Kenmare Resources: Broken Titanium Stock or Bottom of the Cycle?

Kenmare runs the world’s largest ilmenite operation, yet its 2025 accounts include a US$301.3 million impairment and a final dividend that never arrived. Calling Kenmare Resources an underappreciated titanium story is easy. The harder question is whether the stock is broken or simply sitting at the bottom of a commodity cycle.

Kenmare Resources (LSE: KMR) has one asset: the Moma mine in northern Mozambique. Its 2025 results, published on 25 March 2026, showed adjusted EBITDA down 63% to a margin of just 19%. They landed in a titanium feedstock downturn that also hit Australian rival Iluka Resources.

That shared pain matters. If you judge Kenmare only against its own past, it looks like a collapse. If you judge it against the sector cycle, the picture changes, although the risks do not disappear.

Here is a clear way to weigh the recovery case against the single-asset and country risks before deciding whether KMR belongs in your portfolio.

How the Moma dredging model makes Kenmare a volume play, not a premium one

What the dredges do

Moma does not dig in the usual sense. Floating dredges work through loose coastal sands and feed wet concentrator plants (WCPs). These plants use water and gravity to separate heavy mineral concentrate (HMC), a sand rich in valuable minerals, from the lighter waste.

That concentrate is then split into three products. Ilmenite is the most common titanium mineral and sells mainly to pigment makers. Rutile is a purer, scarcer titanium mineral, and zircon is used in ceramics and foundry work.

The same heavy mineral sand mining logic applies across the sector: low-cost dredging separates ilmenite, rutile and zircon from coastal sands, and each product then flows into pigment, ceramics or foundry demand with very different price behaviour.

The cost logic follows from the method. Continuous feed, almost no blasting and very little waste rock to move give Moma low unit costs and high throughput. Those conditions suit large volumes of ilmenite, not small volumes of high-grade rutile.

Secondary sources report that Kenmare moved WCP B and its dredge 23 km by road to the higher-grade Pilivili zone in September 2020. This detail has not been independently confirmed. If accurate, it shows a company willing to spend heavily to protect grade and scale.

What Moma actually sold in 2025

Moma’s normal operating scale is roughly 1.3 million tonnes of ilmenite a year. 2025 fell well short of that:

• HMC: 1,233,300 tonnes, down 15%
• Ilmenite: 842,300 tonnes, down 17%
• Primary zircon: 50,000 tonnes, down 1%
• Rutile: 8,600 tonnes, down 12%

The rutile line is the giveaway. At 8,600 tonnes, rutile is a by-product, not a pillar of the business.

Weak demand was only part of the story. Upgrade work on WCP A reduced the volume of ore excavated, so some of the lost output was self-inflicted.

Mineral product revenue came to US$312.1 million.

Average realised price, 2025 US$338 per tonne (excluding by-product ZrTi)

For you as an investor, this means Kenmare’s earnings depend on throughput and cost control rather than price premiums. Every disruption to output, and every dip in price, flows straight to the bottom line.

Reading the 2025 results: a downturn, an upgrade bill and a 301 million dollar write-down

The earnings fall

The damage started with price and volume moving the wrong way together. Shipments fell 13% to 947,900 tonnes, and the average product price slipped 6%. Revenue dropped 20% as a result.

Low-cost producers suffer most when volumes fall, because fixed costs do not shrink with output. Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation, excluding the impairment) fell 63% to US$58.0 million.

Two shipments were only partly loaded at year-end. That volume moves into the first half of 2026 rather than disappearing.

The debt and impairment layer

The balance sheet tells a second story. Net debt, meaning borrowings minus cash, climbed to US$158.8 million at 31 December 2025 from US$25.0 million a year earlier.

Most of that rise came from about US$156 million of peak capital spending on the WCP A upgrade. It was a deliberate investment, not only a sign of trading weakness.

Then came the write-down. An impairment reduces the value of an asset in the accounts when its expected future cash flows fall. Kenmare’s US$301.3 million charge, including US$100.3 million booked in the first half, reflected lower long-term price assumptions and updated thinking on renewal terms for Moma’s Implementation Agreement with the Mozambican government.

If you see a 2025 loss of about US$325 million on data sites such as Simply Wall St, that figure includes the impairment. Kenmare’s own adjusted loss of US$23.7 million excludes it.

The impairment tells you management now assumes structurally lower cash flows from Moma. That is a more important signal than the one-year fall in earnings.

Kenmare versus Iluka: ilmenite volume against rutile and zircon premium

Put Kenmare beside Iluka and the first thing you notice is the price gap. Iluka reported FY 2025 weighted average realised prices of US$1,643 per tonne for premium and standard zircon, US$1,216 for rutile (excluding HyTi) and US$1,112 for synthetic rutile.

The price gap Kenmare averaged US$338 per tonne in 2025. Iluka’s premium products earned roughly three to five times that.

