limited (acting through its Nedbank Corporate and Investment Banking
division) (“Nedbank”), Rand Merchant Bank and Standard Bank Group (“Standard Bank”). The Mandated Lead Arranger in respect of the
Facility was Rand Merchant Bank.
The interest rate is 4.85% plus SOFR with a term of five years. The facility replaces the existing corporate debt facilities that were put
in place in 2019. The facility envisages the debt sharing of security with mine closure guarantee facility of up to $50 million (an increase
from the $40 million facility under the existing facilities).
Proposed dividend
On 19 March 2024, the Board proposed a final dividend of USc38.54 per share. This proposed dividend is subject to approval by the
shareholders at the Annual General Meeting. These financial statements do not reflect this dividend.
30. Approval of financial statements
The financial statements were approved by the Board on 3 April 2024.
187
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
In 2023 Kenmare rehabilitated 187 hectares of previously
mined land as part of its progression rehabilitation
practices. As part of this work, Elton has pioneered
innovative rehabilitation strategies that have enhanced the
survival rates of various plant species. In 2024, he is looking
forward to seeing the continuing results of these trials.
Elton Sacurgy
LAND MANAGEMENT SUPERINTENDENT
188
Kenmare Resources plc Annual Report and Accounts 2023
COMPANY
FINANCIAL
STATEMENTS
Parent Company statement of
financial position
190
Parent Company statement of
changes in equity
191
Notes to the Company financial
statements
192
189
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
NOTES
2023
$’000
2022
$’000
Assets
Non-current assets
Property, plant and equipment 2 384 492
Right-of-use asset 3 682 891
Investments in subsidiaries 4 804,010 802,909
805,076 804,292
Current assets
Amounts due from subsidiary undertakings 5 5,233 47,781
Trade and other receivables 6 315 418
Cash and cash equivalents 7 38,748 9,812
44,296 58,011
Total assets 849,372 862,303
Equity
Capital and reserves attributable to the
Company’s equity holders
Called-up share capital 8 97 104
Share premium 8 545,950 545,950
Other reserves 8 229,740 232,759
Retained earnings 9,226 24,976
Total equity 785,013 803,789
Non-current liabilities
Lease liabilities 3 625 840
Amounts due to subsidiary undertakings 9 54,116 54,116
54,741 54,956
Current liabilities
Amounts due to subsidiary undertakings 9 1,215 1,048
Lease liabilities 3 215 220
Current tax liabilities 11 6,055 1
Trade and other payables 10 2,133 2,289
9,618 3,558
Total liabilities 64,359 58,514
Total equity and liabilities 849,372 862,303
The accompanying notes form part of these financial statements.
On behalf of the Board:
M. Carvill T. Hickey
DIRECTOR DIRECTOR
3 April 2024 3 April 2024
190
Kenmare Resources plc Annual Report and Accounts 2023
PARENT COMPANY STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2023
CALLED-UP
SHARE
CAPITAL
$’000
SHARE
PREMIUM
$’000
OTHER
RESERVES
$’000
RETAINED
EARNINGS
$’000
TOTAL
$’000
Balance at 1 January 2022 104 545,950 230,539 51,716 828,309
Total comprehensive income for the year
Profit for the financial year – – – 8,623 8,623
Total comprehensive income for the year – – – 8,623 8,623
Transactions with owners of the Company
Odd lot offer share buy back – – – (515) (515)
Odd lot offer share buy back transaction costs – – – (122) (122)
Recognition of share-based payment expense – – 5,601 – 5,601
Exercise of share-based payment awards – – (3,363) – (3,363)
Shares acquired by the Kenmare Employee
Benefit Trust – – (1,797) – (1,797)
Shares distributed by the Kenmare Employee
Benefit Trust – – 1,779 – 1,779
Dividends paid – – – (34,726) (34,726)
Total contributions and distributions – – 2,220 (35,363) (33,143)
Balance at 1 January 2023 104 545,950 232,759 24,976 803,789
Total comprehensive income for the year
Profit for the financial year – – – 72,449 72,449
Total comprehensive income for the year – – – 72,449 72,449
Transactions with owners of the Company
Tender offer share buy back (7) – 7 (29,963) (29,963)
Tender offer share buy back transaction costs – – – 572 572
Recognition of share-based payment expense – – 3,278 – 3,278
Exercise of share-based payment awards – – (3,512) (2,197) (5,709)
Shares acquired by the Kenmare Employee Benefit
Trust – – (6,182) – (6,182)
Shares distributed by the Kenmare Employee Benefit
Trust – – 3,390 – 3,390
Dividends paid – – – (56,611) (56,611)
Total contributions and distributions (7) – (3,019) (88,199) (91,225)
Balance at 31 December 2023 97 545,950 229,740 9,226 785,013
191
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
PARENT COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
1. Statement of accounting policies
The Company Financial Statements of Kenmare Resources plc (the “Company”) are prepared on a going concern basis under the historical
cost convention, in accordance with Financial Reporting Standard 101 Reduced Disclosure Framework (‘FRS 101’) and the Companies Act 2014.
