Ivanhoe Mines Signs Agreement With Gécamines to Return Kipushi Mine to Production

Kipushi Holding, an Ivanhoe Mines wholly-owned subsidiary, and Gécamines have signed a new agreement to return the ultra-high-grade Kipushi mine back to commercial production. Kipushi will be the world’s highest-grade major zinc mine with an average grade of 36.4% zinc over the first five years of production.

“The new agreement with Gécamines is a testament to the great perseverance, ingenuity and patience of Ivanhoe’s team, working alongside our partners in the Democratic Republic of Congo,” Ivanhoe Mines Executive Co-chair Robert Friedland said.

The new agreement sets out the commercial terms that will form the basis of a new Kipushi joint-venture agreement establishing a robust framework for the mutually beneficial operation of the Kipushi mine for years to come, and is subject to execution of definitive documentation.

“We are convinced that Kipushi’s new partnership around the Big Zinc will be a benchmark for a successful combination of expertise, resources, a unique asset and a shared desire to create value for stakeholders, the state, shareholders and neighboring communities,” Chairman Alphonse Kaputo Kalubi said. “Kipushi, like Kamoa-Kakula, brings new standards, employment opportunities, better health and education infrastructure, and the conditions for the emergence of a dynamic socioeconomic fabric around Kipushi.”

Gécamines, which has operated this mine for a long time, plans to consolidate its partnership with Ivanhoe to optimize its contribution to the Democratic Republic of the Congo mining sector.

“We are excited to move our longstanding partnership with Ivanhoe Mines into a new phase that will deliver significant long-term benefits to all parties,” Gécamines CEO Bester-Hilaire Ntambwe Ngoy Kabongo said. “Ivanhoe Mines has been a key partner in the Kipushi Project for over a decade and we appreciate their continued commitment to the project.”

Gécamines said it sees in it the opportunity for an improved exploitation of the Big Zinc, the development of an integrated economic fabric and the imbedding of skills in the Haut-Katanga province.

The Kamoa Copper team has delivered the first phases of the Kamoa-Kakula mine ahead of schedule and on budget, which the company believed helped expedite the new agreement.

The Kipushi copper-zinc-germanium-silver mine in the DRC Copperbelt is adjacent to the town of Kipushi and approximately 30 kilometers (km) southwest of Lubumbashi. It is located less than 1 km from the Zambian border.

Ivanhoe Mines also announced the positive findings of an independent, feasibility study for the planned resumption of commercial production at Kipushi. The redevelopment of Kipushi is based on a two-year construction timeline, which utilizes the significant existing surface and underground infrastructure to allow for substantially lower capital costs than comparable development projects. The estimated preproduction capital cost, including contingency, is US$382 million.

The 2022 feasibility study focuses on the mining of Kipushi’s zinc-rich Big Zinc and Southern Zinc zones, with an estimated 11.8 million metric tons (mt) of measured and indicated mineral resources grading 35.3% zinc. Kipushi’s exceptional zinc grade is more than twice that of the world’s next-highest-grade zinc project, according to Wood Mackenzie, a leading, international industry research and consulting group.

The 2022 feasibility study envisages the recommencement of underground mining operations, and the construction of a new concentrator facility on surface with annual processing capacity of 800,000 mt of ore, producing on average 240,000 mt of zinc contained in concentrate. Concurrent with the release of the feasibility study, Ivanhoe is finalizing Kipushi’s development and financing plan, together with its partner Gécamines.