MINING (112)
Between January and September 2024, Kibali Gold exported 19.55 t of gold from the Democratic Republic of Congo (DRC). This output was valued at $1.02 billion, according to the DRC’s Technical Cell for Mining Coordination and Planning (CTCPM). Bankable found that such a record hadn’t been achieved since 2020, value-wise. Volume-wise, the company exported less gold in 2024, compared to 2023, over the period reviewed. Meanwhile, the Kibali mine produced 4.91 t of gold.
In the first nine months of 2024, gold sold for $1,630.65 per ounce on average, against $1,315.31 in 2023, over the same period, thus 24% up year-on-year. Kibali Gold’s top stakeholders–Barrick Gold and AngloGold Ashanti–tried to take advantage of the surge in gold prices.
While Kibali Gold's performance is commendable, it highlights a persistent imbalance in gold exports from the DRC. A comparison between the price per ounce exported by Kibali and the average annual price set by the London Bullion Market Association (LBMA) reveals a systematic discrepancy, with this gap reaching its highest level since 2021 in the first nine months of 2024. Additionally, artisanally produced gold, now centralized and marketed by DRC Gold Trading (formerly Primera Gold), is estimated at $2,100 per ounce.
Écart entre les prix de Kibali Gold et ceux du marché
Due to the lack of transparency surrounding Kibali's gold marketing processes, it is difficult to determine the reasons behind these price discrepancies. Financial reports often lack detailed information that would help clarify these differences. However, several hypotheses can be considered.
One possibility relates to sales methods. Unlike other players who sell raw gold directly to buyers, Kibali Gold may utilize forward sales agreements or specific marketing structures that could affect the final price.
Another possibility relates to costs associated with transporting gold to international markets. The Kibali mine is located approximately 220 kilometers east of Isiro, Haut-Uele's provincial capital, which lacks a modern airport and reliable road infrastructure. Transportation options are limited to the Ugandan border town of Arua, about 150 kilometers to the west, or the Kenyan port of Mombasa, which is 1,800 kilometers away.
These logistical challenges likely incur additional costs for transporting and securing gold, ultimately reducing net selling prices. According to Kibali executives, marketing costs for 2024 are anticipated to range between $740 and $820 per ounce an expense that could partially explain this year's observed price variance.
In a press release issued in November 2024, Kibali Gold executives emphasized their company's economic contributions to the DRC. They reported generating $5.4 billion since operations began, including $1.66 billion in taxes and royalties and $2.87 billion in contractual services. Kibali Gold is the DRC’s largest industrial gold producer.
Assuming an average lifespan of 11 years for the firm’s 10 permits listed in the Mining Cadastre database, Kibali Gold’s contribution stands at an estimated value of $509 million per year compared to an average annual export value of $911.18 million, with 90% benefiting major shareholders Barrick Gold and AngloGold Ashanti.
Georges Auréole Bamba
The electricity regulator (ARE) has granted Compagnie Minière Luisha (COMILU) eligible customer status. This allows the firm to have other power suppliers, besides the country’s power utility, the SNEL, for three years. The visa was officially granted on December 23, 2024, by Sandrine Mubenga Ngalula, General Manager of ARE. COMILU is 78% owned by China Railways Group Limited.
The eligible customer status is governed by the Electricity Act and a ministerial order issued by the Minister of Water and Electricity. It can be granted to any consumer that meets one of two criteria: having an installed capacity of over one megawatt or an annual consumption exceeding 5 gigawatt-hours for non-residential electricity use.
For now, it is unknown if COMILU will leverage its new status to import electricity or buy power from China Railway’s subsidiaries.
China Railway Group has been operating in the DRC since 2008 and is also involved in the Sicomines joint venture, a strategic partnership with the DRC. The company's subsidiaries, particularly COMILU, focus on producing copper cathodes; this requires substantial and consistent energy. However, the SNEL often struggles to meet these energy demands. As a result, mining operators often have to produce or import the needed input.
At a recent Makutano business forum that gathered experts from the DRC and beyond, the SNEL's director noted that mining companies spend nearly a billion dollars annually to compensate for the State’s energy deficits.