In preparing these Financial Statements, the Company applies the recognition, measurement and disclosure requirements of International
Financial Reporting Standards as adopted by the EU (Adopted IFRSs), but makes amendments where necessary in order to comply with
the Companies Act 2014 and has set out below where advantage of the FRS 101 disclosure exemptions has been taken.
The Company has taken advantage of the following disclosure exemptions under FRS 101:
• A cash flow statement and related notes;
• Comparative period reconciliations for tangible fixed assets and share capital;
• Disclosures in respect of transactions with wholly owned subsidiaries;
• Disclosures in respect of capital management;
• The effects of new but not yet effective IFRS; and
• Disclosures in respect of the compensation of key management personnel.
As the consolidated financial statements of the Group are prepared in accordance with IFRS as adopted by the EU and include the
equivalent disclosures, the Company has also taken the exemptions under FRS 101 available in respect of the following disclosures:
• Certain disclosures required by IFRS 2 Share-Based Payments;
• Certain disclosures required by IFRS 13 Fair Value Measurement;
• The disclosures required by IFRS 7 Financial Instruments: Disclosures; and
• Certain disclosures required by IFRS 16 Leases.
In accordance with Section 304(2) of the Companies Act 2014, the Company is availing of the exemption from presenting its individual
statement of comprehensive income to the Annual General Meeting and from filing it with the Companies Registration Office. The
Company’s profit for the financial year determined in accordance with IFRS is $72.5 million (2022: $8.6 million). The profit consists of
income from shares in group undertakings, marketing and management services fee income less administration and other costs.
The financial statements have been prepared in US Dollars and are rounded to the nearest thousand.
The principal accounting policies adopted are the same as those set out for the Group financial statements except as noted below. The
accounting policies have, unless otherwise stated, been applied consistently to all periods presented in these financial statements.
Accounting policies applying only to the Company financial statements
Investments in subsidiaries
Investments in subsidiary undertakings are accounted for under IAS 27 Separate Financial Statements. Investments in subsidiaries are
recognised at cost less impairment.
Equity-settled share-based payments granted by the Company to employees of subsidiary companies are accounted for as an increase in
the carrying value of the investment in subsidiary companies and the share based payment reserve.
Where the Company enters into financial guarantee contracts to guarantee the indebtedness of companies within the Group, the financial
guarantee liability is initially measured at its fair value. The fair value of a financial guarantee contract is determined as the present value
of the cost of the guarantee for the total debt facility.
At each reporting date the financial guarantee liability is subsequently measured at the higher of (i) the amount initially recognised less
the cumulative amount of income recognised in accordance with the principles of IFRS 15 Revenue from Contracts with Customers and
(ii) the loss allowance i.e. the expected credit losses under IFRS 9 Financial Instruments.
Impairment of investments in subsidiaries
At each reporting date, the Company reviews the carrying amounts of its investments in subsidiaries to determine whether there is
any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset
is estimated in order to determine the extent of the impairment loss (if any). Where the asset does not generate cash flows that are
independent from other assets, the Company estimates the recoverable amount of the cash-generating unit to which the asset belongs.
The recoverable amount is the higher of fair value less costs to sell and value in use. Fair value less costs to sell is the price that would be
received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. In assessing
value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset for which the estimates of future cash flows have not been adjusted.
If the recoverable amount of the asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of
the asset (or cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised as an expense immediately.
192
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE COMPANY FINANCIAL STATEMENTS
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating unit) is increased to the revised
estimate of its recoverable amount, but so that the increased carrying amount does not exceed the carrying amount that would have
been determined had no impairment loss been recognised for the asset (or cash-generating unit) in prior financial years. A reversal of an
impairment loss is recognised as income immediately.
Amounts due from subsidiary undertakings
Amounts due from subsidiaries comprise of loans and borrowings and other receivables. All loans and borrowings are initially recorded at
fair value, net of transaction costs and allowances for expected credit losses. Loans and borrowings are subsequently stated at amortised
cost. Interest income is recognised using the effective interest method calculated by applying the effective interest rate to the gross
carrying amount of a financial asset. Interest income is recognised in profit or loss and is included in the “finance income” line item.
Other receivables due from subsidiaries are initially recognised at their transaction value and subsequently carried at amortised cost, net
of allowance for expected credit loss.
Impairment of amounts due from subsidiary undertakings
The Company recognises a loss allowance for expected credit losses on financial assets. The amount of expected credit losses is
updated at each reporting date to reflect changes in credit risk since initial recognition of the financial asset. When determining whether
the credit risk of a financial asset has increased the Company considers credit risk ratings where available, the Company’s historical
credit loss experience, adjusted for factors that are specific to the counterparts, general economic conditions and an assessment of both
the current as well as the forecast conditions at the reporting date.
