Name of the Project
Kamoa-Kakula copper project.

Location
The Kolwezi district of Lualaba province, in the Democratic Republic of Congo (DRC).

Project Owner/s
Kamoa Copper, a joint venture (JV) between base and precious metals developer Ivanhoe Mines, with 39.6% ownership; Zijin Mining Group, with 39.6% ownership; Crystal River Global, with 0.8% ownership; and the DRC government, with 20% ownership.

Project Description
Ivanhoe Mines has announced outstanding economic results in the independent integrated development plan for the tier-one Kamoa-Kakula copper project.

The Kamoa-Kakula Integrated Development Plan 2020 comprises three development scenarios: the Kakula definitive feasibility study (DFS), the Kakula-Kansoko prefeasibility study (PFS) and the Kamoa-Kakula preliminary economic assessment (PEA).

Kakula
The Kakula DFS proposes the development of a Stage 1, six-million-tonne-a-year underground mine and surface processing complex at the Kakula deposit, with a capacity of 7.6-million tonnes a year built in two modules of 3.8-million tonnes a year. For this option, 110-million tonnes will be mined at an average grade of 5.22% copper, producing 8.5-million tonnes of high-grade copper concentrate, containing about 10.8-billion pounds of copper.

Kakula-Kansoko
The Kakula-Kansoko 2020 PFS evaluates the development of mining activities at the Kansoko deposit in addition to the Kakula mine, initially at a rate of 1.6-million tonnes a year, to supply the concentrator at Kakula, eventually ramping up to six-million tonnes a year as the reserves at Kakula are depleted.

Kamoa-Kakula
The Kamoa-Kakula 2020 PEA assesses an additional development option of mining several deposits on the Kamoa-Kakula project as an integrated, 19-million-tonne-a-year mining, processing and smelting complex, built in multiple stages.

An initial six-million-tonne-a-year mining operation will be established at the Kakula mine on the Kakula deposit, which will be followed by a separate six-million-tonne-a-year mining operation at the Kansoko mine. A third six-million-tonne-a-year mine will then be established at the Kakula West mine, in addition to a fourth initial mine in the Kamoa North area operating at one-million tonnes a year. The processing plant will be built in five modules of 3.8-million tonnes a year, with an ultimate capacity of one-million tonnes a year.

As the resources at the Kakula, Kansoko and Kakula West mines are mined out, production will begin sequentially at five other mines in the Kamoa North area to maintain throughput of 19-million tonnes a year to the existing concentrator and smelter complex.

Each mining operation is expected to be a separate underground mine with a shared processing facility and surface infrastructure located at Kakula. Material will be transported to the Kakula processing complex by a system of overland conveyors. Included in this scenario is the construction of a direct-to-blister copper smelter with a capacity of one-million tonnes of copper concentrate a year.

Potential Job Creation
Once the two processing plants at Kakula are operating, Ivanhoe expects to employ almost 2 000 permanent Kamoa employees.

Net Present Value/Internal Rate of Return
The Kakula DFS yields an after-tax net present value (NPV), at an 8% discount rate, of $5.5-billion and an internal rate of return (IRR) of 77% over a 21-year mine life, with a payback of 2.3 years.

The Kakula-Kansoko PFS yields an after-tax NPV, at an 8% discount rate, of $6.6-billion and an IRR of 69% over a 37-year mine life, with a payback of 2.5 years.

The Kamoa-Kakula PEA yields a potential after-tax NPV, at an 8% discount rate, of $11.1-billion and an IRR of 56% over a mine life of more than 40 years, with a payback of 3.6 years.

Capital Expenditure
The Kakula DFS estimates peak funding at $775-million, remaining initial capital costs at $646-million and expansion capital costs at $594-million.

The Kakula-Kansoko PFS estimates peak funding at $848-million, remaining initial capital costs at $695-million and expansion capital costs at $750-million.

The Kamoa-Kakula PEA estimates peak funding at $784-million, remaining initial capital costs at $715-million and expansion capital costs at $4.46-billion.

Planned Start/End Date
Initial production of copper concentrate at the Kakula Mine processing plant began on May 25, 2021.

The expansion of the Kakula processing plant will be brought forward from the first quarter of 2023 to the second quarter of 2022.

Latest Developments
The 3.8-million-tonne-a-year concentrator plant built as part of Phase 1 of the Kamoa-Kakula project is fully operational.

The first truckloads of copper concentrate were delivered to a local smelter on June 1, with concentrate dispatch continuing daily.

To date, more than 10 500 dry metric tonnes of concentrate have been delivered to the local smelter and the first blister copper ingots have been received.

Ivanhoe subsidiary Kamoa Copper signed copper concentrate and blister copper offtake agreements in June, on competitive arm's-length commercial terms, with Citic Metal and Gold Mountains International Mining Company for 50% each of the copper products from Kamoa-Kakula’s Phase 1 production.

The company also secured all necessary authorisations to start exports of copper products from the Kamoa-Kakula mine to international markets.

The past month has been dedicated to the Phase 1 plant commissioning, after celebrating Kamoa’s first concentrate production on May 25. The team has progressed steadily with C4 plant commissioning. This is expected to take about four months, with incremental improvements in production expected as the plant is fully ramped up to design capacity.

The project expects to achieve copper production for the remainder of the year in line with guidance.

Progress is also being made on the Phase 2 concentrator plant construction, which is still tracking ahead of schedule, Kamoa Copper CEO Mark Farren has said.

Ivanhoe’s guidance for contained copper in concentrate production at Kamoa-Kakula for the balance of this year is 80 000 t to 95 000 t.

Key Contracts, Suppliers and Consultants
DFS/PFS/PEA:
OreWin (overall report preparation, mining, logistics, power and economic analysis); China Nerin Engineering (smelter design); DRA Global (mine surface infrastructure and metallurgical processing); Epoch Resources (tailings storage facility design); Golder Associates (hydrology models and recommendations); KGHM Cuprum R&D Centre (technical adviser on certain mining methods and geotechnical); Outotec Oyj (smelter technology); Paterson and Cooke (paste backfill plant design and surface/underground paste distribution system); SRK Consulting  (mine geotechnical recommendations); Stantec Consulting International, (mining and mineral reserves) and Wood (mineral resources estimation).

Contact Details for Project Information
Ivanhoe Mines, tel +1604 688 6630 (North America), +27 11 088 4300 (South Africa) or email info@ivanhoemines.com.