Ivanhoe reports 86 203 t of copper production at Kamoa-Kakula in first quarter

3rd April 2024 By: Darren Parker - Creamer Media Contributing Editor Online

Ivanhoe reports 86 203 t of copper production at Kamoa-Kakula in first quarter

Kamoa-Kakula Copper Complex

During the first quarter, Ivanhoe Mines’ Kamoa-Kakula Copper Complex in the Democratic Republic of Congo (DRC) successfully produced 86 203 t of copper in concentrate, the company has announced.

In a first-quarter production update issued on April 3, the company maintained its 2024 full-year production guidance for Kamoa-Kakula between 440 000 t and 490 000 t of copper in concentrate.

Kamoa-Kakula's Phase 1 and 2 concentrators processed about 2.06-million tonnes of ore during the first quarter, with an average feed grade of 4.8% copper. The copper flotation recoveries for the quarter averaged 87.4%, surpassing the Phase 1 and 2 concentrator design recovery rate of 86%.

On January 2, a daily milling record was achieved when the Phase 1 and 2 concentrators processed 31 375 t of ore within 24 hours, equivalent to a yearly milling rate of 10.5-million tonnes.

Further, a quarterly mining record of 2.5-million tonnes of ore was achieved from the Kakula and Kamoa 1 underground mines. Ore from the Kamoa 1 mine is currently being stockpiled on the surface in preparation for the launch of the adjacent Phase 3 concentrator.

The Phase 3 concentrator, ahead of schedule, is expected to be completed next month. By the end of the quarter, there were 2.05-million tonnes of stockpiled ore for the Phase 3 concentrator, with an average grade of 3.1% copper.

However, Ivanhoe mentioned that its first-quarter production, including throughput and head grade, continued to be affected by the previously reported instability within the DRC’s southern power grid.

The company said Kamoa Copper was actively collaborating with the DRC’s State-owned power company La Société Nationale d’Electricité (SNEL) to address the identified causes of the instability across the southern DRC’s grid infrastructure since late 2022.

Moreover, heavier-than-usual rainfall during the wet season in the first quarter further contributed to grid power intermittency. This rainfall caused elevated water levels in the Congo river, leading to debris blockages at the intakes feeding the Inga hydroelectric dam complex, thereby impacting hydro generation capacity negatively. The wet season typically occurs between November and April.

In December of last year, SNEL and Kamoa Holding subsidiary Ivanhoe Mines Energy DRC signed an amendment to the existing financing agreement to fund the identified infrastructure upgrades.

Originally, the 2014 financing agreement provided a loan of up to $250-million to refurbish 78 MW of generation capacity at the Mwadingusha dam and 178 MW of generation capacity from Turbine #5 at the Inga II dam. The refurbishment of the Mwadingusha facility was completed in September 2021, and the refurbishment of Turbine #5 at Inga II dam is on track to be completed in the fourth quarter.

The amendment expands the financing agreement loan up to a total of $450-million. Similar to the existing financing agreement, the additional $200-million funding from Ivanhoe Mines Energy to SNEL bears interest at the secured overnight financing rate plus 3% and will be repaid through a 40% discount on the tariff of grid energy consumed by Kamoa-Kakula.

This additional funding is dedicated specifically to grid infrastructure upgrades, including increasing grid capacity between the Inga II dam and Kolwezi, installing a new harmonic filter at the Inga Converter Station, and a new static compensator at the Kolwezi Converter Station.

Additionally, various smaller initiatives have been identified to strengthen the transmission capability and improve the stability of the southern grid, such as restringing powerlines and repairing the direct current infrastructure.

The funding will also cover the installation of preventative measures to prevent future blockages of the Inga dam intakes. Resources are currently being mobilised, with project completion expected by the middle of next year.

Furthermore, Ivanhoe Mines Energy is collaborating with SNEL to establish maintenance contracts to upkeep key generation capacity and transmission infrastructure.

As a precautionary measure, Kamoa Copper’s engineering team is expanding the onsite backup generation capacity to ensure full onsite redundancy for both the current Phase 1 and 2 operations and future Phase 3 operations.

The on-site backup-power generation capacity is scheduled to increase, in phases, from the current 58 MW to over 200 MW by the completion of the Phase 3 smelter in the fourth quarter. An additional 20 MW of generation capacity is currently being installed and commissioned, with a further 50 MW slated for commissioning from the end of the second quarter, bringing backup generation capacity to 128 MW.

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

Additionally, since mid-March, an additional 15 MW of power has been supplied to Kamoa-Kakula from the neighbouring Zambian grid, positively affecting the stability of operations.

Discussions are ongoing for an additional 35 MW of power to be supplied through the Zambian interconnector later in the second quarter, contingent upon capacity availability from adjoining Namibian, Botswanan and Mozambiquan grids.

By year-end, Kamoa-Kakula aims to have up to 100 MW supplied through the Zambian interconnector.

Ivanhoe Mines intends to report its full quarter one financial results and provide a detailed operational update before the market opens on Tuesday, April 30.