Ivanhoe Mines (TSX: IVN; US-OTC: IVPAF) has said that the Phase 3 expansion at its Kamoa-Kakula copper mining complex in the Democratic Republic of Congo (DRC) will increase its annual copper production to about 600,000 tonnes by the fourth quarter of 2024, making it the world’s third-largest copper mining complex.
Commercial production at the operation began on July 1, 2021, with Phase 2 production beginning in March this year. The company aims to release a prefeasibility study for the Phase 3 expansion in the second half of 2022.
Kamoa-Kakula’s Phase 3 will consist of two new underground mines known as Kamoa 1 and Kamoa 2 and the initial decline development at Kakula West, the company said. A new, 5-million-tonne-per-year concentrator plant will be established adjacent to the two new mines.
View of the Kamoa-Kakula Mining Complex, with the Kakula North ore stockpiles in front and the Phase 1 and Phase 2 concentrators in the rear. Credit: Ivanhoe Mines
“We are at an inflection point for the copper industry … one where we must determine how to meet growing demand, even as discovering and building new mines becomes ever more challenging,” said the company’s co-chairman Robert Friedland, while stressing the importance of the expansion.
“Humanity will likely require as much copper in the next 22 years alone as it did through this point in its history – approximately 700 million metric tonnes – just to maintain 3% GDP growth. This does not even account for rising demand related to global investment to combat climate change through aggressive electrification,” he added.
Located about 25 km west of the town of Kolwezi and about 270 km away from the provincial capital of Lubumbashi, the Kamoa-Kakula copper project is a joint venture between Ivanhoe Mines (39.6%), Zijin Mining Group (39.6%), Crystal River Global (0.8%) and the DRC government(20%).
The company predicts copper production from the first two phases of Kamoa-Kakula to exceed 450,000 tonnes per year by the second quarter of 2023 and gradually reach a peak annual production of more than 800,000 tonnes.
Phase 3 also includes a direct-to-blister flash smelter with a nameplate capacity of 500,000 tonnes per year of approximately 99%-pure blister copper. The company projects it will be one of the largest, single-line copper flash smelters in the world, and the largest in Africa.
Once in operation, the smelter is expected to enable the project to recover and sell sulphuric acid as a byproduct revenue. There is a strong demand in Congo for sulphuric acid in order to recover copper from oxide ores, the company said. Currently copper mines in the region import “significant volumes of sulphur.”
The project’s partnership with Inga II, a hydropower plant located in the southwest of DRC is expected to provide the Kamoa-Kakula complex with sustainable electricity for Phase 3 and future expansions, Ivanhoe said.
Convoy of trucks transporting Kamoa’s copper concentrate for export to international markets. (Image courtesy of Ivanhoe Mines.)
Scotiabank analyst Orest Wowkodaw described the update as modestly positive in a research note to clients.
“The company now envisions a meaningfully larger Phase 3 expansion (incremental 5 million tonnes per annum throughput vs. 3.8 mtpa previously), increasing the total throughput level at the operation to 14.2 mtpa by the end of 2024,” wrote Wowkodaw.
“Overall, although we await further details, we view the update as a modest positive for IVN shares given the larger planned Phase 3 expansion.”
At press time in Toronto, Ivanhoe Mines was trading at $10.05 per share, up 13¢ or 1.31%, within a 52-week trading range of $7.69 and $13.15. The company has 1.2 billion common shares outstanding for a market cap of $12.1 billion.
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