The sum represents a significant loss of opportunity for local electricity production in the DRC and is expected to continue rising. In 2024, 11 other companies, including major players such as Kamoa Copper (operated by Ivanhoe Mines), also received eligible customer status. This development allows these companies to diversify their electricity suppliers further, potentially reducing demand for locally generated electricity.
Georges Auréole Bamba
At the current rate of emissions reduction, mining companies risk falling 40% short of the target needed to limit global warming to 1.5°C by 2030, as outlined in the Paris Agreement. This alarming prediction comes from a new report published by dss+, following a survey of 52 mining companies that highlights a significant gap between their stated ambitions and actual progress.
The report, titled "Decarbonising Mining in an Era of Growing Demand for Critical Metals and Minerals," reveals that mining companies reduced their emissions at an average annual rate of just 2% between 2018 and 2021. This rate, while still relevant, is far below the 4.5% reduction required to meet the sector's climate targets (see chart below).
The report attributes the gap to several structural factors, including declining ore quality, which forces operators to intensify extraction efforts and increases energy demands for ventilation and cooling in deep mines. Additionally, monitoring emissions particularly Scope 3 emissions generated downstream from transportation or processing remains a challenge. These emissions can account for up to 60% of the sector's total greenhouse gas output but are often overlooked in companies' decarbonization strategies. Executives interviewed by dss+ also cited fragmented decision-making across sites and insufficient emissions monitoring as obstacles to effective decarbonization, alongside policies that lack incentives for investment in clean technologies.
The dss+ report is not the first to raise concerns about the mining sector's slow progress in decarbonization. Data from some companies indicate stagnant results in emissions reduction. For instance, Rio Tinto reported Scope 1 and 2 emissions of 32.6 megatonnes in 2023, slightly down from 32.7 megatonnes in 2022 (adjusted for acquisitions). BHP also noted a slight increase in emissions, rising from 9.1 megatonnes in 2023 to 9.2 megatonnes in fiscal 2024.
Other organizations have highlighted the paradox facing the industry: it must meet the rising demand for critical metals necessary for the energy transition while simultaneously reducing its emissions. In a report titled "The Net Zero Roadmap to 2050," the International Finance Corporation (IFC) projected that copper and nickel production would need to increase by 200-300% by 2050 to meet climate targets, yet CO₂ emissions from their value chains could double.
In response to these challenges, solutions are emerging to accelerate decarbonization efforts and meet climate expectations. dss+ advocates for greater transparency in annual emissions reporting, emphasizing the need to account for Scope 3 emissions more effectively. Additionally, they recommend developing structured decarbonization plans and improving energy supply. The firm suggests adopting internal carbon pricing a concept where companies assign a virtual cost to CO₂ emissions, motivating them to reduce this cost through optimized financial decisions.
These proposals align with those suggested by the IFC, which aims to reduce emissions from the copper and nickel sectors by 90% by 2050 through transformative changes in their value chains. The IFC recommends adopting renewable energy sources, electrifying equipment, optimizing processes for energy efficiency, and leveraging automation and digitization to minimize inefficiencies. Proactive management of residual emissions through carbon offsets and CO₂ capture technologies is also crucial, along with fostering collaboration among companies, governments, and investors.
There is currently little evidence suggesting that these proposals are practically feasible or enough to transform an industry that is vital for the global energy transition but continues to emit excessive greenhouse gases. According to multiple sources, including Globaldata and McKinsey, the mining sector is one of the highest-emitting industries globally, accounting for between 4% and 7% of direct greenhouse gas emissions. When including downstream Scope 3 emissions, this figure rises significantly—up to 28% or approximately 19,440 megatons of carbon dioxide equivalent.
Successfully decarbonizing the mining sector will ultimately depend on the commitment of industry players and political leaders to overcome existing structural and financial barriers.
Louis-Nino Kansoun, Ecofin Agency
Jean-Lucien Bussa, Portfolio Minister of the Democratic Republic of Congo (DRC) accused Kamoa Copper of selling its copper concentrate output below market prices. Kamoa Copper operates the country’s largest copper mine, Kamoa-Kakula. The official stated this in Kinshasa, during the General Assembly of State Companies, held from December 9 to 14.
According to Agence Congolaise de Presse, which reported Minister Bussa’s claims, Kamoa Copper sells below market prices due to the dominant position of one of the buyers, Zijin Mining Group. Indeed, Zijin Mining Group owns 39.6% of Kamoa Copper, alongside Ivanhoe Mines (39.6%), Crystal River (0.8%), and the Congolese State (20%). Zijin is also one of Ivanhoe’s top shareholders.
