Kenmare Resources has confirmed it was received a possible offer from Australia's Iluka Resources, but rejected it because the deal didn't recognise the potential of its Moma titanium mine.

The proposal was based on a share for share exchange, with no cash component, with Kenmare shareholders receiving 0.036 new Iluka shares for each Kenmare share they own.

The decision to reject the offer was supported by M&G Investment Management, which manages funds owning 19.05 per cent of Kenmare.

Kenmare noted that the approach was preliminary, and there was no certainty that an offer would be made.

Iluka Resources is the world's biggest zircon producer. Buying Kenmare would give Iluka the smaller company's Moma titanium minerals mine in Mozambique, which produces ilmenite and rutile and contains reserves of zircon. "A potential transaction involving Kenmare is consistent with Iluka's strategy of assessing various mineral sands opportunities," Perth-based Iluka said today in a statement.

(Additional reporting: Bloomberg)