Production and Exploration
The DRC is a large producer of key commodities like copper and cobalt
The demand for cobalt, the scarcest raw material in batteries, is predicted to increase from 20,000 tonnes per year (mt/y) in 2019 to over 730,000 mt/y by 2040, according to Benchmark Mineral Intelligence, a London-based EV market analysis firm, as demand for electric vehicles (EV) rises, fuelled by environmental bonuses and regulations enforced by governments. The DRC, by far the world’s largest producer of cobalt, produced 100,000 mt in 2019, down from 104,000 mt in 2018. However, despite the pandemic and the closure of Glencore’s Mutanda operation in late 2019, national production of cobalt increased by 6% year-on-year in the first half of 2020, amounting to 38,816 mt.
Contrary to other copper producing countries around the world, copper production in the DRC also increased in 2020 by 12% year-on-year from January to November to 1.456 million mt, according to the Central Bank of Congo. Demand for copper from EV sales is forecast to increase to 4 million mt by 2035, according to Wood Mackenzie, the global metals and energy consultancy firm. Copper production is forecasted to increase to over 1.6 million mt/y over the next five years in the DRC, as demand from China has rebounded more strongly than expected after a 20% year-on-year decrease in Q1 of 2020.
“We are moving into production at Kamoa-Kakula in the third quarter of 2021. The fact that this was a new discovery is very important for the country as most existing mines in the area were discovered long ago. We have accumulated expenditures of US$1.3 billion in this project so far. It will basically be a mining complex due to the size of the ore body.”
Marna Cloete, President and CFO, Ivanhoe Mines
The beginning of 2020 saw the launch of the Deziwa copper-cobalt mine and processing plant, a joint venture between China Nonferrous Metal Mining (CNMC) and Gécamines. Construction at Deziwa, 35 km east of Kolwezi, began in May 2018 and the mine is estimated to hold 4.6 million mt of copper and 420,000 mt of cobalt. CNMC also launched the DRC’s first large-scale smelter, the Lualaba Copper Smelter (LCS), 45 km from the long-awaited Kamoa-Kakula project, with a capacity to process 400,000 mt/y of copper concentrate and produce 120,000 mt/y of copper blister. LCS is the only major copper smelter in the DRC, however, even at full capacity it cannot treat all of the domestically mined copper. Ivanhoe announced in September 2020 its plans to construct a new copper smelter to treat Kamoa-Kakula copper concentrates. The planned smelter is expected to have a capacity to process 1 million mt/y, producing approximately 250,000 mt/y of refined copper.
The Kamoa-Kakula development in the Katanga province is less than 8 months to its first production and could become the world’s second largest copper mining complex. Total underground development is more than 24.7 km and, as of November 2020, is 7.9 km ahead of schedule. “We are moving into production at Kamoa-Kakula in the third quarter of 2021. This is our flagship project and it is a joint venture between Ivanhoe and Zijin Mining, while the DRC government holds a 20% interest. The fact that this was a new discovery is very important for the country as most existing mines in the area were discovered long ago,” explained Marna Cloete, president and CFO at Ivanhoe Mines, the Canadian mining major with development projects across southern Africa. “We have accumulated expenditures of US$1.3 billion in this project so far, and we are quite far advanced to bring the first phase into production. The operation will have a 3.8 million mt/y concentrator. Kamoa-Kakula will be developed in phases over the next years – it will basically be a mining complex due to the size of the ore body.”
The Katanga province, home to the Kamoa-Kakula project, has been at the centre of the DRC’s tempestuous history and was a key battleground in the second Congo war (1997 – 2003). The region’s extraordinary mineral wealth has fuelled its desire for autonomy and exposed it to cycles of violence. It is currently the source of over half the country’s fiscal revenue. “Kamoa-Kakula is by far the most interesting project at this time. The area shows great potential for more exploration and future development. There are also a number of investments from Chinese-owned mines in exploration stage or expected to start operating over the next few years,” confirmed Stephane Goupil, country manager of Epiroc in the DRC.
Elsewhere, the Kibali combined open pit and underground gold mine in the northeast of the DRC is one of the largest gold mines in Africa. The JV between Barrick (45%), AngloGold Ashanti (45%) and Société Miniére de Kilo-Moto (10%) commenced in 2013 and is expected to produce 600,000 oz/y of gold for the first 12 years, which it exceeded in 2019 with a production of 814,027 oz. On the other hand, the ostracized artisanal mining industry produces on average 15 to 22 mt/y of gold and attracts attention from armed groups, who control approximately 65% of the country’s gold mines. The mined gold flows through complex supply chains and smuggling networks beginning with Uganda and Rwanda involving infamous groups such as the Hutu militia. Armed groups clashing with industrial gold miners such as Banro Corporation, the Canadian mining company operating in the DRC since 2004, have severely impacted operations and forced Banro to sell their Namoya mine in Congo's eastern Maniema and South Kivu provinces as they were forced to suspend operations. Repeated attacks by the Mai Mai militia made it impossible for the gold producer to keep staff and assets safe; in 2019 gunmen, in the fifth of a series of such incidents, two of its workers were kidnapped.
“There are continued reports of several towns in the east being attacked by or falling under the temporary control of armed groups, which is where the gold exploration projects are taking place. Security risks, complemented with the pandemic, are the biggest hindrances to exploration activities in the DRC at the moment.”
Tobias Posel, Managing Director, GeoQuest
Insecurity is an obstacle that also hinders exploration. “Constant security challenges and social unrest are aggravated by low governmental support. This increases the risks to exploration, which are already high in remote areas in the DRC,” highlighted Tobias Posel, managing director of GeoQuest, a consultancy and contracting company focused on exploration and environmental services in the DRC. “There are continued reports of several towns in the east being attacked by or falling under the temporary control of armed groups, which is where the gold exploration projects are taking place. Security risks, complemented with the pandemic, are the biggest hindrances to exploration activities in the DRC at the moment.”