Surging mineral sands prices offset higher costs for Mineral Commodities
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Strong mineral sands prices has partially offset increased mining costs for Mineral Commodities (ASX:MRC), which revealed an 11 per cent drop in net profit to $8.8 million for 2018.
The company, which owns the Tormin minerals sand operation in South Africa, saw revenue fall 12 per cent to $55.4m.
Lower grades, higher production costs, and changes to the production mix saw costs blow out by 42 per cent to $110.08 per tonne from the prior year.
This was partially offset by a 28 per cent jump in minerals sands concentrate prices.
The company made an average $156.95 per tonne, up from $113.33 per tonne in 2017.
But this income boost was also due to a change in the mix of products sold, with a higher value zircon and rutile concentrate sold in the 2018 year.
“Mineral Commodities zircon/rutile concentrate is the highest-grade zircon concentrate being delivered into China, and the company continues to experience strong demand and pricing support for this product,” the miner told investors.
“Whilst zircon and rutile prices are expected to moderate during the course of 2019 from the peaks achieved during 2018, it is currently expected that on a year-on-year basis the average price for both zircon and rutile in 2019 should be aligned with or marginally higher than that achieved in 2018.”
The company declared a final dividend of 0.7c cents per share, which in conjunction with the interim 0.6c, bought full year dividends for the 2018 financial year to 1.3c per share.
The company has a comfy cash position of $US12.4 million, up 13 per cent on the prior year.