Mozambique Mining: Kenmare Resources reaches agreement with creditors

Aerial view of the mine pond, processing plant and the jetty. Image courtesy of Kenmare Resources plc.

Ireland’s Kenmare Resources, which explores heavy sands deposits in Mozambique, announced in a statement Tuesday it had reached an agreement with its main creditors on a restructuring plan for the company.

Under the agreement, the Oman Sovereign Fund will invest US$100 million in the company and the company’s board will, in turn, issue securities – shares and bonds – to raise an additional US$175 million.

Kenmare also said it had reached an agreement with Chinese company King Ally Holdings to end a conditional agreement in which the Chinese company would pay US$100 million in exchange for a 29.9 percent stake in Kenmare.

The Irish company mines ilmenite sulphate, rutile and zircon in the heavy sands deposits at Moma, in Mozambique.

However, a drop in commodities prices along with a drop in production have led to significant financial struggles for the company. Raising funds took longer than expected, which meant that the company failed to meet its obligations in January.

The process of restructuring Kenmare’s capital is expected to be concluded in August. (macauhub/MZ)