The Company considers a financial asset to be in default when there is information indicating that the debtor is in severe financial
difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed in liquidation or has entered into bankruptcy
proceedings. The Company considers a financial asset to be credit-impaired when there is evidence that the debtor is in significant
financial difficulty and the debt is more than 90 days past due.
Amounts due to subsidiary undertakings
Amounts due to subsidiary undertakings are initially measured at fair value and subsequently measured at amortised cost using the
effective interest rate method. The effective interest method is a method of calculating the amortised cost of a financial liability and of
allocating interest expense over the relevant period. The effective interest rate is the rate that exactly discounts estimated future cash
payments (including all fees, transaction costs and other premiums or discounts) through the expected life of the financial liability, or
(where appropriate) a shorter period, to the amortised cost of a financial liability. The Company derecognises financial liabilities when,
and only when, the Company’s obligations are discharged, cancelled or have expired.
Critical judgements in applying the Company’s accounting policies
In the process of applying the Company’s accounting policies, the Directors have made the following judgements that have the most
significant effect on the amounts recognised in the financial statements.
Impairment of non-current assets
Where there are indicators of impairment of non-current assets, the Company performs impairment tests based on fair value less costs to
sell or a value-in-use calculation. The fair value less costs to sell calculation is based on available data from binding sales transactions in
an arm’s length transaction on similar assets or observable market prices less incremental costs for disposing of the asset. The value-in-
use calculation is based on a discounted cash flow model. The cash flows are derived from the budget and do not include restructuring
activities that are not yet committed to or significant future financial assets that will enhance performance of the financial assets
being tested. The value-in-use calculation is most sensitive to the discount rate used for the discounted cash flow model as well as the
expected future cash flows and the growth rate used for extrapolation purposes. Additionally, in some instances the Company obtains a
third-party valuation of a financial asset and relies on this source if the valuation is current.
193
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
2. Property, plant and equipment
FIXTURES AND
FITTINGS
$’000
MOTOR
VEHICLES
$’000
TOTAL
$’000
Cost
At 1 January 2023 934 131 1,065
At 31 December 2023 934 131 1,065
Accumulated depreciation
At 1 January 2023 442 131 573
Charge for the financial year 108 – 108
At 31 December 2023 550 131 681
Carrying amount
At 31 December 2023 384 – 384
At 1 January 2023 492 – 492
At each reporting date, the Company assesses whether there is any indication that property, plant and equipment may be impaired. No
impairment indicators were identified as at 31 December 2023 or 31 December 2022.
3. Right-of-use assets
LAND &
BUILDINGS
$’000
At 1 January 2022 1,086
Depreciation expense (195)
At 31 December 2022 891
Depreciation expense (209)
At 31 December 2023 682
On 1 January 2019, the Group recognised lease liabilities of $3.3 million in respect of right-of-use assets being its head office at Styne
House, Dublin. The Styne House lease has a term of 10 years commencing August 2017 and rental payments are fixed for the remainder
of the lease term. This lease obligation is denominated in Euros.
At each reporting date, the Company assesses whether there is any indication that right of use assets may be impaired. No impairment
indicators were identified as at 31 December 2023 or 31 December 2022.
Set out below are the carrying amounts of lease liabilities at each reporting date:
2023
$’000
2022
$’000
Current 215 220
Non-current 625 840
Total 840 1,060
The income statement includes the following amounts relating to leases:
2023
$’000
2022
$’000
Depreciation expense 209 195
Interest expense on lease liabilities 40 83
Total 249 278
194
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
4. Investments in subsidiaries
2023
$’000
2022
$’000
Opening balance 802,909 801,098
Capital contribution 1,101 1,811
Closing balance 804,010 802,909
The investment balance of $804.0 million (2022: $802.9 million) comprises an investment in Kenmare Moma Mining (Mauritius) Limited
and Kenmare Moma Processing (Mauritius) Limited, collectively known as “the Project Companies”, in the amount of $792.7 million (2022:
$792.7 million), initial investments of less than $500 in the other subsidiary undertakings of the Company and capital contributions of
$11.3 million (2022: $10.2 million).
The Company has provided loans to the subsidiaries at rates considered favourable to the borrowers. As a result, the Company recognised a
total capital contribution amounting to $3.2 million (2022: $3.2 million) representing the difference between the loan amounts and their fair value
discounted at a market rate of interest of 5%. The total amount recognised as an addition during the year was $nil million (2022: $1.0 million).
The Company is involved in a group share-based payment scheme whereby the Company has an obligation to settle awards relating to
employees of subsidiaries and is therefore considered the settling entity. The Company accounts for the arrangement in accordance with
IAS 27 Separate Financial Statements and recognises an addition to the cost of its investment in the relevant subsidiary undertakings.
The capital contribution relating to share awards of the Project Companies amounts to $8.1 million (2022: $7.0 million). The total amount
recognised as an addition under group share-based payment schemes during the year was $1.1 million (2022: $0.8 million).