Zijin Mining buys the Kamoa-Kakula copper through a subsidiary, Gold Mountains (H.K.) International Mining Company Limited. The other firm buying copper concentrate from this project is CITIC Metal (HK). This was known via a communiqué issued in June 2021. According to this source, the two Hong Kong-based companies buy the production of the first concentrator set up at Kamoa-Kakula. Since June 21, no details filtered regarding new buyers. Meanwhile, two more concentrators have been commissioned over the period.
Although the price of copper concentrate cannot be directly compared to pure copper prices on the global market, the year-on-year percentage increase raises concerns, particularly given that copper prices have surged more significantly this year. After remaining below $9,000 per tonne throughout 2023 and the first two months of 2024, copper prices soared to a record high of over $11,000 in May. Despite some corrections and fluctuations since then, copper continues to trade above the $9,000 mark.
The discrepancy between Kamoa Copper's concentrate pricing and market trends prompts scrutiny. While Ivanhoe Mines reported that Kamoa-Kakula generated $2.263 billion in revenue from 303,328 tonnes of copper concentrate at an average realized price of approximately $7,461 per tonne for the first nine months of 2024—up 7.8% from the previous year—this figure does not reflect the broader market dynamics.
Regarding Minister Bussa’s assertion about Kamoa selling below market prices, the official said the State would now get involved in the sales process: "From now on, the buyer selection process will be carried out with the involvement of the State shareholder. This will enable us to sell at the market price and optimize sales,” he declared.
The goal is to maximize the DRC's mining revenues and profits. However, Bussa did not specify what the State’s involvement would encompass and how they would proceed. For now, Kamoa Copper has not commented on the government’s accusations or its decision to get involved in sales operations.
This article was initially published in French by Louis-Nino Kansoun
Edited in English by Ola S. Akinocho
US-based Namib Minerals should soon complete its listing on the Nasdaq stock market, according to statement dated December 9, 2024. The listing is expected to grant the mining company full ownership of the mining and exploration assets of Greenstone, a private equity fund specializing in the mining sector.
The exploration assets include 13 licenses in the Haut-Katanga and Lualaba provinces of the Democratic Republic of Congo (DRC), where six initial drill holes have already been completed, indicating significant copper and cobalt potential. Namib Minerals aims to leverage its upcoming IPO to secure additional funding for exploration works.
The company's interest in the DRC emerges amidst a rising long-term demand for copper, driven by the energy transition. According to BHP, this transition should push up demand for copper by one million tonnes annually until 2035.
The DRC, the world's second-largest copper producer, holds substantial potential for new discoveries; by 2023, it accounted for 65% of the world's newly identified copper reserves.
Currently, Namib Minerals has not disclosed specific details about its exploration programs in the DRC. For now, the firm focuses on finalizing its merger with SPAC Hennessy Capital Investment Corp. VI. Under the deal these two firms sealed in June 2024, Namib will sell 30 million of its shares for $500 million. This transaction is expected to close in the first quarter of 2025, pending necessary approvals.
Namib Minerals' flagship assets include three gold mines in Zimbabwe. One of them has produced 1.8 million ounces from 1941 to 2023.
PM with Ecofin Agency
On December 10, 2024, Gary Nagle, Glencore CEO, met with Félix-Antoine Tshisekedi, President of the Democratic Republic of Congo (DRC). The two men discussed Glencore's contributions to the Congolese economy. "We employ more than 17,000 people in the DRC and we have a community project worth more than US$100 million," Nagle said, as reported by the DRC presidency's communication services. He added that President Tshisekedi supported Glencore's initiatives and agreed on the importance of collaborating to improve the situation in the DRC while defending their respective interests.
While these are the only details disclosed from the meeting, the mention of mutual interest comes at a time when Kamoto Copper Company (KCC), a subsidiary of Glencore that is 75% owned by the group and 25% by Gécamines (the state-owned mining company), is facing a tax adjustment of approximately $895 million by the Tax Authority, the DGRAD. Earlier communications from Glencore indicated that DRC tax authorities contested KCC's declared sales and expenses, leading to customs claims for non-compliance. The Swiss company had noted ongoing discussions with tax authorities to defend its position, but no updates have been provided.
