Ivanhoe Mines announced on Thursday that it has signed off-take and financing agreements with Switzerland-based miner and commodity trading giant Glencore to restart the Kipushi mine in the Democratic Republic of Congo (DRC) next year, which is considered one of the world’s highest grade zinc mines.
Glencore will take all of the mine’s zinc concentrate for five years and fund the operation with a $250 million loan to be repaid by 2028.
The Kipushi mine, which is located near the Zambian border, is 68% owned by Ivanhoe with the remaining interest being held by state-owned Gécamines.
The mine has $380 million in capital costs remaining, Mining.com reported.
“When Ivanhoe Mines acquired its interest in Kipushi almost 12 years ago, the mine was flooded and in a dilapidated state,” Ivanhoe Mines executive co-chair Robert Friedland said in a statement.
“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,” he added.
Kipushi, which was in production from 1925 to 1993, is expected to yield 10.8 million tonnes of ore at an average head grade of 31.9% zinc over a 14-year mine life, generating 3.3 million tonnes of zinc metal in concentrate, according to a Feasibility Study published by the company last year.
Mining operations are expected to begin in January, followed by the first concentrate deliveries in the third quarter, Ivanhoe stated.
The concentrator is forecast to process 800,000 tonnes of ore a year for 437,000 tonnes of zinc concentrate annually at an average grade of 55% zinc.
Contact Sean at sean@proactiveinvestors.com