Operations at Ivanhoe Mines' (TSX:IVN,OTCQX:IVPAF) Kakula mine in the Democratic Republic of the Congo (DRC) remain suspended after seismic activity was reported at the site.
Ivanhoe initially disclosed the interruption on May 20, when seismic activity was first detected, but extended the temporary shutdown on Monday (May 26) following several days of ongoing seismic events.
Employees working in the mine have been safely brought above ground, and mobile equipment has been removed.
Ivanhoe indicated that tremors are expected to continue for several weeks, and it could be some time before work crews will be allowed back on site. The shutdown has also impacted underground pumping and electrical infrastructure, resulting in an increase in water inflow to the underground mine, which will further affect the restart timeline.
The company notes that a dewatering plan using additional pumping equipment is in development.
Ivanhoe founder and Executive Co-Chairman, Robert Friedland, focused on positive takeaways from the shutdown.
“What has transpired will give us valuable insight into managing geotechnical conditions and maintaining critical pumping infrastructure, which will allow us to future-proof and safely restart mining operations,” he said.
The mine is part of the larger Kamoa-Kakula copper complex, a 40/40/20 joint venture between Ivanhoe Mines, China’s Zijin Mining Group (OTC Pink:ZIJMF,HKEX:2899) and the DRC government. The complex is one of the world's largest copper-mining operations, with average annual output of 1.09 billion pounds of copper concentrate.
While Ivanhoe and Zijin are working together to reopen the mine, the two companies have been at odds over the severity of the seismic activity. On May 23, Zijin said seismic activity had resulted in “multiple roof-falling and rib-spalling in the eastern section of the mine.” In a rebuttal released the same day, Ivanhoe said seismic activity had caused a redistribution of forces underground, resulting in “'scaling,' or rockfalls, from the sidewalls of certain mining areas.”
The neighboring Kamoa mine and its Phase 3 concentrator will continue to operate as normal. Phase 1 and 2 concentrators, which service the Kakula mine, will also continue to operate from supplies from stockpiled material.
Ivanhoe said the suspension of operations has forced the company to withdraw its production and cost guidance for 2025, which had been set at 520,000 to 580,000 metric tons of copper.
Shares of Ivanhoe slumped 17 percent, sinking from C$12.85 to C$10.66, following the company's Monday announcement. As of Wednesday (May 28) morning, shares were priced at C$11.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