For Glencore, resolving this tax dispute is critical. Management has indicated that prolonged uncertainty or an unfavorable ruling could significantly impact the group's financial results for the current year. This situation is exacerbated by a reported decline in production levels at KCC's various sites, with copper production down by 18% and cobalt production down by 21% at the end of the third quarter of 2024.
The outcome of these discussions between Glencore and the DRC government may play a crucial role in addressing both the company's operational challenges and its ongoing commitments to local economic development.
This article was initially published in French, by Georges Auréole Bamba.
Edited in English by Ola Schad Akinocho
China has banned the export of several critical minerals to the US. Announced and implemented on December 3, the move covers minerals like gallium and germanium. It is a response to U.S. restrictions on technology sales to China. This is good news for the Democratic Republic of Congo (DRC), which could position itself as a rival of China as a germanium supplier.
The DRC aims to supply 30% of the global germanium demand, according to Gécamines, the State-owned mining company leading this effort. In a July 2023 interview with Reuters, Gécamines President Guy Robert Lukama said Chinese restrictions present opportunities for the DRC. China's earlier measures had already disrupted supplies of critical minerals such as germanium.
“The move by China will create some scarcity in the market, which means that our germanium which is not yet committed could have more value [...]There are no customers yet, but there is interest, it's been there since we started the project and we are quite sure that we will get more interest on our germanium shortly.”
In May 2024, Gécamines announced a partnership with Belgium's Umicore to process germanium from the "Big Hill" tailings site in Lubumbashi. The first germanium concentrate exports to Belgium started in October 2024. Increased disruptions from Beijing's recent measures may help Gécamines attract more customers and encourage investment in other Congolese tailings sites.
The Lubumbashi hydrometallurgical plant, which has an annual production capacity of 30 tonnes of germanium, was built with a $75 million investment and is expected to be completed in 2023. In addition to germanium, the plant will produce zinc oxide, copper, and cobalt.
Emiliano Tossou
The Kamoa-Kakula complex produced 45,019 tonnes of copper concentrate in November 2024. Ivanhoe Mines, the facility’s owner, disclosed the output on December 3; it is the highest monthly volume produced this year. From January to November 2024, the Congolese complex delivered 390,061 tonnes of copper concentrate.
Since the commissioning of a third concentrator at the site last June, Kamoa-Kakula has consistently broken its monthly production records. The mine is expected to deliver between 425,000 and 450,000 tonnes in 2024, compared to 393,551 tonnes in 2023. The complex is set to produce even more next year than this year. Kamoa-Kakula has recently achieved an annual production capacity of 600,000 tonnes.
Kamoa-Kakula is a joint venture with Zijin Mining (39.6% stake), China CITIC Bank, and Ivanhoe Mines as its major investors; Ivanhoe is the largest shareholder (39.6% stake). While the mine's production is subject to sales agreements with Chinese companies, the Congolese government has recently expressed its intention to participate in the buyer selection process.
"The State must get involved so that it can guarantee the credibility of the organized bidding process and be confident that any future buyer selection process will enable Kamoa Copper SA to receive competitive bids and obtain the best possible terms for the sale of its products," states the minutes from the Council of Ministers meeting held on October 4.
The increase in copper production at Kamoa-Kakula is part of a broader upward trend in Congolese copper output. Following a 13.5% increase in 2023, BMI forecasts that DRC copper production will grow by a more modest 4.5% in 2024, bringing total output closer to 3 million tonnes. With Peru targeting 2.8 million tonnes this year, the DRC is set to maintain its symbolic status as the world's second-largest copper producer.
Emiliano Tossou
Australia's AVZ Minerals has announced that it has secured $15 million in funding from Locke Capital, a specialist in litigation finance, to support its legal efforts surrounding the Manono lithium project in the Democratic Republic of Congo (DRC). This financing will cover costs associated with several international arbitration proceedings initiated by AVZ, particularly concerning disputes with the Congolese authorities and partners such as Zijin Mining and Cominière over the PR 13359 exploration permit. This permit, which covers part of the Manono project, is central to a dispute submitted to the International Centre for Settlement of Investment Disputes (ICSID).
