Small Talk: Titanium mine up and running after 20 years

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The Independent Online

It has been 20 years in the making, but last Friday marked an historic day for Kenmare Resources; it has finally reaped tangible rewards from its plans to mine titanium in Mozambique.

The group announced that the first 23,000 tonnes of ilmenite had left its Moma Titanium Mineral Sands project, heading for Europe. The management called the first dispatch of the titanium-bearing mineral sand a "significant step forward for the project".

It has been a long road for the exploration group. Kenmare, which is listed in Ireland and on the London Stock Exchange, originally focused on oil exploration off the south coast of Ireland. It became interested in mining mineral sands in southern Mozambique as far back as 1987. The sands carry titanium dioxide, the most widely used white pigment used in paint, plastics and as food colouring.

The process was strung out by a series of feasibility studies, failed joint ventures and the civil unrest in Mozambique before it was ready to push ahead with the project and launch a landmark financing deal.

In 2004, Kenmare secured $354m (175m) to invest in creating one of the largest ever titanium mines. It was the largest structured finance package put together by a mining group outside the FTSE 100. The Moma Titanium mine was built by Multiplex and Bateman and completed last year.

Expectations for the mine are considerable. When it hits full production in the next few months it will be the third largest single mine for titanium dioxide production. The house broker, Mirabaud, expects sales to rise above $100m per year.

The company said on Friday that the mine "is a real success against the odds and a long-term endeavour finally paying off through commitment and hard work".

Up and downs for Northgate

It was a topsy-turvy week for Northgate Information Solutions. The software group fell on Tuesday after announcing its interims, as brokers suggested that it could breach its banking covenants in the next two years. It quickly rallied after reporting it had received an offer, but slipped again as the market began to have doubts over the deal.

Yet it is understood that the talks are in a much more advanced stage than its short statement suggested, and the company will be taken private next year.

It is tricky ground, as no one has forgotten the last time the group held talks. It announced last year it was in talks with a private equity group, widely speculated at the time to be Silver Lake Partners. The deal collapsed in October 2006, and the share price has slid since.

The latest offer is also believed to be a private equity buyer, although its identity is unknown. One market expert said: "I understand that this time the deal is much more likely to go through, although the price could be a sticking point."

Since its last offer, the share price has fallen from about 95p to 61.5p at the end of last week. "The shares are hugely undervalued. There is a good management team and it has good growth in all of its businesses. Any offer below 85p per share would be a blow," the source said.

While the business continues to be feted, there will be further implications to the share price if the deal doesn't complete. The source added: "There will be egg on the face of both sides if it collapses."

Ethical retailer 'will harness the good, the bad and the ugly of capitalism'

The E-tailer Ethicalsuperstore.com is an interesting company to keep an eye on. Launched last September, it is stepping up plans to float within two years.

The global ethical retail market is worth 29bn and everyone from the big four supermarkets to the local store wants to get a piece of the action. But Ethicalsuperstore.com claims it has the widest range of products available, numbering around 3,000 items.

Its founders, Andy Redfern, a former director at the development charity Traidcraft, and Vic Morgan, a social entrepreneur in his native US, point out that while Tesco stocks a token one or two bars from the Fairtrade chocolate company Divine, they stock the whole range of 62. The two believe that, although social enterprise is "all very well and good", to actually make a real difference to people's lives it is important to build a profitable business and on a large scale. "We will harness the good, the bad and the ugly of capitalism to make a difference," says Mr Redfern.

He says many producers find it difficult to secure a listing with major retailers due to lack of capital, but Ethicalsuperstore gives then a channel to get their message across. Sales are expected to hit 2m this year and reach 40m within five years, with the duo hoping to raise a further 3m from venture capital partners by April next year. Given the success of the ethical clothing retailer Adili, which made its debut on AIM this month, this could be the next green retailer to look out for when it hits the public markets.

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