The Company has undertaken to guarantee the debt of its subsidiaries. At 31 December 2022, these guarantees were accounted for
in accordance with the requirements of IFRS 4 Insurance Contracts. IFRS 4 Insurance contracts was replaced by IFRS 17 Insurance
Contracts, effective from 1 January 2023.
The replacement requires companies which explicitly asserted that intra-group guarantees were considered insurance contracts, and
accounted for as such, to elect for the application of IFRS 17 Insurance Contracts or IFRS 9 Financial Instruments on a contract-by-
contract basis. The Company has elected to account for intra group guarantees in accordance with IFRS 9 Financial Instruments.
IFRS 9 Financial Instruments requires a financial liability to be measured at its fair value in relation to the intra-group guarantee contracts
at initial recognition, with the corresponding entry recorded as an investment in subsidiary. Subsequently, the financial liability is
measured at the higher of (i) the initial fair value less the cumulative amount of income recognised in accordance with the principles of
IFRS 15 Revenue from Contracts with Customers and (ii) the expected credit loss. Amortisation for the unwinding of the financial liability
is recognised within profit or loss over the period of the guarantee contract.
The guarantee has been valued at nil on the basis it was made to allow funds to flow to the Company from it subsidiary undertakings
without affecting Lender security but not as a realistic mechanism to have debt repaid if the subsidiary undertakings were to default.
The subsidiary undertakings of the Company as at 31 December 2023 are as follows:
PLACE OF
INCORPORATION
PLACE OF
OPERATION
PERCENTAGE
OWNERSHIP
Kenmare C.I. Limited Jersey Jersey 100%
Congolone Heavy Minerals Limited Jersey Mozambique 100%
Kenmare Moma Mining (Mauritius) Limited Mauritius Mozambique 100%
Kenmare Moma Processing (Mauritius) Limited Mauritius Mozambique 100%
Mozambique Minerals Limited Jersey Mozambique 100%
Each of the subsidiary undertakings has issued ordinary shares only. The activities of the above subsidiary undertakings are mining,
mineral exploration, management and development.
The registered office of the Irish company is Styne House, Hatch Street Upper, Dublin 2, D02 DY27. The registered office of the Jersey
companies is Zedra Trust Company (Jersey) Limited, 50 La Colomberie, St. Helier, Jersey. The registered office of the Mauritian
companies is 10th Floor, Standard Chartered Tower, 19 Cybercity, Ebene, Mauritius.
The Company carried out an impairment review of investments in subsidiary undertakings as at 31 December 2023. As a result of the
review, an indicator of impairment was identified in the Company’s investment in Kenmare Moma Processing (Mauritius) Limited and
Kenmare Moma Mining (Mauritius) Limited as a result of the carrying value of the Company’s investment in subsidiaries being in excess
of the Group’s market capitalisation.
In accordance with IAS 36, management calculated the recoverable amount of both investments, which, for the purposes of the
impairment test were considered collectively to form part of a cash-generating unit, namely the Moma Titanium Minerals Mine. As a
result of the impairment review, management concluded that the recoverable amount of the cash-generating unit exceeded the carrying
amount and as such no impairment loss was recorded. Further information on the assumptions used in the impairment test can be found
in Note 11 to the Group Consolidated Financial Statements.
195
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
5. Amounts due from subsidiary undertakings
2023
$’000
2022
$’000
Loans and borrowings – 45,363
Other payables 5,233 2,418
Closing balance 5,233 47,781
Under the terms of a management services agreement and marketing services agreement between the Company and the Project
Companies, the Company earned $9.5 million (2022: $9.2 million) in respect of management services provided during the year to both Project
Companies and $13.1 million (2022: $15.0 million) in respect of marketing services provided during the year to Kenmare Moma Processing
(Mauritius) Limited. The collective amount outstanding at the year end date in relation to these services is $5.2 million (2022: $2.4 million).
During the year, the Project Companies repaid all loans due as set out below. Interest accrued amounted to $0.2 million at 31 December
2023 (2022: $0.3 million). The carrying amount due from subsidiary undertakings represents the maximum credit exposure. Amounts due
from subsidiary undertakings are current (i.e. not overdue). The expected credit losses provided against amounts due from subsidiary
undertakings is $nil million (2022: $0.6 million).
2023
$’000
2022
$’000
Interest at 5.02%, repayable on 20 April 2023 – 25,457
Interest at 5.02%, repayable on 4 June 2023 – 10,250
Interest at 5.02% repayable on 8 June 2023 – 10,250
Net amount due for settlement – 45,957
Expected credit losses – (594)
Closing balance – 45,363
6. Trade and other receivables
2023
$’000
2022
$’000
Prepayments 315 418
7. Cash and cash equivalents
2023
$’000
2022
$’000
Cash at bank and in hand 38,748 9,812
8. Share capital, share premium and other reserves
Relevant disclosures on the Company’s share capital, share premium and other reserves are given in Notes 19 to 21 to the Group
Consolidated Financial Statements.
