Katanga Mining announced that its 75% owned operating subsidiary, Kamoto Copper Co. SA, will temporarily suspend the export and sale of cobalt at its Kamoto Project in the Democratic Republic of the Congo until further notice. The presence of uranium was recently detected in the cobalt hydroxide produced at the Kamoto Project in levels that exceed the acceptable limit allowed for export of the product through main African ports to customers, the company said. To date, the total cobalt production impacted by the sale suspension amounts to 1,472 tons of finished cobalt. The low levels of radioactivity detected in the uranium to date do not present a health and safety risk.
Production of cobalt at the Kamoto Project is expected to continue without reduction in the quantity produced. The company is currently conducting additional surveys to identify the source of the uranium and exploring various options to mitigate the impact of the sales suspension.
KCC intends to construct an Ion Exchange system to remove uranium from cobalt produced at the project. The Ion Exchange system is expected to be commissioned by the end of the second quarter of 2019, subject to obtaining the necessary approvals. The finished cobalt production will be stored on site and processed in the Ion Exchange system once construction is completed. Once the Ion Exchange system is commissioned, the processing and sale of the cobalt stored on site is expected to be completed before the end of the fourth quarter of 2019. The construction of the Ion Exchange system is expected to cost $25 million.
The temporary suspension of cobalt sales during the construction of the Ion Exchange system is expected to negatively impact revenue of Katanga during the fourth quarter of 2018 and the first and second quarters of 2019. The revenue that would otherwise be recognized on cobalt sales during the fourth quarter of 2018 and the first and second quarters of 2019 is expected to be realized in the third and fourth quarters of 2019.
The company said it has not received any claims on the sales which commenced in the second quarter of 2018.
