Kamoa Kakula Copper Project – Forging Ahead
The Kamoa-Kakula Copper Project is a joint venture between Ivanhoe Mines (39.6%), Zijin Mining Group (39.6%), Crystal River Global Limited (0.8%) and the Government of the Democratic Republic of Congo (20%). An ambitious mining project, it has been named the world’s largest, undeveloped, high-grade copper discovery by international mining consultant Wood Mackenzie. We learn how one of the biggest copper mining projects in the world is not being slowed down by the pandemic, in fact, it is ahead of schedule.
The project itself is situated on a series of very large, ultra-high-grade, near-surface, flat-lying, stratiform copper deposits, with adjacent prospective exploration areas, within the Central African Copperbelt, approximately 25 kilometres west of the town of Kolwezi and about 270 kilometres west of the provincial capital of Lubumbashi.
Last year, in February, the project announced positive findings from an independent pre-feasibility study for the development of the Kakula copper mine as well as an updated, expanded preliminary economic assessment for the overall development plan of the Kamoa and Kakula copper discoveries at the Kamoa-Kakula Project on the Central African Copperbelt.
“In a nutshell, we are executing our first project, Phase One of the Kakula Mine, which has developed quickly considering it’s a big underground operation with the first production expected Q3 2021,” explains Mark Farren, CEO of the mine. “Our first ore grade will be about 6% copper on average. Kamoa-Kakula was ranked as the largest and highest-grade unmined discovery in the world and it should be one of the top copper producers in the world at steady state.”
The Kakula Mine is the first of multiple, planned mining areas at Kamoa-Kakula, and so far, the project is making excellent progress. As Farren says, initial copper production at the Kakula Mine is scheduled to begin in next year’s third quarter.
That is a great deal of progress given that in the third quarter of last year Kakula was just completing basic engineering and procurement, raising their initial processing plant capacity from 3.0 Mtpa to 3.8 Mtpa. This expansion of the plant’s initial capacity has meant that this year the number of underground mining crews has grown from 11 to 14 to ensure sufficient mining operations to keep the expanded plant fed and create pre-production stockpiles of approximately 1.5 million tonnes of high-grade ore alongside an additional 700,000 tonnes of material grading approximately 1% to 3% copper. This will enable the processing plant to ramp up quickly, maintaining a steady-state throughput of 3.8 Mtpa.
However, a project of this scale brings its own challenges with it, particularly in this day and age.
“It’s a greenfield project in an African country, so the normal issues apply. It can be politically quite challenging, although we’ve had excellent support from all levels of government,” Farren says. “COVID-19 is the biggest challenge most mining companies are facing. We have about 5,000 people on site constructing the mine and the COVID statistics here are very low compared to many other countries.”
The biggest challenge, as is common for a project this big, was naturally funding.
“At the beginning, the main challenge was securing the funding. We’ve been lucky to have two very strong Chinese companies, invest in the project,” Farren says. “It’s a big project involving significant capital – as well as other issues to deal with. We are not just building a mine; we are also upgrading a hydropower station, constructing electrical power lines and substations, and building new roads. Progress has been solid in all areas so far.”
Ahead of Schedule
On the mining front, things have been going better than planned, with the Kakula Copper Mine underground development 5.1 kilometres ahead of schedule at the end of June, with more than 17 kilometres of the mine now complete.
May marked the mine’s fifth consecutive monthly development record set after achieving 1,868 metres, 535 metres ahead of plan for the month.
As well as the actual mining, the manufacture of equipment for the process plant continues apace. Ball mills and other key equipment are being fabricated for Kakula’s 3.8-million-tonne-per-annum processing plant and shipment to the site has already begun. All major equipment for the processing plant is either on-site or en route to the site.
As this happens the Kakula Mine has begun mining in some of its high-grade mining areas. That ore is being stored in a dedicated, high-grade surface stockpile that at the end of July 2020 contained approximately 116,000 tonnes grading 6.08% copper. At the same time, the project’s medium-grade ore stockpiles contained an additional 446,000 tonnes at 2.73% copper. The Kamoa-Kakula Copper Project’s leadership are optimistic that the stockpiles will significantly expand over the coming months when the majority of Kakula’s underground development will be in mining zones grading over 5% copper.
“I think it has been extremely well managed. It is ahead of schedule and for a big project in the middle of Africa that is a huge achievement,” Farren says proudly. We’re very happy with the performance of the local people and the management team who have been able to get this project moving as fast as we have been able to do.”
Of course, a big part of the reason the Kamoa Kakula Copper Project has been the huge success it has so far is due to the excellent people the mining operation has at its disposal. Talking with Farren, it is clear he strongly believes in the importance of valuing and investing in the mining operation’s people.
