African Mining Circle, September 22: Ivanhoe Mines (Ivanhoe Mines) is accelerating its expansion of the Kamoa-Kakula copper mine in the Democratic Republic of Congo to cope with the expected surge in copper demand and short supply.
Ivanhoe Mines announced on Monday that the expansion of the Kakula processing plant will be advanced from the first quarter of 2023 to the second quarter of 2022, and the annual output will increase from 3.8 million tons to 7.6 million tons.
To speed things up, the Kamoa-Kakula joint venture will order long-term leading products with a total commitment of US$100 million in the coming weeks, of which US$25 million will be spent this year.
Co-chair Robert Friedland said: “There are many smart people in the mining industry who firmly believe that copper is rapidly approaching the divergence of supply and demand; global copper production will be in short supply.” “Therefore, we want to ensure that the Kamoa-Kakula project will be realized as soon as possible. Short-term production potential while maintaining our strong balance sheet."
Friedland also said: "Now we are entering the queue of key long-delivery projects, such as ball mills. With very little upfront investment, we can increase our flexibility and quickly advance the first of multiple planned expansions. project."
A recent pre-feasibility study for an expanded mining business of 7.6 million tons per year (ore procurement from Kakula and Kansoko mines) outlined a net present value of US$6.6 billion after tax, with a discount rate of 6%, 37 years The internal rate of return within the mining life of the company is 69% and a return on investment of 2.5 years.
The economic model assumes that the price of copper is US$3.10 per pound, but Friedland pointed out that at least one major global investment bank predicts that copper prices will range from US$3.20 per pound to US$3.20 per pound in the next 6 to 12 months based on the view that there will be a supply deficit in 2021. Between 3.60 dollars in pounds.
Ivanhoe further stated that the construction of Kakula's 3.8 million tons/year processing plant is proceeding smoothly. In addition to Transformers expected to be delivered in October, other long-term products have been delivered to the site.
Kakula is expected to become the world's highest grade large-scale copper mine. The average copper grade of the ore in the first five years of production was 6.6%, and the copper grade in the first 10 years of production was 6.2%.
