Ivanhoe Mines announces MOU to commence exports of concentrate from Kamoa-Kakula Copper Complex via Lobito Atlantic Rail Corridor
August 16, 2023
Ivanhoe Mines announces MOU to commence exports of
concentrate from Kamoa-Kakula Copper Complex via Lobito
Atlantic Rail Corridor
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Up to 10,000 tonnes of copper concentrate to be exported via
Angolan Lobito Ocean Port in Q4 2023
■
MOU is first commercial agreement under new concession for
exporting metals from the DRC using the Lobito Atlantic Rail
Corridor
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Distance from Kamoa-Kakula to Lobito Port is just over half
that compared with Durban, South Africa
■
Rail corridor passes through Ivanhoe’s Western Foreland
licences and within five kilometres of Kamoa-Kakula
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Rail corridor set to transform economic and social
development of the DRC, as well as its neighbouring countries,
accelerating regional industrialization
■
The ceremony celebrating the award of the 30-year concession
to new rail operator was attended by the Presidents of DRC,
Angola and Zambia
KOLWEZI, DEMOCRATIC REPUBLIC OF CONGO – Ivanhoe Mines (TSX: IVN;
OTCQX: IVPAF) Executive Co-Chair Robert Friedland and President Marna Cloete
announce today that Kamoa Copper S.A. (Kamoa Copper) has signed a
memorandum of understanding (MOU) with Lobito Atlantic International SARL
(“LAI”, or the “Consortium”), for the transportation of Kamoa-Kakula’s copper
concentrate by rail to the Atlantic Ocean port of Lobito in Angola.
The rail line linking the DRC Copperbelt to the port of Lobito, Angola is known as
the “Lobito Atlantic Railway Corridor” or “Lobito Corridor”. The rail line extends
for 1,739 kilometres from Lobito to Kolwezi in the DRC, passing within five
kilometres of the Kamoa-Kakula licence boundary and through the Western
Foreland exploration licences (shown in Figure 2).
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In July 2022, the Consortium was formally awarded a 30-year concession for
railway services and support logistics in Angola. LAI is a consortium comprised
of leading global commodities trading group Trafigura Pte Ltd; Mota-Engil
Engenharia e Construcao Africa SA (“Mota-Engil”), an international construction
and infrastructure management company that first started operating in Angola in
1946; and Vecturis SA, an independent rail operator.
The Consortium has committed to invest $455 million in Angola and up to a
further $100 million in the DRC on the improvement of the Lobito Corridor’s rail
infrastructure, capacity and safety, including rolling stock consisting of over
1,500 wagons and 35 locomotives. There is also potential for additional
investment in the future as the opportunity is explored to further extend the
Lobito Corridor into Zambia.
The Lobito Corridor will reduce pressure on the country’s other logistics
corridors. This is expected to not only reduce the cost of exporting from, but also
reduce the cost of importing into the DRC Copperbelt. Thereby, accelerating
DRC’s, social and economic development, as well as the industrialization of the
wider region.
The President of the Democratic Republic of Congo, His Excellency Mr Felix
Tshisekedi, made the following comments in a recent television interview with La
Radio-Télévision Nationale Congolaise (RTNC):
“I am very committed to cooperation with our neighbours. We gain two partners
in the [Lobito Corridor] project, Angola and Zambia. This will benefit our
populations nearby and further away… Indeed that is the goal, to create national
integration, resulting in ease of movement for goods and people inside our
country... So that the various regions can engage in trade among themselves.”
“We have no time to stop and enjoy our small victories. We need to work
hard…The interest of the people must be taken into account and we are focused
on that… The priority for me is to protect our population and ensure they are
healthy… I want this country to be stable so that we can focus on our
development over the long term.”
