Name of the Project
Kamoa-Kakula Copper Complex.

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 an 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 and 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 assessed an additional development option of mining several deposits on the Kamoa-Kakula project as an integrated, 19.2-million-tonne-a-year mining, processing and smelting complex, built in multiple stages.

At the end of January 2023, Ivanhoe announced the positive findings of an independent integrated development plan (2023 IDP) for the project. The 2023 IDP consists of a PFS (Kamoa-Kakula 2023 PFS) for the Phase 3 and Phase 4 expansions of the complex over a 33-year life-of-mine (LoM), as well as an updated PEA (Kamoa-Kakula 2023 PEA) that includes an LoM extension case to 42 years overall.

Kamoa-Kakula 2023 PFS – Phase 3 and 4 expansion, involves a staged increase in nameplate production of up to 19.2-million tonnes a year over a 33-year LoM.

The first stage is the debottlenecking of the operational Phase 1 and Phase 2 concentrators from the current nameplate capacity of 7.6-million tonnes a year to 9.2-million tonnes a year by the second quarter of 2023.

The Phase 1 and 2 concentrators will process ore initially from the Kakula mine, which is being expanded to meet this capacity, and then supported by the Kakula West mine from 2029.

This will be followed by the construction of the five-million-tonne-a-year Phase 3 concentrator. This concentrator will be fed with ore from the existing Kansoko Sud mine, and the Kamoa 1 and 2 mines under development.

Phase 3 is planned to coincide with the commissioning of a direct-to-blister flash copper smelter capable of producing 500 000 t/y of copper in the form of 99+% anode or blister. In addition, the smelter will produce 650 000 t/y to 800 000 t/y of high-strength sulphuric acid for sale in the domestic DRC market.

The final stage is Phase 4, an additional five-million-tonne-a-year concentrator, which will take the total processing capacity to 19.2-million tonnes a year, fed by an expansion of the Kamoa mines.

Kamoa and Kakula will supply a blend of copper concentrate for the smelter as the ore reserve grade tapers over time.

Kamoa-Kakula 2023 PEA – LoM extension case, proposes a nine-year LoM extension of the Kamoa-Kakula Copper Complex, in addition to the Kamoa-Kakula 2023 PFS.

This case includes the addition of four new underground mines in the Kamoa area – Kamoa 3, 4, 5 and 6 – to maintain the overall production rate of up to 19.2-million tonnes a year.

The Kamoa-Kakula PEA is preliminary and includes an economic analysis that is based, in part, on inferred mineral resources.

These resources are considered too speculative geologically for the application of economic considerations that would allow for their being categorised as mineral reserves and there is no certainty that the results will be realised.

Potential Job Creation
Kamoa-Kakula has generated more than 12 000 jobs from its operations and construction activities, with more than 95% of those positions filled by Congolese nationals.

At the end of November 2023, about 2 000 construction workers were at the smelter site, with the number expected to peak at 3 000 in December 2023.

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 LoM, 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 LoM, with a payback of 2.5 years.

The Kamoa-Kakula 2020 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.

The Kamoa-Kakula 2023 PFS case yields an after-tax NPV, at an 8% discount rate, of $19.1-billion at a long-term copper price of $3.70/lb.

The Kamoa-Kakula 2023 PEA case yields an after-tax NPV, at an 8% discount rate, of $20.2-billion.

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 2020 PFS estimates peak funding at $848-million, remaining initial capital costs at $695-million and expansion capital costs at $750-million.

The Kamoa-Kakula 2020 PEA estimates peak funding at $784-million, remaining initial capital costs at $715-million and expansion capital costs at $4.46-billion.

The Kamoa-Kakula 2023 PFS estimates the remaining capital cost for the total Phase 3 expansion at $3-billion, including the mine, concentrator, smelter, infrastructure and investment in off-site hydropower infrastructure.

Planned Start/End Date
The initial production of copper concentrate at the Kakula mine processing plant began on May 25, 2021, with commercial production achieved on July 1, 2021.

