By: Nita Karume
Robert Friedland, Executive Chairman of Ivanhoe Mine, and Lars-Eric Johansson, Chief Executive Officer, announced today that a large-capacity rock crusher now has been successfully installed 1,150 metres below surface at the upgraded Kipushi zinc-copper-silver-germanium mine in the Democratic Republic of Congo (DRC).
The Sandvik jaw crusher has a maximum capacity of 1,085 tonnes an hour. After the 54-tonne machine was disassembled on surface, the pieces were lowered down Kipushi’s main production shaft – Shaft 5 – and installed in the crusher chamber. Reassembly of the crusher is underway and commissioning is expected to begin in June.
“The installation of the massive new rock crusher at the bottom of Shaft 5 is a noteworthy engineering accomplishment,” said Mr. Friedland. “It marks the final, major underground infrastructure upgrading project needed to resume underground mining, crushing and hoisting operations at Kipushi.”
Main frame of the new underground rock crusher secured onto the base plate at the 1,150-metre level, ready for reassembly and commissioning.
Mr. Friedland said negotiations are ongoing with government agencies – Gécamines, the state-owned miner and Ivanhoe’s partner at Kipushi, and Société Nationale des Chemins de Fer du Congo (SNCC), the DRC’s national railway company – and potential project financiers to advance agreements to launch a new era of commercial production at Kipushi.
“Since acquiring our 68% interest in the Kipushi Project in 2011, our team has worked with Gécamines to achieve our shared objective of resuming commercial production,” Mr. Friedland added. “In parallel with ongoing mine upgrading work and completion of the definitive feasibility study, we are evaluating a number of proposals we have received to fund the remaining infrastructure construction.”
Ivanhoe’s planned resumption of production at Kipushi focused on mining the high-grade Big Zinc Deposit
The Kipushi Mine is owned by Kipushi Corporation (KICO), a joint venture between Ivanhoe Mines (68%) and Gécamines (32%). Kipushi is on the Central African Copper-belt in the province of Haut-Katanga, approximately 30 kilometres southwest of the provincial capital of Lubumbashi and less than one kilometer from the international border with Zambia.
Built and then operated by Union Minière for 42 years, Kipushi began mining a reported 18% copper from a surface open pit in 1924. Then it transitioned to become a high-grade, underground copper, zinc and germanium mine. State-owned Gécamines gained control of Kipushi in 1967 and operated the mine until 1993, when it was placed on care and maintenance due to a combination of economic and political factors. The planned restoration of production at Kipushi is based on initial mining that will be focused on the Big Zinc Deposit.
Before Kipushi was idled in 1993, Gécamines discovered the Big Zinc Deposit at a depth of approximately 1,250 metres below surface and adjacent to the producing Fault Zone (see Figure 1). No mining ever has been conducted on the Big Zinc’s mineral resources.
Ivanhoe’s drilling has upgraded and expanded the Big Zinc Deposit’s Measured and Indicated Mineral Resources to an estimated 10.2 million tonnes grading 34.9% zinc, 0.65% copper, 19 grams/tonne (g/t) silver and 51 g/t germanium, at a 7% zinc cut-off – containing an estimated 7.8 billion pounds of zinc.
During a span of 69 years, Kipushi produced a total of 6.6 million tonnes of zinc and 4.0 million tonnes of copper from 60 million tonnes of ore grading 11% zinc and approximately 7% copper. It also produced 278 tonnes of germanium and 12,673 tonnes of lead between 1956 and 1978. There is no formal record of the production of precious metals as the concentrate was shipped to Belgium and the recovery of precious metals remained undisclosed during the colonial era. However, drilling by Ivanhoe Mines has encountered significant silver values within Kipushi’s current deposits that are rich in zinc and copper.
Most of Kipushi’s historical production was from the Fault Zone, a steeply-dipping ore body rich in copper and zinc that initially was mined as an open pit. The Fault Zone extends to a depth of at least 1,800 metres below surface, along the intersection of a fault in carbonaceous dolomites
Key steps toward the start of a new era of mining at Kipushi
Excellent progress has been made by KICO in modernizing the Kipushi Mine’s underground infrastructure as part of preparations for the mine to resume commercial production. With the underground upgrading program nearing completion, KICO’s focus now will shift to modernizing and upgrading Kipushi’s surface infrastructure to handle and process Kipushi’s high-grade zinc and copper resources.
The current mine redevelopment plan, as outlined in the December 2017 independent, pre-feasibility study (PFS), has a construction period of less than two years, with a life-of-mine average annual production rate of 225,000 tonnes of zinc and cash costs of US$0.48/lb of zinc over an 11-year initial mine life.
