Vancouver-based Ivanhoe Mines (TSX:IVN) says it expects to start copper production at its giant Kamoa project in the Democratic Republic of Congo in late 2018, as the company forecasts a looming deficit in the market and rising global demand.
The miner believes conditions should favour the launch of the mine, located about 25 km west of the major mining town of Kolwezi in the Katanga copper belt.
China’s Zijin, a large gold, copper and zinc producer, agreed in May to pay $412 million for a 49.5% stake in Kamoa Holding, the Ivanhoe unit that owns the majority of the Kamoa copper project in Congo’s southern province of Katanga.
The deal came just two months after the firm agreed to acquire a nearly 10% stake in Ivanhoe for about $85 million.
Challenging scenario
Copper prices, however, are not helping to boost enthusiasm for the new mine. The industrial metal has fallen about 25% in the last 12 months as a result of excess in the market.
On the supply side, companies such as Glencore (LON:GLEN) and Freeport-McMoRan (NYSE:FCX) have recently announced plans to reduce output, raising hopes that this could alleviate a global oversupply.
“It’s just not making sense. We’ve never seen copper inventories down at these levels and prices, because these levels, you normally have a much higher copper price,” said Glencore’s CEO Ivan Glasenberg during the company’s earnings call August 19.
