Ivanhoe sees $70M Kakula mine dewatering cost

Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) said it expects the dewatering of its Kakula mine in the Democratic Republic of Congo to cost as much as $70 million (C$96 million).

Production at the underground operation, which is part of the massive Kamoa-Kakula complex, was halted in May after seismic activity caused flooding in the mine’s eastern section. That led Ivanhoe to slash its full-year output guidance by about 28% to 370,000-420,000 tonnes of copper in concentrates. Mining activities in Kalula’s western portion resumed in early June.

Water levels on Kakula’s eastern side have decreased “modestly” since the first stage of the two-part watering operation began June 2, Ivanhoe said Tuesday in a statement. “Stage Two” dewatering activities – which involve the installation of high-capacity submersible pumps and new permanent infrastructure to fully dewater Kakula from surface – are expected to start in August.

In the meantime, the lower water levels have enabled mining crews to access additional areas and begin “selective rehabilitation,” Ivanhoe said.

“Operational recovery plans are well underway at Kamoa-Kakula following the decisive and proactive actions undertaken by management in response to the seismic activity first announced on May 20,” founder and co-chairman Robert Friedland said in the statement. “Dewatering efforts of the Kakula mine are proceeding to plan, which will provide us access to assess additional high-grade ore from the affected workings that can be safely mined to feed the Phase 1 and Phase 2 concentrators.”

Located in the Central African Copperbelt, a region that also hosts major mines run by Glencore (LSE: GLEN) and First Quantum Minerals (TSX: FM), Kamoa-Kakula is Africa’s largest copper operation, having produced a record 437,147 tonnes last year. In its first three and a half years of operation, Kamoa-Kakula generated $4.7 billion of operating cash flow, positioning Ivanhoe as a key player in meeting rising global copper demand.

Revised cost guidance

Ivanhoe plans to issue revised full-year capital expenditure and cost guidance for Kamoa-Kakula when it releases second-quarter financial results July 30. Projected capital expenditures for the complex will not exceed the upper end of the original 2025 guidance range of $1.42 billion to $1.67 billion, the company said Tuesday.

The $70 million estimate includes the purchase, transport, and installation of high-capacity, submersible dewatering pumps, as well as a contingency.

Kamoa Copper, the local joint venture that’s leading the dewatering effort, has ordered five high-capacity pumps, each rated at 650 litres per second, from Chinese manufacturer Hefei Hengda Jianghai. The pumps are currently undergoing factory assembly and are expected to be shipped by air freight in August.

Ivanhoe and China’s Zijin Mining Group each own 39.6% of Kamoa Copper. The government of the DRC owns a 20% stake, while Hong Kong-based investment firm Crystal River Global holds the remaining 0.8%.

Rising output

Kamoa-Kakula’s Phase 1, 2, and 3 concentrators milled 3.62 million tonnes of ore during the second quarter, producing 112,009 tonnes of copper, Ivanhoe said Tuesday. That’s 11% more than in the same period a year ago.

Mining on the western side of the Kakula mine restarted in early June. By mid-June, the mining rate had ramped up to 300,000 tonnes per month, with grades ranging from 3% to 4% copper, Ivanhoe said. Together, the Phase 1 and 2 concentrators now process about 670,000 tonnes of ore per month.

Kamoa-Kakula’s Phase 1 and 2 concentrators are now operating at about 85% of design capacity, Ivanhoe said. The Phase 3 concentrator is operating 30% above design capacity.

Toward the end of 2025, mining crews plan to advance deeper into Kakula’s western side, where copper grades are expected to increase to about 5%.

Kamoa-Kakula’s second-quarter operating results were “better than expected,” Scotia Capital mining analyst Orest Wowkodaw said Tuesday in a note. What’s more, “the updated operating outlook at the complex over the next 12-24 months appears stronger than we previously envisioned.”

Higher-grade areas

Ivanhoe is now “systematically and judiciously increasing development activities to increase the supply of high-grade, fresh ore to the Phase 1 and Phase 2 concentrators from mining areas on the western side of the Kakula ore body,” Friedland said. Returning to higher-grade copper areas “will drive a further improvement in operating results and efficiency.”

Underground development of a new mining area, located on the far eastern side of Kakula, began recently with the construction of two access drives.

Development of the new area is expected to be initially conducted in waste before entering ore from early 2026. Mining should start in next year’s second quarter, Ivanhoe said.

The new area will not require new mine access from the surface, Ivanhoe said. It will be accessed from existing underground infrastructure that isn’t affected by the ongoing dewatering activities.

Shares of Ivanhoe rose 4.3% to C$10.60 in afternoon trading in Toronto Tuesday, giving the company a market value of about C$14 billion. The stock has traded between C$8.76 and C$20.95 in the past year.