9. Amounts due to subsidiary undertakings
2023
$’000
2022
$’000
Loans and borrowings 36,636 36,636
Other payables 18,695 18,528
Closing balance 55,331 55,164
Non-current 54,116 54,116
Current 1,215 1,048
Closing balance 55,331 55,164
Loan amounts owed to subsidiary undertakings consist of an amount due to Kenmare C.I. Ltd of $36.6 million (2022: $36.6 million) at the
year end as a result of a Novation and Subscription Deed entered into in 2019. In addition, other payables include an amount of $17.4 million
(2022: $17.4 million) due to Kenmare C.I. Ltd as a result of subsequent inter-group funding. The amounts due to Kenmare C.I. Limited are
interest free and unsecured. Kenmare C.I. Ltd does not intend to demand repayment of the amounts due within one year from the year end.
During the year, costs of $2.3 million (2022: $1.8 million) were recharged to the Company by Kenmare C.I. Limited under a group cost
agreement. The amount due to Kenmare C.I. Ltd under the group cost agreement is $0.8 million (2022: $0.7 million) at the year end.
During the year costs of $0.5 million (2022: $0.5 million) were recharged to the Company by its subsidiary, Mozambique Minerals Limited
under a group cost agreement. The amount due to Mozambique Minerals Ltd is $0.4 million (2022: $0.4 million) at the year end.
196
Kenmare Resources plc Annual Report and Accounts 2023
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
FOR THE FINANCIAL YEAR ENDED 31 DECEMBER 2023
10. Trade and other payables
2023
$’000
2022
$’000
Trade payables 50 6
Accruals 2,083 2,283
2,133 2,289
11. Tax liabilities
2023
$’000
2022
$’000
Tax liabilities 6,055 1
12. Financial risk management
2023 2022
CARRYING
AMOUNT
$’000
FAIR VALUE
$’000
CARRYING
AMOUNT
$’000
FAIR VALUE
$’000
Financial assets not measured at fair value
Loans & borrowings – – 45,363 45,363 Level 2
Cash and cash equivalents 38,748 38,748 9,812 9,812 Level 2
38,748 38,748 55,715 55,715
Financial liabilities not measured at fair value
Loans & borrowings 36,636 36,636 36,636 36,636 Level 2
The carrying amounts and fair values of financial assets and financial liabilities including their levels in fair value hierarchy are detailed
above. The table does not include fair value information for other receivables, prepayments, trade payables and accruals as these are not
measured at fair value as the carrying amount is a reasonable approximation of their fair value.
Credit risk management
Credit risk is the risk of financial loss to the Company’s if a customer or a counterparty to a financial instrument fails to meet it
contractual obligations and arises principally from the Company’s trade receivables from customers. The carrying amount of financial
assets represents the maximum credit exposure. The expected credit losses provided against amounts due from subsidiary undertakings
is $nil (2022: $0.6 million).
Foreign exchange risk management
The Company does not have any material assets or liabilities denominated in any currency other than US Dollars at 31 December 2023 or
at 31 December 2022 which would give rise to a significant transactional currency exposure.
13. Dividends
The dividends paid in respect of ordinary share capital were as follows:
2023
$’000
2022
$’000
Dividends 56,611 34,726
In May 2023, the Company paid a final 2022 dividend of $41.1 million representing USc43.33 per share (2022: USc25.42). In October 2023,
the Company paid a 2023 interim dividend of USc17.5 (2022: USc10.98) per ordinary share, totalling $15.6 million.
14. Events after the statement of financial position
Proposed dividend
On 19 March 2024, the Board proposed a final dividend of USc38.54 per share. This proposed dividend is subject to approval by the
shareholders at the Annual General Meeting. These financial statements do not reflect this dividend.
15. Approval of financial statements
The financial statements were approved by the Board on 3 April 2024.
197
Kenmare Resources plc Annual Report and Accounts 2023
FINANCIAL STATEMENTS
Employees at the Moma Mine received an average of 45
hours of training per person in 2023. Benjamin is Kenmare’s
newly appointed Head of Organisational Development
and in 2024 he’s looking forward to further fostering the
development of individuals as part of a fresh initiative.