Link to full interview: https://www.youtube.com/watch?v=u3llKuoPqlk
Ivanhoe Mines’ Founder and Executive Co-Chairman, Robert Friedland
commented:
"The Lobito Corridor is set to become a crucial trade route for copper and other
critical minerals from a uniquely strategic region of Africa… metals that are so
desperately needed for our planet's energy transition. Thanks to the forward-
thinking investments by our shareholders CITIC, who originally upgraded the port
and rail line, there is now the possibility of open access rail from the Copperbelt
to the deep-water, Atlantic Ocean port of Lobito. This type of modern
infrastructure will be critical as mines like Kamoa-Kakula continue to expand, and
as more tier-one copper discoveries are made in the Western Foreland... the best
copper hunting ground on the planet.
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“The Lobito Corridor is the shortest and most direct export and import route from
the Copperbelt to the seaborne international market, which should provide for
quicker turnaround times and lower costs. Most importantly, logistics on the rail
corridor will incur significantly lower carbon emissions than the alternative by
truck – further enhancing Kamoa-Kakula’s commitment to produce ultra-green
copper.
"The U.S. Government's support for the Lobito Corridor and proposed financing
highlights the need for a coordinated global effort to upgrade infrastructure in
sub-Saharan Africa. To tackle the challenges of climate change, international
cooperation is essential in developing responsible supply chains. This
collaboration must involve local communities, ensuring a sustainable and ethical
approach to extracting minerals in the areas where they are found."
Figure 1. Map of export routes currently used by Kamoa-Kakula in red, as
well as the Lobito Railway Corridor route in orange. Logistics costs
account for over 30% of Kamoa-Kakula’s total cash costs (C1), due to the
long in-land distances travelled by road for exports to reach port.
An initial trial shipment of up to 10,000 tonnes of copper concentrate from
Kamoa-Kakula’s Phase 1 and 2 concentrators will be transported along the Lobito
Rail Corridor in Q4 2023. Once at the port of Lobito, the concentrate will be sold
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to international markets. Information will be gathered from the trial shipment on
greenhouse gas (GHG) savings, transit times, operating costs and other
operational factors.
Currently, Kamoa-Kakula trucks its copper concentrates by road across sub-
Saharan Africa to the ports of Durban in South Africa, Dar es Saleem in Tanzania,
Beira in Mozambique, and Walvis Bay in Namibia, from where they are shipped
onto international markets. Approximately 90% of the concentrates are shipped
from Durban and Dar es Saleem. Not only is the distance to the port of Lobito
from Kamoa-Kakula greatly reduced (see Figure 1), but also transportation by rail
is both quicker and significantly less energy intensive.
Once fully operational, the Lobito Atlantic Railway Corridor could significantly
improve the logistics costs and carbon footprint of exporting metals from the
Kamoa-Kakula Copper Complex, the Kipushi zinc-copper-germanium-silver mine,
as well as the future development of any copper discoveries within the Western
Foreland Exploration Project.
Figure 2. Map of Kamoa-Kakula and Western Foreland licences with local
road and rail infrastructure.
On July 4, 2023, a ceremony took place in Lobito, hosted by the Municipal
Administration of Lobito, marking the transfer of railway services and support
logistics of the Lobito Atlantic Railway Corridor to the Consortium. The event was
attended by Hakainde Hichilema, President of the Republic of Zambia; João
Manuel Gonçalves Lourenço, President of the Republic of Angola; Felix
Tshisekedi, President of the Democratic Republic of the Congo; and Jeremy Weir,
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Executive Chairman and Chief Executive Officer of Trafigura.
Link to the Trafigura press release made on July 4, 2023:
https://www.trafigura.com/press-releases/transfer-commences-of-the-
concession-of-railway-services-and-support-logistics-of-the-lobito-corridor-in-
angola-to-the-lobito-atlantic-railway/
The MOU follows the recent announcement by the United States International
Development Finance Corporation (DFC), which is currently conducting due
diligence for a potential $250-million investment to finance the commercialization
of the Lobito Atlantic Railway Corridor.
