Ivanhoe Mines Resuscitates A Century-Old Kipushi Mine To Start Zinc Production

Ivanhoe Mines IVPAF signed a joint venture agreement with Gécamines, setting the stage for the resumption of operations at the Kipushi mine in the Democratic Republic of Congo (DRC). The company is the DRC’s state-owned mining company.

The mine, located 30 km southwest of Lubumbashi, was the world’s richest copper mine when it first opened in 1924. It has notable quantities of germanium, lead, gallium, and some of the world's richest zinc orebody. It has been inactive for 30 years due to political instability and low metal prices.

"There is no better place on our planet to build a mine. This makes the Central African Copperbelt and high-grade mines, like Kipushi and Kamoa-Kakula, strategically important worldwide … especially in light of the increasing fragmentation of supply chains and the growing demand for low-carbon-intensive strategic minerals," Ivanhoe Mines' founder and executive co-chairman Robert Friedland said.

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Per the agreement, Gécamines will increase its stake in Kipushi Corporation, currently a 100%-owned subsidiary of Ivanhoe, to 38% and expand it to 43% in 2027. Once a minimum of the current proven and probable reserves and up to 12 million tons have been mined and processed, an additional 37% of the share capital and voting rights in KICO shall be transferred from Kipushi Holding to Gécamines. After which, Kipushi Holding and Gécamines will hold 20% and 80%, respectively.

Construction activities and underground development are progressing well ahead of schedule, with the first production anticipated in the second quarter of 2024. Ivanhoe set production expectations at over 250,000 tons of zinc annually in its initial five years.

The resurgence of Kipushi comes at a time when the zinc market faces challenges. The Chinese market, which accounts for 60 percent of global metal demand, has stalled with post-COVID-19 recovery. At the same time, a drop in energy prices brought back the production from European smelters — causing an increased supply.

Expectations for 2024 remain dull, with analysts predicting flat prices and supply continuing to outstrip demand. World Bank predicts a 4% decline in 2024 before an equal rebound in 2025. Meanwhile, Fitch Ratings and BMI research put a price forecast at $2,500 a metric ton, confirming the flat prices consensus.

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