Benjamin Chachuaio
HEAD OF ORGANISATIONAL DEVELOPMENT
198
Kenmare Resources plc Annual Report and Accounts 2023
OTHER
INFORMATION
Shareholder profile
200
Glossary – alternative
performance measures
201
Glossary – terms
203
General information
206
199
Kenmare Resources plc Annual Report and Accounts 2023
OTHER INFORMATION
Size of holdings
NO. OF
SHAREHOLDERS
NO. OF
SHARES HELD
1–1,000 610 105,711
1,001–5,000 56 107,570
5,001–25,000 15 161,017
25,001–100,000 2 108,434
Over 100,000 1 88,745,429
Total 684 89,228,161
Geographic distribution of holdings
NO. OF
SHAREHOLDERS
NO. OF
SHARES HELD
Republic of Ireland 200 134,118
Northern Ireland and Great Britain 365 89,068,005
Other 119 26,038
Total 684 89,228,161
200
Kenmare Resources plc Annual Report and Accounts 2023
SHAREHOLDER PROFILE
BASED ON THE REGISTER AS AT 25 MARCH 2024
Certain financial measures set out in the Annual Report to 31 December 2023 are not defined under International Financial Reporting
Standards (IFRS), but represent additional measures used by the Board to assess performance and for reporting both internally and to
shareholders and other external users. Presentation of these Alternative Performance Measures (APMs) provides useful supplemental
information which, when viewed in conjunction with the Group’s IFRS financial information, allows for a more meaningful understanding of
the underlying financial and operating performance of the Group.
These non-IFRS measures should not be considered as an alternative to financial measures as defined under IFRS. Descriptions of the
APMs included in this report, as well as their relevance for the Group, are disclosed below.
APM DESCRIPTION RELEVANCE
EBITDA Operating profit/loss before
depreciation and amortisation
Eliminates the effects of financing, tax and depreciation to allow
assessment of the earnings and performance of the Group
EBITDA margin Percentage of EBITDA to Mineral
Product Revenue
Provides a group margin for the earnings and performance of
the Group
Capital costs Additions to property, plant and
equipment in the period
Provides the amount spent by the Group on additions to property,
plant and equipment in the period
Cash operating cost per
tonne of finished product
produced
Total costs less freight and other non-
cash costs, including depreciation and
inventory movements divided by final
product production (tonnes)
Eliminates the non-cash impact on costs to identify the actual
cash outlay for production and, as production levels increase
or decrease, highlights operational performance by providing a
comparable cash cost per tonne of product produced over time
Cash operating cost per
tonne of ilmenite net of
co-products
Cash operating costs less revenue
of zircon, rutile and mineral sands
concentrates, divided by ilmenite
production (tonnes)
Eliminates the non-cash impact on costs to identify the actual
cash outlay for production and, as production levels increase
or decrease, highlights operational performance by providing a
comparable cash cost per tonne of ilmenite produced over time
Net cash/debt Bank loans before transaction costs,
loan amendment fees and expenses
plus lease liabilities net of cash and
cash equivalents
Measures the amount the Group would have to raise through
refinancing, asset sale or equity issue if its debt were to fall due
immediately, and aids in developing an understanding of the
leveraging of the Group
ROCE Return on capital employed ROCE measures how efficiently the Group generates profits from
investment in its portfolio of assets.
Shareholder returns Dividends and share buy backs Shareholder returns comprise the interim dividend, the proposed
final dividend to be approved by shareholders at the AGM and any
share buy backs
EBITDA
2019
$M
2020
$M
2021
$M
2022
$M
2023
$M
Operating profit 57.3 33.4 151.1 233.4 155.1
Depreciation 33.4 42.3 63.1 64.6 65.2
EBITDA 90.7 75.7 214.2 298.0 220.3
EBITDA margin
2019
$M
2020
$M
2021
$M
2022
$’M
2023
$’M
EBITDA 90.7 75.7 214.2 298.0 220.3
Mineral Product Revenue 255.5 231.5 420.5 498.4 437.1
EBITDA margin (%) 35% 33% 51% 60% 50%
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OTHER INFORMATION
GLOSSARY – ALTERNATIVE PERFORMANCE MEASURES
Cash operating cost per tonne of finished product
2019
$M
2020
$M
2021
$M
2022
$M
2023
$M
Cost of sales 195.7 192.3 295.0 282.7 294.9
Administrative expenses 17.9 18.1 9.8 9.9 8.4
Total operating costs 213.6 210.4 304.8 292.6 303.3
Freight (15.4) (12.2) (35.4) (27.6) (21.4)
Total operating costs less freight 198.2 198.2 267.5 265.0 281.9
Non-cash costs
Depreciation and amortisation (33.4) (42.3) (63.1) (64.6) (65.2)
Expected credit losses - - (0.2) (1.1) -
Share-based payments (1.8) (0.5) (1.1) (2.2) (3.3)
Mineral product inventory movements (4.5) 4.9 (9.3) 21.6 14.7
Total cash operating costs 158.5 160.3 195.7 218.7 228.1
Final product production tonnes 988,300 840,500 1,228,500 1,200,800 1,091,500
Cash operating cost per tonne of finished product $160 $191 $159 $182 $209
Cash operating cost per tonne of ilmenite
2019
$M
2020
$M
2021
$M
2022
$’M
2023
$’M
Total cash operating costs 158.5 160.3 195.7 218.7 228.1
Less revenue from co-products zircon,
rutile and mineral sands concentrate (84.5) (63.2) (85.8) (150.9) (122.0)
Total cash costs less co-product revenue 74.0 97.1 109.9 67.8 106.1
Ilmenite product production tonnes 892,900 756,000 1,119,400 1,088,300 986,300
Cash operating cost per tonne of ilmenite $83 $128 $98 $62 $108
Net cash/debt
2019
$’M
2020
$’M
2021
$’M
2022
$’M
2023
$’M
Bank debt (60.9) (145.8) (148.1) (78.6) (47.9)
Transaction costs (6.6) (5.4) (3.8) (2.2) (0.9)
Gross debt (67.5) (151.2) (151.9) (80.8) (48.8)
Lease liabilities (4.5) (3.4) (2.2) (1.8) (1.5)
Cash and cash equivalents 81.2 87.2 69.1 108.3 71.0
Net cash/(debt) 9.2 (67.4) (85.0) 25.7 20.7
Return on Capital Employed
RESTATED
$M
RESTATED
$M
RESTATED
$M
2022
$’M
2023
$’M
Operating profit 57.3 33.4 151.1 233.4 155.1
Total Equity and Non-Current Liabilities 984.0 1,087.5 1,045.4 1,170.4 1,180.9
ROCE 6% 3% 15% 20% 13%
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Kenmare Resources plc Annual Report and Accounts 2023
GLOSSARY – ALTERNATIVE PERFORMANCE MEASURES CONTINUED
TERM DESCRIPTION
AIFR All injuries frequency rate. Provides the number of injuries at the Mine in the year, per 200,000 hours
worked.