Link to the full U.S. Government press statement made on May 20, 2023:
https://www.whitehouse.gov/briefing-room/statements-releases/2023/05/20/fact-
sheet-partnership-for-global-infrastructure-and-investment-at-the-g7-summit/
Further, on January 27, 2023, the governments of Angola, DRC and Zambia
signed the Lobito Corridor Transit Transport Facilitation Agency Agreement
(LCTTFA). The tripartite LCTTFA aims to coordinate the joint development
activities of the Lobito Atlantic Railway Corridor as an alternative, strategic route
to export markets for both Zambia and the DRC.
The Atlantic Ocean port of Lobito, Angola. Up to 10,000 tonnes of copper
concentrate from Kamoa-Kakula to be exported from the port in Q4 2023.
The MOU is the first commercial agreement under the new concession for
exporting metals from the DRC using the Lobito Atlantic Rail Corridor.
Photo source: Bloomberg.
All figures are in U.S. dollars unless otherwise stated.
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About Ivanhoe Mines
Ivanhoe Mines is a Canadian mining company focused on advancing its three
principal projects in Southern Africa; the expansion of the Kamoa-Kakula Copper
Complex in the DRC, the construction of the tier-one Platreef palladium-rhodium-
platinum-nickel-copper-gold project in South Africa; and the restart of the historic
ultra-high-grade Kipushi zinc-copper-germanium-silver mine, also in the DRC.
Ivanhoe Mines also is exploring for new copper discoveries across its circa
2,400km2 of 90-100% owned exploration licences in the Western Foreland, located
adjacent to, or in close proximity to, the Kamoa-Kakula Copper Complex in the
DRC.
Information contact
Investors
Vancouver: Matthew Keevil +1.604.558.1034
London: Tommy Horton +44 7866 913 207
Media
Tanya Todd +1.604.331.9834
Forward-looking statements
Certain statements in this news release constitute "forward-looking statements" or
"forward-looking information" within the meaning of applicable securities laws. Such
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regarding future events, performance and results and speak only as of the date of this
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Such statements include without limitation, the timing and results of: (i) statements
regarding the MOU with Trafigura, and specifically that commencing in Q4 2023, the
trial will consist of up to 10,000 tonnes of copper concentrate from Kamoa-Kakula’s
Phase 1 and 2 concentrators and that once at the port of the Lobito, the concentrate will
be sold to international markets; (ii) statements that the Lobito Corridor is set to become
a crucial trade route from a uniquely strategic region in Africa for copper and other
critical minerals; (iii) statements that the Lobito Atlantic Rail Corridor is set to transform
regional logistics in the DRC and neighbouring countries; (iv) statements that the
Western Foreland remains the best copper hunting ground on the plant; (v) statements
regarding a potential $250-million investment by DFC to finance the commercialization
7
of the Lobito Atlantic Railway Corridor; and (vi) statements regarding the Lobito Corridor
significantly improving logistics costs and carbon footprint of exporting metals from the
Kamoa-Kakula Copper Complex, the Kipushi zinc-copper-germanium-silver mine, and
any future copper discoveries in the Western Foreland Exploration Project.
Furthermore, the company has based its assumptions and analysis on certain factors
that are inherently uncertain. Uncertainties include: (i) the adequacy of infrastructure; (ii)
geological characteristics; (iii) metallurgical characteristics of the mineralization; (iv) the
ability to develop adequate processing capacity; (v) the price of copper, nickel, zinc,
platinum, palladium, rhodium and gold; (vi) the availability of equipment and facilities
necessary to complete development; (vii) the cost of consumables and mining and
processing equipment; (viii) unforeseen technological and engineering problems; (ix)
accidents or acts of sabotage or terrorism; (x) currency fluctuations; (xi) changes in
regulations; (xii) the compliance by joint venture partners with terms of agreements; (xiii)
the availability and productivity of skilled labour; (xiv) the regulation of the mining
industry by various governmental agencies; (xv) the ability to raise sufficient capital to
develop such projects; (xvi) changes in project scope or design; (xvii) recoveries, mining
rates and grade; (xviii) political factors; (xviii) water inflow into the mine and its potential
effect on mining operations; and (xix) the consistency and availability of electric power.
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three and six months ended June 30, 2023, and its Annual Information Form, and
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