Name of the Project
Kakula copper mine and Kamoa-Kakula copper mine development projects.

Location
The project is located in the Kolwezi district of Lualaba province, in the Democratic Republic of Congo (DRC).

Project Owner/s
The project is a joint venture (JV) between Ivanhoe Mines, Zijin Mining Group Co, Crystal River Global and the DRC government.

Project Description
A prefeasibility study (PFS) on the Kakula copper mine and the expanded preliminary economic assessment (PEA) for the overall development of the Kamoa and Kakula copper discoveries at the Kamoa-Kakula project have reinforced that Kamoa-Kakula is one of world’s best undeveloped copper discoveries.

The total Kamoa-Kakula deposit hosts indicated resources of 1.39-billion tonnes grading 2.64% copper and inferred resources of 316-million grading 1.76% copper.

Kakula, which has mineral reserves of 119.7-million tonnes, benefits from an ultra­high, average feed grade of 6.8% copper over the first five years of operations, and 5.5% copper on average over a 25-year mine life.

The Kakula 2019 PFS proposes the development of an initial six-million-tonne-a-year mine at the Kakula deposit, in the southerly portion of the Kamoa-Kakula project’s discovery area. The study envisages an average production of 291 000 t/y of copper for the first ten years of operation and yearly copper production of 360 000 t by Year 4.

Mining at the Kakula deposit will be undertaken by drift-and-fill using paste backfill, and room-and-pillar methods. The method has been chosen to maximise the extraction of high-grade Kakula ore.

Mine access to the Kakula deposit will be through twin declines on the north side, which have been completed, and a single decline on the south side of the deposit. One of the north declines will serve as the primary mine access while the other will include the conveyor haulage system.

The south decline will provide additional ventilation, serve as a secondary operational ingress/egress and will facilitate critical early mine development.

The Kakula concentrator will be built in a phased approach, with two three-million-tonne-a-year modules as the mining operations ramp up to full production of six-million tonnes a year. The Kakula concentrator design incorporates a run-of-mine stockpile, followed by two stages of screening and crushing on surface.

The Kamoa-Kakula 2019 PEA presents the alternative development option of a three-phase, sequential operation on Kamoa-Kakula’s high-grade copper deposits.

Initial production is proposed to occur at six-million tonnes a year from the Kakula mine before increasing to 12-million tonnes a year, with mill feed from the Kansoko mine. A third six-million-tonne-a year mine will then be developed at Kakula West, bringing total production to 18-million tonnes a year.

As resources at Kakula and Kansoko are mined, the PEA envisages that production will begin at several mines in the Kamoa North area to maintain the 18-million-tonne-a-year throughput over a 37-year mine life.

Each mining operation is expected to be a separate underground mine with a shared processing facility and surface infrastructure located at Kakula.

Included in this scenario is the construction of a direct-to-blister flash copper smelter – with a capacity of one-million tonnes of copper concentrate a year to be funded from internal cash flows – at the Kakula plant site.

This would be completed in Year 5 of operations, achieving significant savings in treatment charges and transportation costs.

The 18-million-tonne-a-year scenario delivers average production of 382 000 t/y of copper during the first ten years of operations and production of 740 000 t/y by Year 12.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The Kakula PFS estimates an after-tax net present value (NPV), at an 8% discount rate, of $5.4-billion and an internal rate of return (IRR) of 46.9%, with a project payback of 2.6 years.

The Kamoa-Kakula PEA estimates an after-tax NPV, at an 8% discount rate, of $10-billion and an IRR of 41%, with a payback of 2.9 years.

Capital Expenditure
The Kakula PFS estimates initial capital expenditure of $1.1-billion.

The Kamoa-Kakula three-phase sequential operation envisages initial capital costs of $1.1-billion.

Planned Start/End Date
Not stated.

Latest Developments
China's Citic Metal has confirmed that it has received the necessary in-house approvals for its subsidiary Citic Metal Africa to complete its second investment in Ivanhoe for an additional C$612-million, or $464-million.

This investment will be Citic’s second major financing in less than a year, bringing its total investment in Ivanhoe to about $1-billion.

It is expected to close no later than September 7.

On May 15, Zijin Mining exercised its antidilution rights, which will generate additional proceeds for Ivanhoe of C$67-million, or $51-million, to be received at the same time as the Citic funds.

Upon completion of the financing, Citic will own about 29.4% of Ivanhoe’s issued and outstanding common shares and Zijin Mining about 9.8%.

The combined proceeds of more than C$679-million, or $514-million, from Citic Metal and Zijin Mining positions Ivanhoe to fully finance its share – about $55-million – of the capital costs required to bring the Kakula mine into commercial production.

Meanwhile, Ivanhoe Mines has said that construction of the highway linking its Kamoa-Kakula copper project to the Kolwezi airport, in the DRC, is progressing rapidly with the onset of the country’s dry season. 

The 34-km-long east–west road is about 25% complete and is expected to be fully operational by the end of the year.

Once complete, the road will significantly improve Kamoa-Kakula’s transportation corridor that is being used to bring in mining equipment and construction materials, as well as to transport copper concentrates in the near future.

The new road will also improve the safety and commuting time for employees between Kamoa-Kakula, Kolwezi and Lubumbashi, as well as for mine visitors to the Kolwezi airport, Ivanhoe has noted.

Key Contracts and Suppliers
Amec Foster Wheeler E&C Services, DRA Global, KGHM Cuprum R&D Centre, OreWin, Stantec Consulting International and SRK Consulting (PFS and PEA).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Ivanhoe Mines, tel +1604688 6630 (North America)/+27 11088 4300 (South Africa) or email info@ivanhoemines.com.