Ivanhoe’s Friedland raises Kamoa-Kakula cost outlook

[Redator]

Ivanhoe Mines (TSX: IVN) has started a second stage of dewatering Kamoa-Kakula, Africa’s largest copper operation, but increased its production cash cost forecast by 12%.

Two submersible pumps have arrived on the site near Lubumbashi in far southeast Democratic Republic of Congo after earth tremors triggered flooding in May, the company said Wednesday in a statement. Two more pumps are due next month in the $70 million plan for draining eastern Kamoa-Kakula by the end of this year.

“The company will provide an update on Kamoa-Kakula’s recovery plan and ramp-up to steady-state operations over the medium term in September, as well as 2026/2027 production and cost guidance,”

BMO Capital Markets analyst Andrew Mikitchook said in a note Thursday. “Management’s goal is to return Kamoa-Kakula to similar throughputs as previously planned by 2027.”

Ivanhoe’s updated projections for C1 cash costs – now pegged at $1.90–$2.20 per lb. copper for 2025, up from the previous estimate of $1.70–$1.90 per lb. – aligns with analyst expectations due to the operation’s current reliance on lower-grade (about 3% copper) ore from stockpiles, Mikitchook added. The analyst expects higher-grade (about 5%) ore from Kamoa-Kakula’s eastern section to become available by mid next year.

Concentrator feeds

“Operational recovery plans at Kamoa-Kakula are proceeding to plan and will provide access to assess ore from the workings that can be mined to feed the phase one and two concentrators,” founder and executive co-chairman Robert Friedland said in a news release.

Ivanhoe’s Toronto-traded shares fell almost 1% on Friday to C$10.73, bringing the year-to-date loss to 37%. It has a market capitalization of C$14.5 billion.

Q2 results

Despite disruptions, Ivanhoe’s financial results for the second quarter ended June 30 largely met analyst forecasts. The company reported adjusted earnings before interest, tax, debt and amortization of $123 million and net profit of $35 million. Ivanhoe wrapped up the second quarter with $672 million in cash and equivalents.

Copper output at Ivanhoe’s Congo mine jumps in second quarter

Quarterly copper production reached 112,009 tonnes, generating net cash flow of $169 million from revenues of $875 million. Full-year production guidance remains at 370,000–420,000 tonnes of copper in concentrate, reflecting a roughly 28% decrease from initial expectations due to the incident.

Kamoa-Kakula produced a record 437,147 tonnes of copper last year. In its first three and a half years, the complex has generated about $4.7 billion in operating cash flow.

Earthquake

Mining at Kamoa-Kakula’s eastern section was halted on May 20 due to seismic-induced flooding. Initial dewatering using nine pumps started on June 2, reducing water inflow by about 3,700 litres per second and enabling mining to resume at the western section by June 7.

By mid-June, western Kamoa-Kakula mining rates had recovered to about 300,000 tonnes per month, with both concentrators running at 80–85% capacity.