The funds will be allocated to cover legal fees, arbitration costs, and other expenses related to ongoing litigation. AVZ backs the financing with its assets, including its interests in the Manono project and its associated subsidiaries.
A Dispute Against a Backdrop of Falling Lithium Prices
Since 2023, AVZ Minerals has contested the Congolese authorities' decision to award an operating license for the Manono project to Manono Lithium SAS, a joint venture owned by Zijin Mining and Cominière. AVZ argues that the permit violates ICSID provisional orders to maintain the status quo pending a decision on the dispute’s merits.
Manono, a strategic project for AVZ and the DRC, is one of the world's largest lithium deposits. According to company estimates, it contains at least 400 million tonnes of mineral resources grading 1.65% lithium. Manono could significantly leverage the DRC’s lithium potential and bolster its mining revenues. However, legal disputes over mining rights have hindered its development. The $15 million financing recently secured by AVZ should enable the firm to continue its legal proceedings without immediate financial constraints, potentially extending these proceedings by several years.
Global lithium prices have fallen drastically since 2022. For instance, the price of spodumene fell from $6,401 per tonne in December 2022 to around $770 in September 2024 a decline of nearly 90%. This drop is attributed to oversupply while demand grows at a more moderate pace. According to the International Energy Agency (IEA), global lithium production is expected to reach 194,000 tonnes in 2023, an increase of 81% compared to 2021. However, demand grew by only 63% during this period, reaching 165,000 tonnes. Contributing factors include a buildup of inventories and slower-than-expected growth in electric vehicle sales.
LNK
Recently released gold export data from the Democratic Republic of Congo (DRC) for the first half of 2024 reveal a stark contrast in sales prices. The former Primera Gold company, a joint venture between the state and partners from the United Arab Emirates, achieved an average price of $64,502 per kilogram of gold sold. In contrast, Kibali Gold, which operates one of Africa's largest mines and is 90% owned by Barrick Gold and AngloGold Ashanti, sold its production at an average price of $46,214.8—almost $20,000 less than Primera Gold, which has now been rebranded as DRC Gold Trading after the State took full control of the company.
Artisans in Ituri and North Kivu also obtained a higher price than Kibali Gold, exporting their gold at an average price of $59,500 per kilogram compared to Kibali's $46,214.8, resulting in a difference of over $13,000.
These discrepancies in gold prices were evident in 2023 as well. Primera Gold and artisans sold their production at $59,509 and $38,484.4 per kilogram respectively, while the average price per kilogram from Kibali was just $30,915.6 a difference of nearly $30,000 and $10,000 respectively.
Despite being listed on major financial markets such as New York and Toronto, Barrick Gold, and AngloGold Ashanti have not managed to secure better prices than Primera Gold or small-scale artisans in Tshopo or Tanganyika provinces of eastern DRC, who primarily export unrefined gold.
Although transparency in the extractive sector has improved in the DRC, there are still major issues that prevent a full understanding of the value chain and real opportunities. Neither Barrick Gold nor AngloGold Ashanti provide details on their sales processes, leaving it unclear whether these prices stem from forward agreements or other sales strategies.
Impact on Public Revenues
The differences in pricing have significant implications for public revenues. Kibali Gold is the main contributor to gold export revenues in the DRC, with reported sales accounting for 88.2% of the total in the first quarter of 2024. The central government and the province hosting the mine (Haut-Uele) derive revenue through Sokimo's shareholding but primarily through royalties on sales value and various taxes. If Kibali sells its production at sub-optimal prices, this diminishes the revenue base for a government that requires resources to fund its development policies.
According to market data reviewed by Bankable Africa, the government collected up to $27.8 million in royalties from Barrick Gold alone between January and September 2024. This figure is slightly higher than the $25.5 million collected during the same period in 2023. While royalties increased by 9%, the price of gold on international markets rose by an average of 37% during this timeframe. Nevertheless, Barrick Gold reported an 8% decrease in quantities sold over the same period.
Georges Auréoles Bamba
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Zambia faces an energy crisis that could exert pressure on mining operators in the southeast of the Democratic Republic of Congo (DRC). These operators primarily rely on Zambia to compensate for the insufficient supply of the Congolese utility, Société Nationale d'Electricité (SNEL). The operators import electricity directly, particularly in Katanga, or they purchase diesel to fuel their thermal power plants.
