Kamoa-Kakula’s off-take agreements for blister copper and concentrate
DEMOCRATIC REPUBLIC OF CONGO – Ivanhoe Mines has announced that Kamoa Copper SA –the operating company of the joint venture between Ivanhoe Mines, Zijin Mining Group, Crystal River and the Government of the Democratic Republic of Congo (DRC)–has signed copper concentrate and blister copper off-take agreements on competitive arm’s-length commercial terms, for 100% of Kamoa-Kakula’s Phase 1 copper output, which is projected to be approximately 200,000 tonnes of copper per year.
Kamoa Copper began producing copper concentrate on May 25, 2021, and made its first delivery of concentrates to the nearby Lualaba Copper Smelter, outside of Kolwezi, on June 1, 2021.
Kamoa Copper has signed off-take agreements with CITIC Metal (HK) Limited (CITIC Metal) and Gold Mountains (H.K.) International Mining Company Limited, a subsidiary of Zijin, for 50% each of the copper products from Kamoa-Kakula’s Phase 1 production.
The off-take agreements are evergreen for the production volumes from Phase 1, including copper concentrate and blister copper resulting from processing of copper concentrates at the Lualaba Copper Smelter.
The off-take agreements contain standard, international commercial terms, including copper payables and treatment and refining charges based on the annual benchmark across the copper industry. The ultra-high-grade, clean concentrate produced by Kamoa-Kakula is expected to contain approximately 57% copper and very low levels of impurities.
CITIC Metal and Zijin will purchase the copper concentrate at the Kakula Mine and the blister copper at the Lualaba Copper Smelter on a free-carrier basis, meaning the buyers will be responsible for arranging freight and shipment to the final destination, initially via the port of Durban, South Africa.
CITIC Metal and Zijin each will provide an advance payment facility of up to US$150 million (US$300 million in total) to be drawn at the election of Kamoa Copper from June 10,2021,until May 31,2023.
The facility will bear an annual interest rate of 8% and will be offset against provisional payments due to Kamoa Copper from product deliveries. Payment terms include an option to receive a provisional payment on a 100%-basis within three business days of invoicing, at the end of each delivery month.