The Phase 2 concentrator started commercial production in April 2022, four months ahead of schedule.

The Phase 3 concentrator is on schedule to be commissioned in the fourth quarter of 2024.

Latest Developments
The Kamoa-Kakula Copper Complex produced 393 551 t of copper in concentrate in 2023, aligning with the production guidance range of 390 000 t to 430 000 t.

Guidance was attained following the successful completion ahead of schedule, on February 27, 2023, of Kamoa Copper’s debottlenecking programme.

Kamoa-Kakula’s 2023 production marks an 18% year-on-year increase.

A record daily milling of 31 084 t of ore by the Phase 1 and 2 concentrators was achieved on January 1, 2024.

This year’s production guidance for Kamoa-Kakula ranges from 440 000 t to 490 000 t of copper in concentrate, expected after the Phase 3 concentrator is completed in the third quarter of this year.

The company cautions that the production forecast, based on assumptions and estimates as of December 31, 2023, includes factors such as the completion and ramp-up of the new five-million-tonne-a-year Phase 3 concentrator. It involves known and unknown risks, uncertainties, and factors affecting actual results.

Kamoa-Kakula’s 2024 cash cost and capital expenditure guidance will be disclosed in the 2023 year-end financial results, to be published on February 26.

Additionally, Kamoa Copper is extensively collaborating with the DRC’s State-owned power company, La Société Nationale d’Electricité (SNEL), to address the southern DRC’s grid infrastructure instability and find lasting solutions.

In December 2023, SNEL and Ivanhoe Mines Energy DRC, a Kamoa Holding subsidiary, amended an existing financing agreement to fund identified infrastructure upgrades.

The initial financing involved a loan of up to $250-million for refurbishing 78 MW of generation capacity at Mwadingusha dam and 178 MW at Inga II dam’s Turbine 5. Mwadingusha's refurbishment finished in September 2021, while Inga II's Turbine 5 refurbishment is on schedule for completion in the fourth quarter of this year.

The amendment expands the loan to $450-million, earmarked for grid infrastructure upgrades such as increased capacity between Inga and Kolwezi, a new harmonic filter at Inga converter station, and a static compensator at Kolwezi converter station.

Resource mobilisation is ongoing, with project delivery expected in the next 18 months.

Kamoa Copper’s engineering team is boosting on-site backup generation capacity for full redundancy across Phase 1, 2 and future Phase 3 operations.

The phased roll-out will increase on-site backup-power generation from 48 MW to more than 200 MW by the completion of the Phase 3 smelter.

An additional 30 MW will be commissioned early in the second quarter of 2024, followed by 50 MW by quarter-end, providing 128 MW for Phase 1, 2 and 3 concentrator operations.

Generator farm sites are being built adjacent to the Phase 1 and 2 concentrators and smelter at Kakula, and the Phase 3 concentrator at Kamoa.

Negotiations for up to 30 MW of power from the Zambian grid interconnector have concluded, with imminent power delivery. Long-term expectations foresee this connection supplying up to 100 MW.

Key Contracts, Suppliers and Consultants
Kakula DFS/ Kakula-Kansoko PFS/ Kamoa-Kakula PEA: OreWin (overall report preparation, mining, logistics, power and economic analysis); China Nerin Engineering (smelter design and basic engineering contract for the smelter); 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); Wood (mineral resources estimation); Kamoa Copper and SNEL, together with Stucky SA (engineering, procurement and construction management – Turbine 5); Voith Hydro (contractor Turbine 5); and Metso Outotec (direct blister furnace).

Kamoa-Kakula 2023 PFS/Kamoa-Kakula 2023 PEA: OreWin; China Nerin Engineering; DRA Global; Epoch Resources; Golder Associates Africa; Metso-Outotec Oyj; Paterson and Cooke; SRK Consulting; and MSA Group.

Epiroc (Minetruck MT65 S haulers, the world’s highest payload underground truck in the field, as well as Scooptram ST18 S loaders, Boomer 282 face drilling rigs and Simba E70 S production drilling rigs[DS1] ).

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