Argus Media Limited

11/16/2021 | News release | Distributed by Public on 11/16/2021 05:43

DRC’s Kamoa-Kakula mine lifts 2021 Cu output target

The Kamoa-Kakula copper mine in the Democratic Republic of Congo (DRC) has raised its 2021 copper production guidance to 92,500-100,000t from an initial plan of 80,000-95,000t, drawing confidence from its performance over the past few months.

The copper asset has exceeded expectations since its commissioning on 25 May. It has produced more than 77,500t in the year to date, with its 200,000 t/yr capacity phase 1 achieving commercial production on 1 July.

Construction work on phase 2 of the Kamoa-Kakula project is advancing well, with it expected to commence operations in the second quarter of 2022. This will double the mine's projected copper production to around 400,000 t/yr.

"The company has a strong balance sheet with cash and cash equivalents of $579.7mn on hand as at 30 September 2021 and expects that the majority of Kamoa-Kakula's expansion capital expenditures on phase 2 and phase 3 will be funded from copper sales and facilities in place at Kamoa. Based on current market conditions, it is anticipated that shareholder loan repayments from Kamoa-Kakula will commence in 2022," said project partner Canada-based mining company Ivanhoe Mines.

The Kamoa-Kakula mine is a joint venture between Ivanhoe and Chinese mining firm Zijin Mining, with each owing a 39.6pc stake. The DRC government holds a 20pc stake in the mine and Crystal River Global owns the remaining 0.8pc.

Work on Ivanhoe's other copper contained projects is also advancing, benefiting from higher copper prices in recent years. Three-month copper prices on the London Metals Exchange were fluctuating in a range of $8,000-10,750/t for a good chunk of this year, with prices hovering below $7,000/t from 20 June 2018 to 9 November 2020. It hit a record low of $4,371/t on 19 March 2020 because of the Covid-19 pandemic.

Ivanhoe also continued its copper exploration programme on its Western Foreland licences, located nearby the Kamoa-Kakula project, during July-September. The project's infrastructure programme - including all-weather road building and bridge construction, as well as geophysical surveys covering airborne, electromagnetic and gravity - is progressing well, either complete or nearing completion.

Ivanhoe's South African Platreef project - which is rich in precious metals such as palladium, rhodium, platinum and gold, as well as electric vehicle metals like nickel and copper - is on track to begin operations in 2024. The company is also upgrading its historic Kipushi zinc-copper-lead-germanium mine in the DRC for a production resumption.