Kenmare Resources has confirmed that it has received a non-binding proposal from International Resources Holdings RSC (IRH) regarding a possible cash offer for the entire London-listed company.

The Irish-headquartered miner said talks with IRH are ongoing, but cautioned that there is no certainty that a formal offer will emerge or what terms any bid might contain.

"Discussions with IRH are ongoing and there can be no certainty that a firm offer will be made, or as to the terms of any such offer, should one be made. A further statement will be made as and when appropriate," Kenmare said in a brief statement to the LSE today.

Under Irish takeover rules, IRH has until 17 November to either announce a firm intention to make an offer or walk away, unless the deadline is extended.

The offer puts the mineral sands producer into the spotlight after months of operational and market challenges.

The potential bidder is part of Abu Dhabi's growing mining investment ecosystem. According to industry reports, IRH has already invested around $1.5bn in African mining assets, including Zambia's Mopani Copper Mines and a stake in the Bisie tin mine in the Democratic Republic of Congo.

The approach comes at a difficult period for Kenmare, whose shares have been pressured by weaker mineral sands markets, project delays and uncertainty surrounding the renewal of key fiscal agreements in Mozambique, where it operates the Moma Titanium Minerals Mine.

The company is one of the world's larger producers of titanium minerals, supplying products such as ilmenite, rutile and zircon that are used in paints, plastics and ceramics. Its flagship Moma operation in northern Mozambique ships material to customers in more than 15 countries.

Last year, Kenmare founder Michael Carvill and private equity group Oryx together tried and failed to take the business private.

The group reported an adjusted loss of $23.7m for the most recent financial year, compared with a $64.9m profit a year earlier. The company also suspended its final dividend earlier this year as it sought to preserve cash.

Shares in Kenmare Resources rose about 29% in early London trading on Tuesday.

Dan Coatsworth, head of markets at AJ Bell, said Kenmare was a highly attractive asset for a rival miner looking to expand operations or to a private equity group looking for long-term cash flows.

Coatsworth said: “Mozambique-focused titanium minerals producer Kenmare Resources has once again garnered takeover interest. The Irish company has attracted multiple bids over the years, yet no deal has ever made it over the line. Shareholders have either objected to proposals, or the bids were diluted amid factors such as weakener economic conditions or changes to government royalties. It seems that Kenmare is the elusive name in the mining sector and continues to slip through the fingers of bidders.

“Despite the high-profile status of the Moma mine, Kenmare is only a small company in size, it has substantial debts, and demand for its products is cyclical. That makes for a rocky ride for shareholders. The latest bid looks opportunistic but also potentially credible.

“Losing Kenmare would be another blow to the London Stock Exchange as the outflow of UK-listed stocks continues. While the investor audience for Kenmare is relatively niche, losing it would still be a crying shame given it has been a long-standing name in the UK-quoted mining space.”

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