AGM Annual general meeting
CIF The seller delivers when the goods pass the ship’s rail in the port of shipment. Seller must pay the cost
and freight necessary to bring goods to named port of destination. Risk of loss and damage are the
same as CFR. Seller also has to procure marine insurance against buyer’s risk of loss/damage during
the carriage. Seller must clear the goods for export. This term can only be used for sea transport.
CFR This term means the seller delivers when the goods pass the ship’s rail in port of shipment. Seller must
pay the costs and freight necessary to bring the goods to the named port of destination, but the risks
of loss or damage, as well as any additional costs due to events occurring after the time of delivery, are
transferred from seller to buyer. Seller must clear goods for export. This term can only be used for sea
transport.
The Company or Parent
Company
Kenmare Resources plc.
DFS Definitive feasibility studies are the most detailed and will determine definitively whether to proceed
with the project. A definitive feasibility study will be the basis for capital appropriation, and will provide
the budget figures for the project. Detailed feasibility studies require a significant amount of formal
engineering work and are accurate to within approximately 10–15%.
EdM Electricidade de Moçambique.
EGM Extraordinary General Meeting
FOB Free on Board means that the seller delivers when the goods pass the ship’s rail at the named port of
shipment. This means the buyer has to bear all costs and risks to the goods from that point. The seller
must clear the goods for export. This term can only be used for sea transport.
Free Cash Flow Free Cash Flow is the cash generated by the Group in a reporting period before distributions to
shareholders.
Gender diversity Percentage of females in the workforce at the Moma Mine.
GHG emissions Scope 1 & 2 Greenhouse Gas emissions. The Group acknowledges the human contribution to climate
change and aim to reduce emissions its already low carbon intensity operations.
GISTM Global Industry Standard of Tailings Management
Group or Kenmare Kenmare Resources plc and its subsidiary undertakings.
HMC Heavy mineral concentrate extracted from mineral sands deposits and which include ilmenite, zircon,
rutile and other heavy minerals and silica.
Implementation
Agreement
The agreement for the Moma Heavy Mineral Sands Industrial Free Zone Project between Kenmare
Moma Processing Limited (a company incorporated in Jersey whose rights and interests were
transferred to KMPL in November 2002), a wholly owned subsidiary of Kenmare, and Mozambique
dated 21 January 2002.
KMAD Kenmare Moma Development Association
GLOSSARY – TERMS
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Kenmare Resources plc Annual Report and Accounts 2023
OTHER INFORMATION
TERM DESCRIPTION
KMML Mozambique
Branch
Mozambique branch of Kenmare Moma Mining (Mauritius) Limited (KMML).
KMPL Mozambique
Branch
Mozambique branch of Kenmare Moma Processing (Mauritius) Limited (KMPL).
KRSP Kenmare Resources plc Restricted Share Plan
Lenders Absa Bank Limited (acting through its Corporate and Investment Banking Division) (“Absa”), The
Emerging Africa Infrastructure Fund (part of the Private Infrastructure Development Group (“PIDG”))
(“EAIF”), Nedbank Limited (acting through its Nedbank Corporate and Investment Banking division)
(“Nedbank”), Rand Merchant Bank and Standard Bank Group (“Standard Bank”).
LTI Lost time injury. Measures the number of injuries at the mine that result in time lost from work.
