By: Zawya

Titanium miner Kenmare Resources said on Wednesday it could seek arbitration over delays to an extension of its mining rights in Mozambique.

The Dublin-headquartered company owns the Moma Titanium Minerals mine on the north-east coast of Mozambique, mainly producing ilmenite. The mineral is a source of titanium dioxide used mainly in industrial paints and coatings as well as in electronic equipment, packaging, pharmaceuticals and cosmetics.

Kenmare said it has been in inconclusive talks with the Mozambican authorities since 2022 to renew a 20-year mining and export agreement that lapsed in December 2024.

"We are concerned at the continued extension of this process," Kenmare managing director Tom Hickey said in a statement.

"While we remain hopeful of a successful conclusion to negotiations, we reserve the right to safeguard Kenmare’s contractual entitlements, up to and including arbitration, if an agreement cannot be reached," he added.

Hickey told Reuters in an interview that the royalty rate was a major hurdle in agreeing new terms.

"We've been told, when this agreement went to the Council of Ministers back in March, the royalty was the principal sticking point," Hickey said. "We have made a proposal that we hope will be seen as satisfactory to address that, but we just want a conclusion," he added.

The Mozambican government was not immediately available to comment.

Kenmare's proposals include a phased increase in the royalty rate from 2.5% in 2025 to 3.5% over the course of the 20-year agreement, a withholding tax on payments to non-Mozambican suppliers as well as further capital investments and contributions to community development projects.

On Wednesday, Kenmare reported $160 million of mineral sales in the six months to June 30, a 3% increase on the same period last year. Weak prices in an oversupplied market slashed its half-year profit by 71% to $6.1 million.