Ivanhoe Mines (TSX: IVN) and Democratic Republic of the Congo’s (DRC) state miner, Gécamines, have announced a joint venture to revive the historic Kipushi zinc-copper-germanium-silver mine in the southern region of the country.
The agreement stipulates that Gécamines will increase its ownership in the Kiphusi Corporation, a wholly owned subsidiary of Ivanhoe, to 38%, and subsequently to 43% by 2027.
Ivanhoe has been diligently working towards the reactivation of the Kipushi mine. The company anticipates that the new concentrator (currently under construction) along with underground development, will be operational by the second quarter of this year. Mining operations at Kipushi could recommence in the second quarter of 2024, with the mine projected to yield over 250,000t of zinc annually for the initial five years.
Additionally, Ivanhoe has stated it is close to concluding financing discussions this quarter, following its 27 April 2023 announcement regarding an off-take and financing facility term sheet with Glencore. The company has received significant additional interest in relation to the financing of Kipushi and off-take of zinc concentrate.
Negotiations are advancing with numerous parties, including facilities of US$200M or higher, and are expected to be concluded this quarter, before the commencement of production next quarter.
The remaining initial capital for the Kipushi project was approximately US$240M as at 30 September 2023, which will be funded by such facilities, with any shortfall covered by additional shareholder loans from Ivanhoe Mines.
This new joint venture agreement marks the dawn of a new era for the Kipushi mine, which is set to resume operations a century after its initial opening in 1924 as the world’s most abundant copper mine. The mine was once known as the world’s highest-grade zinc mine, but was closed in 1993 due to political unrest and declining metal prices.
Gécamines’ chairperson, Guy-Robert Nkunzi, expressed that the revival of the Kipushi mine instills a sense of pride among its former employees, the local communities of Kipushi town, the Haut-Katanga province, and the entire nation.
Upon the mining and processing of a minimum of the current proven and probable reserves of up to 12Mt of ore, an additional 37% of the share capital and voting rights in the joint venture will be transferred to Gécamines, resulting in the state-owned miner owning an 80% stake in the mine.