Kamoa Holding, the joint venture (JV) company holding the Kamoa-Kakula copper project, in the Democratic Republic of Congo, has secured an equipment financing facility of up to €176-million (about $211-million), along with a $9-million down-payment facility.

The two facilities will be used to buy underground mobile mining equipment and services from Swedish manufacturers Sandvik and Epiroc and Finnish manufacturer Normet Oy.

Kamoa-Kakula expects to soon draw down the equivalent of about $50-million of the equipment financing and down-payment facilities to account for the large fleet of mobile mining equipment already bought and in operation at the Kakula mine.

Further, Kamoa Holding's parent company Ivanhoe Mines reports that Zijin Mining subsidiary Gold Mountains International Mining Company has provided the JV company a limited recourse line of credit of $200-million, secured by the project’s preproduction ore stockpiles to fund the Phase 2 concentrator expansion.

Ivanhoe considers $200-million to be sufficient to cover the cost of the second, 3.8-million-tonne-a-year concentrator module at the Kakula mine – doubling its processing capacity to 7.6-million tonnes a year.

At the end of October, the project’s preproduction surface stockpiles contained about one-million tonnes of high-grade and medium-grade ore at an estimated grade of 3.47% copper. An additional 622 000 t of low-grade development ore also has been stockpiled on surface.

The combined funds from the credit facilities will be used to fast-track the overall development of Kakula’s Phase 2 module, including the mill and associated infrastructure, as well as to accelerate mining activities at the Kakula and Kansoko deposits to keep both concentrator plants operating at full capacity.

The additional funding is expected to accelerate the completion of the Phase 2 mill expansion by the third quarter of 2022, instead of the first quarter of 2023, as previously expected.

“Kamoa-Kakula remains solidly on track to begin Phase 1 copper production in July 2021, and these two non-dilutive, project-level credit facilities allow us to draw down funds as needed to execute the Phase 2 concentrator plant expansion project well ahead of our previous schedule.

"We share this vision for project optimisation and advancement with our partners at the Kamoa-Kakula project. Collectively, we have a very positive outlook for copper prices in the coming years, so we want to ensure that the operation reaches its near-term production capacity as expeditiously as possible, while also maintaining our strong balance sheet.

"Given today's uncertain macroeconomic environment, we view these credit facilities as judicious and timely, with an amortisation schedule that fits well with the planned startup of Kamoa-Kakula’s Phase 2 expansion, which is expected to significantly increase the project’s cash-generating capabilities," comments Ivanhoe co-chairperson Robert Friedland.

The Kamoa-Kakula project is a joint venture between Ivanhoe Mines (39.6%), Zijin Mining Group (39.6%), Crystal River Global (0.8%) and the DRC government (20%).