Foreign media are reporting that Canada's Ivanhoe Mines has signed an agreement with Citic Metal, a subsidiary of China's Zijin Mining and a trader, Sell 50 per cent of each of its copper production from Kamoa-Kakula Phase I, its recently launched copper mine in the Democratic Republic of Congo.
Under the agreement, Gold Mountains (H.K.) International Mining Co. Ltd., a wholly-owned subsidiary of Zijin Mining, and CITIC Metals will take initial offsets from Kakura. Kakula is the first of Ivanhoe's two mines in the concession area.
Ivanhoe said it would not have any problems because the DRC government had given it full authority to export crude copper and concentrate to the international market.
The license came as Ivanhoe entered into a 10-year agreement with Lualaba Copper Smelter, located outside the town of Colwezzi, to process a portion of Kamoa's Copper concentrate production.
The mine delivered its first copper concentrate to Lualaba on June 1 and will receive its first batch of rough copper ingots within 30 days of delivery, it said.
Congo, the world's largest cobalt producer and Africa's biggest copper miner, reinstated a ban on concentrate exports last month to encourage miners to process and refine concentrates locally.
The company said at the time that exceptions would be granted on a case-by-case basis after a request was made by interested parties.
Ivanhoe said the buyer would be responsible for arranging freight and shipping the copper to its final destination, initially via the port of Durban, South Africa.
CITIC Metals and Zijin Mining will each provide up to $150 million in upfront payments, which Kamoa Copper can draw from June 10 this year and May 31, 2023.
"The facility will bear an annual interest rate of 8% and will offset provisional payments due to the delivery of Kamoa copper from the product," the miner said.
Ivanhoe expects the Kamoa-Kakura phase to produce about 200,000 tonnes of copper per year.
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Copper concentrate production at Kamoa-Kakura will increase to 80,000-95,000 tonnes this year. After several stages of expansion, the mine will have a maximum annual copper production of more than 800,000 tonnes.
Robert Friedland, Ivanhoe's co-chairman, believes the project will be the second-largest copper mine in the world and the highest-grade mine in the main business. The concentrator plans to produce concentrates with a copper grade of about 57%.
"If we were from Mars and we were sent a flying saucer around the Earth looking for copper, we would definitely go to Katanga in the southern Democratic Republic of Congo and become the richest copper place on the planet," Friedland told Bloomberg on Tuesday.
Look at Kamoa-Kakula's performance among the world's top 10 copper mines:
Ivanhoe has also vowed to produce the "greenest" copper in the industry as it seeks to become the first of the world's top copper producers to operate carbon emitters with a net zero emissions. Friedland has not set a target date for achieving that goal.
Kamoa-Kakula is a strategic partner between Ivanhoe Mines (39.6%), Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%) and the Government of the Democratic Republic of Congo (20%).
The Lualaba smelter began operation in early 2020 and is 60 per cent owned by Beijing-based China Nonferrous Metals Mining Corporation (CNMC). Yunnan Copper, based in Kunming, China, owns the remaining 40 per cent.