The gap reflects chemistry and scarcity. Rutile carries far more titanium dioxide than ilmenite, and high-grade deposits are harder to find.

Yet the premium model offered no shelter. Iluka’s rutile price reportedly slid from US$1,694 in Q1 to US$1,110 in Q4, though that quarterly path has not been independently confirmed. Reported FY 2025 figures, also not independently confirmed, show revenue of $976 million (Australian dollars), underlying EBITDA of $300 million and a statutory loss of $288 million after roughly $566 million of write-downs.

Iluka does have one buffer. Its synthetic rutile take-or-pay contracts reportedly run until the end of 2026, giving it some earnings stability that Kenmare lacks. Iluka’s 2025 production volumes were not available for comparison.

You should read the shared downturn as evidence of a pigment and zircon demand cycle. Timing the recovery matters more than choosing between the two business models.

Titanium supply and demand dynamics across pigment, zircon and feedstock markets suggest the shared downturn is cyclical, though the pace of recovery depends on downstream restocking and Chinese demand rather than on any single producer’s decisions.

Dividends, buybacks and the dividend that was suspended

Income investors had good reason to like Kenmare. The company has returned more than US$300 million through dividends and buybacks since 2019.

Then the sequence turned quickly:

1. 2024: interim of 15 US cents plus final of 17 US cents, a total of 32 US cents per share
2. 2025 interim: 10 US cents per share
3. 2025 final: suspended because of elevated net debt and weak markets
4. 2026 capex: set to fall to about US$30 million development plus US$30 million sustaining

No share buyback programmes were reported across 2024 to 2026, so any claim of an active buyback is out of date.

Board position on dividends The Board has said it is committed to resuming dividends “as soon as it is prudent to do so and financing facilities permit.”

The 2026 guidance from January points to a partial recovery: shipments above 1.1 million tonnes, ilmenite of about 800,000 tonnes, zircon above 41,000 tonnes and rutile above 7,500 tonnes. A move into the Nataka ore zone is scheduled for the second half of this year. Lower capex should free cash to cut debt.

For UK holders, there is a currency layer as well. Dividends are declared in US cents while the shares trade in sterling, so exchange rate moves affect what you receive.

If you are buying for income, treat any dividend resumption as conditional upside rather than a base case. These forward-looking targets are management guidance and may change with market conditions.

Mozambique, the Implementation Agreement and the risks that decide the stock

Country and contract risk

On the ground, Moma looks steady. No reporting from 2024 to 2026 links the mine to a specific security incident.

The larger valuation risks sit outside the mine gate. The Implementation Agreement sets the terms under which Kenmare operates, and uncertainty over its renewal was a named driver of the impairment. For a single-asset company, those terms help decide what the whole business is worth.

Mozambique mining investment spans multiple commodities beyond titanium feedstock, and the country’s wider policy direction shapes how the market prices contract risk for every operator, including a single-asset company like Kenmare.

Northern Mozambique has also experienced insurgency in recent years. Any escalation could disrupt logistics, staffing or future plans.

Operational and balance sheet risk

The five risks to track are:

• Contract and fiscal: renewal terms that could change royalties, taxes or operating rights
• Security: regional instability in northern Mozambique
• Single asset: all production and earnings come from Moma
• Price cycle: ilmenite and zircon prices driven by pigment and Chinese demand
• Balance sheet: net debt of US$158.8 million, set against the 2026 capex step-down

Dredging in coastal wetlands also brings environmental and community considerations that bear on Kenmare’s licence to operate. On expansion, the WCP A upgrade is substantially complete, and no active CP5 phase appears in 2024 to 2026 reporting.

UK and Irish brokers such as Peel Hunt and Davy have framed the debate along these lines:

You should weigh Kenmare as a high-beta, single-asset titanium feedstock bet. A price recovery and contract clarity both need to land for the upside case to work.

Three signals that will show whether Kenmare’s recovery case is real

The underappreciated label only holds if three things happen together: ilmenite and zircon prices stabilise, Implementation Agreement terms become clear, and net debt falls far enough to restore the dividend.

Watch these three markers:

1. H1 2026 shipments, including the two partly loaded 2025 cargoes
2. The Nataka transition, scheduled for the second half of 2026
3. Any dividend resumption announcement, the clearest sign that the balance sheet has healed

If you are weighing KMR against a premium peer such as Iluka, the choice comes down to how much single-asset and country risk you will accept for a cheaper, more geared exposure to the same cycle.

For readers wanting a repeatable framework, our dedicated guide to evaluating titanium mining companies explains which feedstock metrics matter most before you commit capital.

This article is for informational purposes only and should not be considered financial advice. Investors should conduct their own research and consult with financial professionals before making investment decisions. Past performance does not guarantee future results, and financial projections are subject to market conditions and various risk factors.