Kenmare Resources has announced that its Moma titanium mineral project in Mozambique is commercial, according to a prefeasibility study.

A definitive feasibility study is now under way and if this confirms the existing study, a mine could be in operation in 2002.

The study details a mine producing 600,000 tonnes of ilmenite (a mineral used to whiten products (€82 million) a year with a cash margin of 75 per cent. On that basis, $60 million would be available but tax and financing costs would have to come out of that. Nevertheless, for a company capitalised at only €14 million, the project, if it goes ahead, would have positive implications for the company.

Kenmare said the project gave a rate of return on the funds invested of 27 per cent with a payback period of 3.6 years.

It estimates the net present value at $213 million, assuming a discount rate of 10 per cent.