Modern Mining

TSX-listed Ivanhoe Mines has announced the results of an independent Pre-Feasibility Study (PFS) for the Kakula copper mine in the DRC and an update on the Preliminary Economic Assessment (PEA) for an expanded Kamoa-Kakula production rate of 18 Mt/a. Should this expanded rate be achieved, Kamoa-Kakula would rank as the world’s second largest copper mine, with a peak annual production of more than 700 000 tonnes of copper.

The two studies were released to coincide with the recent Mining Indaba in Cape Town. In his keynote address at the event, Ivanhoe’s Co-Chairman, Robert Friedland, said that the company and its Chinese partners, Zijin Mining Group and Crystal River Global Limited, welcomed the extremely positive findings of the PFS and the updated and expanded PEA.

Kamoa Kakula the DRCs emerging copper giant

The Kakula mine site.

He said that the two studies clearly proved Ivanhoe’s long-standing conviction that Kamoa-Kakula is firmly on track to become one of the greatest copper mining complexes in the world. “This would not have happened without the extraordinary efforts of the Ivanhoe discovery team and our investment of more than US$800 million in exploration and development,” he said.

The PFS and PEA encompass two development scenarios. The Kakula 2019 PFS evaluates the development of a stage one, 6 Mt/a underground mine and surface processing complex at the Kakula deposit while the Kamoa-Kakula 2019 PEA looks at subsequent development to three producing mines, namely Kakula, Kansoko and Kakula West.

Lars-Eric Johansson, CEO and President of Ivanhoe Mines, said that discussions for financing the construction of the initial 6 Mt/a mine at Kakula were progressing well with China-based financial institutions. CITIC Metal, Ivanhoe’s largest shareholder, is assisting with the discussions.

The initial 6 Mt/a operation at the Kakula deposit is in the southerly portion of the Kamoa-Kakula project’s discovery area. For this option, the PFS envisages an average annual production rate of 291 000 tonnes of copper at a mine-site cash cost of US$0,46 per pound (lb) copper and total cash cost of US$1,11/lb copper for the first 10 years of operations, and annual copper production of up to 360 000 tonnes by year four.

An initial capital cost of US$1,1 billion for this option results in an after-tax net present value (NPV) at an 8 % discount rate of US$5,4 billion, an internal rate of return (IRR) of 46,9 % and a project payback period of 2,6 years.

Development of twin underground declines has been completed at Kakula, with ongoing underground development activities, including access drives and ventilation raises. In addition, a boxcut for a ventilation decline on the southern side of the Kakula orebody is nearing completion.

The Kamoa-Kakula 2019 PEA presents the alternative development option of a three-phase, sequential operation on Kamoa-Kakula’s high-grade copper deposits.

Initial production would occur at a rate of 6 Mt/a from the Kakula mine, before increasing to 12 Mt/a with mill feed from the Kansoko mine. A third 6 Mt/a mine would then be developed at Kakula West, bringing the total production rate to 18 Mt/a. As resources at Kakula and Kansoko are mined, the PEA envisages that production would begin at several mines in the Kamoa North area to maintain 18 Mt/a throughput over a 37-year mine life.

For the three-phase sequential operation, the PEA envisages US$1,1 billion in initial capital costs. Future expansion at the Kansoko mine, Kakula West mine and subsequent extensions could be funded by cash flows from the Kakula mine, resulting in an after-tax NPV at an 8 % discount rate of US$10,0 billion and an IRR of 41 %.

Under this approach, the PEA also includes the construction of a direct-to-blister flash copper smelter at the Kakula plant site with a capacity of 1 Mt/a of copper concentrate to be funded from internal cash flows. This would be completed in year five of operations, achieving significant savings in treatment charges and transportation costs.

The Kamoa-Kakula project is situated in the Kolwezi District of Lualaba Province approximately 25 km west of the provincial capital of Kolwezi, and about 270 km west of the regional centre of Lubumbashi.

Photo courtesy of Ivanhoe Mines

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