The 2017 PFS estimated that Kipushi would have an after-tax NPV of US$683 million and 35% IRR, based on long-term zinc price of US$1.10/lb, with pre-production capital of US$337 million. At the current zinc price of approximately US$1.40/lb, the PFS estimated that Kipushi would have an after-tax NPV of US$1.2 billion and IRR of 51%.
A definitive feasibility study (DFS) is underway to further refine and optimize the project’s economics, taking into consideration the significant capital already invested to date on critical rehabilitation work. Ivanhoe expects to complete the DFS later this year.
“Since the PFS was issued six months ago, we have continued to make important strides toward completion of the underground infrastructure upgrading program,” Mr. Johansson said. “Our goal is to establish Kipushi as one of the world’s major zinc mines.”
Highlights of the 2017 PFS, based on a long-term zinc price of US$1.10/lb, include:
After-tax net present value (NPV) at an 8% real discount rate of US$683 million.
After-tax real internal rate of return (IRR) of 35.3%.
After-tax project payback period of 2.2 years.
Pre-production capital costs, including contingency, estimated at US$337 million.
Existing surface and underground infrastructure allows for significantly lower capital costs than comparable greenfield development projects.
Life-of-mine average planned zinc concentrate production of 381,000 dry tonnes per annum, with a concentrate grade of 59% zinc, is expected to rank Kipushi, once in production, among the world’s largest zinc mines.
Life-of-mine average cash cost of US$0.48/lb of zinc is expected to rank Kipushi, once in production, in the bottom quartile of the cash cost curve for zinc producers globally.
The 2017 PFS was prepared by OreWin, MSA Group, SRK Consulting, Murray & Roberts, Golder Associates and MDM Engineering, a subsidiary of Amec Foster Wheeler. The PFS was prepared in compliance with Canadian National Instrument 43-101 – Standards of Disclosure for Mineral Projects (NI 43-101).
Upgrading of existing underground infrastructure nearing completion; focus now turns to upgrading surface infrastructure, including the rail siding and line from the mine to the existing network at Munama
KICO has completed the refurbishment of a significant amount of underground infrastructure at the Kipushi Project, including a series of vertical mine shafts, with associated head frames, to various depths, as well as underground mine excavations. A series of crosscuts and ventilation infrastructure still are in working condition. The underground infrastructure also includes a series of pumps to manage the influx of water into the mine. A schematic layout of the existing development is shown in Figure 1.
The main production shaft for the Kipushi Mine, Shaft 5 (labelled as P5 in Figure 1), is eight metres in diameter and 1,240 metres deep, and has been upgraded and re-commissioned. The main personnel and material winder has been upgraded and modernized to meet global industry standards and safety criteria. The Shaft 5 rock-hoisting winder, which had an annual hoisting capacity of 1.8 million tonnes, also has been upgraded to international standards and is fully operational.
The main haulage way on the 1,150-metre level between the Big Zinc access decline and Shaft 5 rock load-out facilities has been resurfaced with concrete so the mine now can use modern, trackless, mobile machinery.
In October 2017, Ivanhoe Mines and the DRC’s state-owned railway company, Société Nationale des Chemins de Fer du Congo (SNCC), signed a Memorandum of Understanding (MOU) to rebuild 34 kilometres of track to connect the Kipushi Mine with the DRC national railway at Munama, south of the mining capital of Lubumbashi.
Under the terms of the MOU, Ivanhoe has appointed R&H Rail to conduct a front-end engineering design study to assess the scope and cost of rebuilding the spur line from the Kipushi Mine to the main Lubumbashi-Sakania railway at Munama. The study is underway and construction on the Kipushi-Munama spur line could start later this year. Ivanhoe will finance the estimated US$32 million (plus contingency) capital cost for the rebuilding, which is included within the overall Kipushi 2017 PFS capital cost.
The proposed export route is to utilize the SNCC network from Kipushi to Ndola, connecting to the north-south rail corridor from Ndola to Durban. The rail corridor to Durban via Zimbabwe is fully operational and has significant excess capacity.
Optimized zinc processing methodology for the PFS
The optimized plant design used for the PFS utilizes dense media separation (DMS), followed by milling and a flotation recovery plant. The addition of milling and a flotation recovery plant resulted in an overall recovery of 89.6%, producing a consistent, high-grade concentrate of 58.9% contained zinc. DMS is a simple density-concentration technique that preliminary test work has shown yields positive results for the Kipushi material, which has a sufficient density differential between the waste rock (predominantly dolomite) and mineralization (sphalerite). Furthermore, the addition of a milling and flotation circuit to DMS is expected to improve the project economics as a result of higher concentrate grades.
Given the significant, very-high-grade zinc resource at Kipushi, which is rich in potential by-product credits including copper, silver and germanium, Ivanhoe and the Gécamines technical team are continuing to investigate additional downstream processing options.