Last month, socio-political unrest in Mozambique and a new refundable tax in Zimbabwe complicated transit procedures, forcing Zambia’s petroleum product distributors to alter their routes, thus prolonging supply times and increasing costs.
According to Zambia's energy regulator, the situation is returning to normal. However, the watchdog announced a 4.2% increase in the cost of a liter of diesel, rising from 28.9 to 30.11 kwachas. Despite this increase, prices remain more competitive than fuel from Matadi, in the west of the DRC. Still, the surge will increase the operational costs of mining companies.
Besides the diesel price increase, Zambia recently raised electricity tariffs to improve the financial situation of its power utility, Zesco. This increase amounts to 115% for large consumers such as mining companies. The Zambian regulator has indicated that this hike in electricity tariffs should only last three months.
At the Makutano 2024 business forum held in Kinshasa from November 13 to 15, SNEL Managing Director Fabrice Lusinde revealed that mining companies have spent nearly $4 billion over five years to address their unmet energy needs. He noted that these exports could increase further next year. Last month, Ivanhoe Mines revealed it is negotiating to boost power imports from southern Africa for the Kamoa-Kakula mine via the Zambian interconnector, from 65 MW now to 100 MW by year-end.
Mining operators work with the SNEL to improve supply, but these efforts remain insufficient. Despite its significant hydroelectric potential, access to electricity in the DRC remains limited. Several dams are planned in the 2025-2028 Public Investment Program, but their completion will not fully address the shortfall. The project for a third dam on Inga is still under discussion; experts suggest it may not materialize within the next ten years.
Georges Auréole Bamba
DRC Gold Trading SA officially launched a new branch in Kalemie, in the eastern part of the Democratic Republic of Congo (DRC) on November 18. This is the firm’s second branch; the first is located in South Kivu. In a press release, the company announced the new branch’s opening, indicating that it wants to "expand its activities of purchasing, marketing, and exporting gold from artisanal and small-scale mining in all the country's gold provinces."
Originally named Primera Gold DRC, the company became DRC Gold Trading on November 13 after transitioning to public control. The State and two public entities acquired the 55% stake previously held by the Emirati company Primera Group under undisclosed terms. The State now holds 55% of the shares, the Mining Fund for Future Generations has 30%, and Gécamines holds 15%.
Despite these changes, DRC Gold Trading said its vision is the same: "To make the DRC the world's largest exporter of artisanal and small-scale gold, through credible, conflict-free supply chains that benefit local communities, both directly and indirectly impacted."
According to the firm’s Managing Director Joseph Kazibaziba, it will be challenging to bring in all artisanally mined gold into the official circuit. "More than 50 tonnes are fraudulently exported to the east coast of Congo, worth more than $5 billion. You can understand that DRC Gold Trading is a strategic company of vital importance to the state," he told the press on November 13 during the ceremony marking the company's name change.
Défis de la compétitivité des prix
So far, DRC Gold Trading has exclusively been active in South Kivu. The firm collected and exported over 5.5 tonnes of gold in 2023, worth over $350 million. With its new branch, the company plans to collect and export more gold. However, this will depend on the competitiveness of the prices offered to mining cooperatives, traders, and approved buyers from whom it sources gold.
DRC Gold Trading plans to export at least 12 tonnes of gold this year–a far-fetched goal, based on data from Bloomberg, relayed by the Ecofin Agency. The figures show that the firm’s gold exports are falling. Since November 2023, shipments have fallen by 50%; a situation attributed to higher black market prices offered to artisanal miners and banking regulations that limit daily cash transactions.
Aware of the challenges ahead, Joseph M. Kazibaziba, who was in Kalemie on November 17, met with traders from Tanganyika province. However, no details were released about this working session, which aimed to discuss the challenges faced by players in the gold sector. Nevertheless, at the opening ceremony of the new branch, the Managing Director of DRC Gold Trading appealed to the people of Tanganyika, saying: "DRC Gold Trading SA relies enormously on your support to accomplish the missions entrusted to it by the President of the Republic. Its success is also that of your province, which will benefit through tax and parafiscal levies, not to mention the jobs generated." The official also assured his audience that the company has sufficient financial capacity to absorb all quantities of artisanal and small-scale gold produced throughout the country's east coast.
