Ivanhoe posts record copper output despite grid instability

Ivanhoe Mines Ltd.’s [IVN-TSX, IVPAF-OTC] said its Kamoa-Kakula Copper mine in the Democratic Republic of Congo (DRC) produced a record 103,786 tonnes of copper in concentrate during the second quarter of 2023. Record quarterly production was achieved despite maintenance shutdowns in June and intermittent grid instability.

The company said Kamoa-Kakula’s Phase 1.0 and Phase 2.0 concentrators are now operating at an increased throughput rate of 9.2 million tonnes per annum following the ahead of schedule completion of the debottlenecking program during the first quarter. The Phase 1.0 and Phase 2.0 concentrators set a monthly production record of 35,856 tonnes of copper in concentrate for May and produced 33,104 tonnes of copper during the shorter month of June.

The second quarter brings Kamoa-Kakula’s year-to-date production to 197,389 tonnes of copper in concentrate. The 2023 annual production guidance for Kamoa-Kakula is maintained at between 390,000 to 430,000 tonnes of copper in concentrate.

The Kamoa-Kakula Copper Project is a joint venture between Ivanhoe Mines (39.6%), China’s Zijin Mining Group (39.6%), Crystal River Global Ltd. (0.8%), and the DRC government (20%). It already ranks among the world’s biggest copper mines, with peak annual production expected to exceed 700,000 tonnes.

On Wednesday, Ivanhoe shares were almost unchanged on the news, easing 0.36% or $0.045 to $12.43 on volume of 670,310. The shares are currently trading in a 52-week range of $13.05 and $6.41.

Meanwhile, since late in the fourth quarter of 2022, Kamoa Copper has been working alongside the DRC’s state-owned power company La Societe Nationale d’Electricite (SNEL), to identify causes of instability across the southern DRC’s grid infrastructure to assist with delivering long-lasting solutions.

Ivanhoe said Kamoa Copper has identified a series of upgrades and has outlined a project plan to deliver the improvements. It said mobilization of resources is underway, with vendor selection and equipment procurement having commenced.

Concurrently, Kamoa Copper’s engineering team is working towards insulating Kamoa-Copper from future instability by expanding on-site backup generation capacity, as well as sourcing additional power imported from the Zambian grid.

“Over the next 12-18 months, on-site backup-power generation capacity will increase via a phased roll-out,’’ the company said. During the second quarter, 11 megawatts (MW) of new generator capacity was installed, brining the total on-site power generation capacity to approximately 48 MW.

Delivery of a further 32 MW in backup generation capacity, sufficient to power Kamoa-Kakula’s entire Phase 1.0 and 2.0 operations in the event of grid disruptions, will commence later this year.

Over 100 MW of further backup generation capacity has been ordered and is expected to be installed in 2024, in time for the Phase 3.0 concentrator and smelter that are currently under construction

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