“At the moment for Phase One, we will need about 1,400 skilled people. Phase Two will use about 1,000 more people who will need to be trained,” Farren says. “More than 95% of those will be local and recruited within the next three-year years. In a short amount of time we have set up a world-class training centre and we have been very successful in training, with new staff performing at world-class levels. It’s good to see we have been able to train the labour force in time for the ramp-up.”
Mining Through COVID
Like many projects of this scale, the Kamoa Kakula Copper Project has not been unaffected by the COVID-19 pandemic, particularly as the project is international.
“We import steel and components from all over the world, and there literally has been an impact everywhere,” Farren tells us. “I would guess we would average about a two-month delay because of COVID’s impact on manufacturing and imports, but the team on site has been resourceful enough to make up that time and still expect to hand over the plant on time.”
Rochelle de Villiers, CFO, explained that the mining project has also taken steps to ensure the safety and health of its workers during the crisis.
“We implemented a lockdown for about three months and kept the workforce on-site while being vigilant,” de Villiers tells us. “We’ve managed social distancing, established a hospital, and we’ve had a very good overall response. The government now has requested mining companies to go back to normal workforce rotation while further enhancing preventative measures.”
Approximately 5,000 employees and contractors are currently working on-site, and roughly 90% of those people are Congolese nationals. To date, the Lualaba Province of the DRC, where the Kamoa-Kakula project is based, has had very few confirmed COVID-19 cases. This has allowed Kamoa-Kakula to progress from Level Four to Level Three and currently to Level Two of its COVID-19 response plan, meaning that the project’s Congolese employees can return to commuting from Kolwezi and neighbouring communities.
Kamoa-Kakula has also seen the construction of a new hospital ward, built specifically to treat potential COVID-19 patients. The mining project remains prepared to handle the pandemic and COVID-19 cases on-site.
The Kamoa-Kakula Copper Project’s efforts to protect its staff and community go beyond the company’s precautions against the COVID-19 pandemic, however. Throughout the Kamoa-Kakula project the venture has aimed to bring work and value to the communities it is working within and alongside.
“We’ve got a brick manufacturing project owned by community members making concrete bricks to be used in our construction activities,” de Villiers tells us. “We’ve also got a few banana plantations owned by women groups bringing in their first harvest. Also owned by the communities are various agriculture projects, fish projects, a poultry project (meat and eggs) and vegetable projects, of which the products are bought by us and the surrounding communities. We also invested a lot of money in building schools in various villages. We’ve constructed a clinic and providing all the villages with drinking water by installing boreholes at which they fetch fresh drinking water without having to walk kilometres like before.”
These efforts to aid and support the communities in the region are combined with an ongoing, operation-wide effort to make sure Kamoa-Kakula produces the world’s “greenest copper”.
Ivanhoe and its partners in the Kamoa-Kakula joint venture are committed to building modern, safe, mechanised mines that will act as a showcase for what responsible, environmentally sustainable mine development can look like.
Indeed, Kamoa-Kakula is a unique project in that it combines ultra-high copper grades in thick, shallow and relatively flat-lying deposits. This structure allows for highly-productive, large-scale, mechanised underground mining operations. In environmental terms, what this means is that Kamoa-Kakula’s ultra-high copper grades and underground mines will give the mine a small surface footprint while using only a fraction of the consumables, power and water than comparable large, low-grade, open-pit porphyry copper mines while producing far fewer tailings.
Of those tailing, 55% will be mixed with cement and pumped back underground to fill voids and help to support the underground mine. The rest of the mine’s tailings will be pumped into a tailing’s storage facility.
“We are committed to building the Kamoa-Kakula Project to industry-leading standards in terms of resource efficiency, water and energy usage, and minimizing emissions,” Kamoa-Kakula’s Executive Co-Chairman Robert Friedland has said. “We are blessed with incredibly high-grade deposits in areas that have an abundance of clean, sustainable, hydro-power potential ─ providing us with a distinct advantage in our goal to become the world’s ‘greenest’ miner.”
Kamoa-Kakula is ahead of schedule and already promising great results, but talking to Farren it is clear he is already thinking about the next step.
“Phase One is a 3.8-million-tonne underground operation and will produce 240,000 tonnes of copper a year. We’ve already designed Phase Two which will be identical, producing the same volume of copper, giving us between 450,000 and 500,000 tonnes of copper per annum being produced,” he explains. “We expect it to be appraised quite quickly. The mine development is aimed at filling the first plant, with the view to expanding very rapidly in the second phase. The initial Capital for phase one is approximately is $1.3 billion. The long-term picture is that there are a number of phases, four or five to get to the full capacity of the mine and there will be a smelter project as well in the long term.”