Pierre Mukoko
The Kamoa-Kakula copper mine should deliver over 600,000 tonnes in 2026. The mine’s owner, Ivanhoe Mines, stated this on October 30, 2024, during a meeting with investors. On the occasion, Mama Cloete, President and CFO of Ivanhoe Mines, indicated that the figure would be reached “once we have completed Project 95”.
Project 95 will allow Ivanhoe Mines to recover up to 95% of copper concentrate from the same amount of ore mined and at the same operational costs. The project should begin in Q1 2026 and should add 30,000 to 40,000 tonnes of copper concentrate to Kamoa-Kakula’s annual production.
Ivanhoe Mines, primarily controlled by Chinese entities, also plans a phase 4 which could increase the mine’s production to 700,000-800,000 tonnes per year over the next 40 years. The firm seems on track to achieve this goal, although its output forecasts were scaled down due mainly to energy challenges. The firm has been taking various steps to overcome these issues.
For example, it is developing a program to back up power generation at the site. Backup capacity reached 135 MW in September and is expected to increase to 201 MW by the end of the year. Additionally, negotiations are underway to raise imported power from Southern Africa from 65 MW to 100 MW by year-end. There is also a project with Société Nationale d'Électricité (SNEL) to improve power transmission efficiency, which is scheduled for completion in the second half of 2025.
Balanced Finances
Financially, Ivanhoe Mines has been working to boost its balance sheet, with operating costs averaging $3,527.30 per tonne in Q3 2024, lower than the forecast of $3,748. Ivanhoe can also secure low-cost financing through anticipated sales contracts. Also, the current copper prices, at around $9,645 per tonne, exceed Ivanhoe’s forecast of $8,152 per tonne for Kamoa-Kakula this year. The surge in prices spurred stakeholders’ interest in the project. These include the government, foreign and local banks, and shareholders.
However, increased production does not guarantee better outcomes. Market demand, especially from China—the main buyer of Congolese copper—will play a crucial role. China's economic recovery projects are underway, but results are still pending. Additionally, political changes in the U.S., such as President Donald Trump's plans to reduce incentives for electric vehicles and impose higher taxes on imports from China, could impact demand.
On a positive note, new trade alliances within BRICS may support copper demand, as Europe aims to meet its electric mobility goals by 2035. These factors contribute to a sense of optimism in the sector.
Georges Auréole Bamba
Kamoa-Kakula, the largest copper mine in the Democratic Republic of Congo (DRC), produced a record 41,800 tonnes in October 2024. Ivanhoe Mines, which owns 39.6% of the project, disclosed the figure on November 4.
This output was 1,453 tonnes more than in August, when a third processing plant started operating. It is also just 8,200 tonnes short of the monthly target needed to reach the mine's full capacity of 600,000 tonnes.
On October 12, Kamoa-Kakula nearly reached its production capacity by producing a record 1,720 tonnes of copper. "This corresponds to an annualized production rate of around 580,000 tonnes of copper, taking availability into account," said Ivanhoe.
However, this increase does not make up for earlier production losses caused by inconsistent electricity supply. As a result, Ivanhoe has lowered its 2024 output forecast from 440,000-490,000 tonnes to 425,000-450,000 tonnes of copper concentrates. Still, this indicates that production could rise further in 2025 after an 18% increase in 2023 to 393,551 tonnes.
Copper prices are also rising. In the first half of 2024, the average price was $9,215.84 per tonne, up from $8,726.90 in the same period last year. Analysts expect prices to average $10,200 per tonne in the last quarter of 2024 and around $10,500 per tonne in 2025. Ivanhoe notes that an average price of $7,000 per tonne over the life of the mine is needed for solid profits.
Sales from Kamoa-Kakula exceeded $2.7 billion in 2023, and they are expected to be higher in 2024. Over the first nine months of this year, sales reached $2.3 billion, including a record $828 million in Q3. This strong performance is attractive to creditors; Kamoa-Kakula has secured $400 million in unsecured financing from DRC financial institutions for expansion. It is also beneficial for the government; by July 2024, Ivanhoe reported that the state had collected over $217 million in taxes on profits and earnings compared to nearly $29 million for all of 2023.
Pierre Mukoko