Ivanhoe Mines (TSX:IVN) Signs Off-Take Agreements for Phase 1 Blister Copper and Copper Concentrate at Kamoa-Kakula

Mill construction during development of the initial Kakula Copper Mine.

While the Democratic Republic of Congo made things slightly more complicated for miners by reestablishing an export ban, some mining companies are moving forward with new permits and the ability to export their full output. 

Ivanhoe Mines (TSX:IVN) (OTCQX:IVPAF) has signed a copper concentrate and blister copper off-take agreement on competitive arm’s length commercial terms for 100% of the company’s Kamoa-Kakula project’s Phase 1 copper output. This is a decisive step in the right direction, as the projected output for Kamoa-Kakula is expected to hit 200,000 tonnes of copper per year. In the midst of a supply shortage, Ivanhoe Mines (TSX:IVN) (OTCQX:IVPAF) is set to fill some of the gaps. 

This year, Kamoa Copper made its first jump into production on May 25. It began producing copper concentrate and made the first delivery to the Lualaba Copper Smelter on June 1. The project includes a high-tech, high-grade milling, flotation, and recovery process to produce the ultra-high grade, clean copper concentrate.

Strong Agreements In Place

Off-take agreements have been signed between Kamoa Copper and CITIC Metal (HK) Limited, and Gold Mountains (H.K.) International Mining Company Limited, a subsidiary of Zijin, for half of the copper products from the Kamoa-Kaula Phase 1 production. This deal encompasses all of the copper concentrate and blister copper resulting from the processing of copper concentrates at the Lualaba Copper Smelter. 

Ivanhoe Mines (TSX:IVN) (OTCQX:IVPAF) has a strong partnership with the Lualaba Copper Smelter, located near its Kamoa-Kakula project, just outside the town of Kolwezi. The smelter signed a 10-year agreement with Ivanhoe Mines (TSX:IVN) (OTCQX:IVPAF) on May 31 for the processing of a portion of Kamoa’s copper concentrate production. The terms of the agreement will secure copper concentrate processing for Ivanhoe Mines (TSX:IVN) (OTCQX:IVPAF) and allow the company to maintain steady exports with permission from the DRC. With the first copper concentrates already delivered to the smelter (June 1), the first blister copper ingots are now due to be delivered within 30 days of delivery to the Lualaba Smelter.

Lualaba Smelter 

The Lualaba Smelter is one of the biggest in the region and is wholly owned by Chinese companies. 60% of the smelter is owned by China Nonferrous Metal Mining Group (CNMC) from Beijing, and 40% is owned by Yunnan Copper from Kunming. 

The smelter is the first modern, large pyro-metallurgical copper smelter built in the DRC and is located only 40 kilometers from the Kamoa-Kaula site. The smelter can be accessed via a recently-constructed road that gives Ivanhoe Mines (TSX:IVN) (OTCQX:IVPAF) easy access to the smelting site. It began operations in 2020, with plans to treat up to 150,000 wet metric tonnes of copper concentrates from Kamoa-Kakula. 

Its mandate is to produce blister copper containing approximately 99% copper to be returned to Kamoa Copper. Then it will be collected by CITIC Metal and Zijin from a storage area at the smelter. From there, the copper will be exported by CITIC through the port of Durban, South Africa, a process for which CITIC will be completely responsible for arranging freight and shipment to the final destination. 


The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above. 

By Matthew Evanoff

I specialize in the mining industry, focusing on top global mining stocks. My reporting covers the latest industry news, company/project developments, and profiles of key players. With a degree in finance and economics from the University of Toronto, I've contributed to a wide range of industry publications. Beyond my professional pursuits, I have a keen interest in global business and a love for travel.

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