Ivanhoe Mines, Gécamines seal agreement on Kipushi Mine

Ivanhoe Mines and Gécamines have agreed on an off-take and financing term sheet to return the historic Kipushi zinc-copper-lead-germanium mine to production.

The agreement was inked between Ivanhoe Mines Executive Co-Chair Robert Friedland and President Marna Cloete, together with Chairman Guy-Robert Lukama Nkunzi and General Manager Placide Nkala Basadilua of Gécamines, the Democratic Republic of Congo’s state-owned mining company.

The Kipushi Project, in the DRC’s province of Haut-Katanga and southeast of the company’s Kamoa discovery, is adjacent to the town of Kipushi and approximately 30 kilometres southwest of the provincial capital of Lubumbashi. Ivanhoe Mines acquired its 68% interest in the Kipushi Project in November 2011; the balance of 32% is held by the DRC’s state-owned mining company, Gécamines.

Kipushi Mine

The Kipushi Project is based on the high-grade, underground zinc-copper mine in the Central African Copperbelt, which mined approximately 60 million tonnes grading 11% zinc and 7% copper between 1924 and 1993. In addition to producing copper and zinc, the mine produced 12,673 tonnes of lead and approximately 278 tonnes of germanium between 1956 and 1978. The mine had been managed on a care and maintenance basis since 1993.

“The off-take and financing milestones are critical deliverables that allow us to return Kipushi to production by the third quarter of next year. Most importantly, these agreements reflect the strength of our partnership with Gécamines and our commitment to the people of the Kipushi community and the Democratic Republic of Congo. The Kipushi underground mine will be the world’s highest-grade major zinc operation, with an average grade of approximately 36% zinc over the first five years of production. We will also endeavour, with our partner Gécamines, to continue exploring Kipushi, including copper-rich and silver-rich zones. Kipushi soon will join Kamoa-Kakula as another tier-one production asset in our portfolio, and mark the next step as we execute our plan to emerge as the world’s newest diversified major mining company.” Ivanhoe Mines’ President, Marna Cloete commented.

Ivanhoe Mines’ Executive Co-Chair, Robert Friedland added: “In partnership with Gécamines, we are closing in on a monumental achievement to return the great Kipushi Mine to production. When Ivanhoe Mines acquired its interest in Kipushi almost 12 years ago, the mine was flooded and in a dilapidated state. We commend the efforts of the employees of Kipushi Corporation who restored this crown jewel of the DRC. We are proud to see new, state-of-the-art mining equipment, operated by our Congolese employees, underground for the first time in three decades as we begin to open up the Big Zinc deposit, one of the richest mineral endowments anywhere on earth.

Gécamines’ Chairman, Guy-Robert Lukama Nkunzi also commented: “We are excited to see this historic mine returning to production with our joint-venture partner, Ivanhoe Mines. This is an important moment for Gécamines, as well as for the local community and the people of the Democratic Republic of Congo. A significant amount of work has got us to this point, which marks another major milestone in this innovative partnership that we have formed and comes with the potential to unlock significant value for the country. Gécamines is expected to attract more investment in the future to bolster in-country transformation and value creation. The Kipushi project, by its unprecedented nature, can form a catalyst for Gécamines to become an important actor in the project’s value chain and for the development of transport infrastructure.”