LTIFR Lost time injury frequency rate. Measures the number of injuries causing lost time per 200,000 man
hours worked on site
Marketing – finished
products shipped
Finished products shipped to customers during the period. Provides a measure of finished products
shipped to customers
Mining – HMC produced Heavy mineral concentrate extracted from mineral sands deposits and which includes ilmenite,
zircon, rutile, concentrates and other heavy minerals and silica. Provides a measure of heavy mineral
concentrate extracted from the Mine
Moma, Moma Mine, the
Mine or Site
The Moma Titanium Minerals Mine consisting of a heavy mineral sands mine, processing facilities and
associated infrastructure, which is located in the north east coast of Mozambique under licence to the
Project Companies.
Mine Closure Guarantee
Facility
$26.6 million mine closure guarantee facility between the Group and Absa Bank Moçambique SA
effective from 1 July 2023.
MSP Mineral Separation Plant.
Mtpa Million tonnes per annum.
NOSA National Occupational Safety Association
OIA Oman Investment Authority formerly the State General Reserve Fund of the Sultanate of Oman.
Odd lot offer The offer made by the Company to members in the UK and Ireland who held certificated holdings of
less than 200 ordinary shares as described in the circular to shareholders dated 21 April 2022.
Ordinary Shares Ordinary shares of €0.001 each in the capital of the Company.
PFS A feasibility study is an evaluation of a proposed mining project to determine whether the mineral
resource can be mined economically. Pre-feasibility study is used to determine whether to proceed
with a detailed feasibility study and to determine areas within the project that require more attention.
Pre-feasibility studies are done by factoring known unit costs and by estimating gross dimensions or
quantities once conceptual or preliminary engineering and mine design has been completed.
Processing – finished
products produced
Finished products produced by the mineral separation process. Provides a measure of finished
products produced from the processing plants
Project Companies Kenmare Moma Mining (Mauritius) Limited and Kenmare Moma Processing (Mauritius) Limited, wholly
owned subsidiary undertakings of Kenmare Resources plc, which are incorporated in Mauritius.
Revolving Credit Facility $200 million debt facility dated 4 March 2024 between the Lenders and KMML Mozambique Branch
and KMPL Mozambique Branch.
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Kenmare Resources plc Annual Report and Accounts 2023
GLOSSARY – TERMS CONTINUED
TERM DESCRIPTION
RUPS Rotary Uninterruptible Power Supply
TCFD Task Force on Climate Related Financial Disclosures
Tender Offer The invitation by the Company to eligible shareholders to tender Ordinary Shares for purchase on-
market by Peel Hunt LLP on the terms and subject to the conditions set out in the circular dated 15
August 2023.
Term Loan Facility $110 million debt facility dated 11 December 2019 between the Lenders and KMML Mozambique Branch
and KMPL Mozambique Branch.
THM Total heavy minerals in the ore of which ilmenite (typically 82%), rutile (typically 2.0%) and zircon
(typically 5.5%) total approximately 90%.
TSF Tailings Storage Facility
UK United Kingdom
WCP Wet Concentrator Plant.
WCP A The original WCP which started production in 2007.
WCP B The second WCP which started production in 2013.
WCP C The third WCP which started production in 2020.
WHIMS Wet High Intensity Magnetic Separation Plant.
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Kenmare Resources plc Annual Report and Accounts 2023
OTHER INFORMATION
Company Secretary
Chelita Healy
Registered office
Kenmare Resources plc
Styne House
Hatch Street Upper
Dublin 2
D02 DY27
Registered number
37550
Independent auditor
KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
D02 DE03
Solicitors
McCann FitzGerald
Riverside One
Sir John Rogerson’s Quay
Dublin 2
D02 X576
Bankers
Absa Bank (Mauritius) Limited
1st Floor Absa House
68 Wall Street
Cybercity
Ebene 72201
Mauritius
Absa Bank Moçambique
Torres Rani, Edifício de Escritórios,
16º Andar
Av. da Marginal nº 141
Maputo
Moçambique
AIB Bank Plc
140 Lower Drumcondra Road
Dublin 9
D09 YY61
Barclays Capital
1 Churchill Place
London
E14 5HP
FirstRand Bank Limited
Austin Friars House
2-6 Austin Friars
London
EC2N 2HD
Nedbank Limited
7th Floor
12 Arthur Street
London
EC4R 9AB
Standard Bank (Mauritius) Limited
Level 9 Tower A
1 Cybercity
Ebene 72201
Mauritius
Registrar
Computershare Investor Services (Ireland)
Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
D24 AK82
Website
www.kenmareresources.com
206
Kenmare Resources plc Annual Report and Accounts 2023
GENERAL INFORMATION
The production of this report supports the work of the Woodland Trust, the UK’s leading woodland
conservation charity. Each tree planted will grow into a vital carbon store, helping to reduce environmental
impact as well as creating natural havens for wildlife and people.
ANNUAL REPORT AND ACCOUNTS 2023
Kenmare Resources plc
4th Floor
Styne House
Hatch Street Upper
Dublin 2
Ireland
T: +353 1 671 0411
F: +353 1 671 0810
E: info@kenmareresources.com
www.kenmareresources.com