China’s Zijin Mining Group said on Wednesday one of its subsidiaries and trader Citic Metal would each buy 50% of the copper production from the recently-launched first phase of its Kamoa-Kakula mine in the Democratic Republic of Congo (DRC).
The deals will see wholly-owned Zijin unit Gold Mountains (H.K.) International Mining Co Ltd and Citic Metal, part of state-owned conglomerate Citic Group, split the initial offtake from what is expected to be the world’s highest-grade major copper mine.
The agreements were done “on competitive arms-length commercial terms” and include treatment and refining charges based on the annual industry benchmark, Zijin said in a filing.
They are for both copper concentrate directly from Kamoa-Kakula, which started production on May 25, and blister copper processed at a nearby smelter, it added.
Canada-based Ivanhoe Mines, Zijin’s main partner in the Kamoa Copper joint venture that operates the mine, also announced the deals on Wednesday, saying that first-phase output is projected to be approximately 200,000 tonnes of copper per year.
The buyers will be responsible for arranging freight and shipment of the copper to its final destination, initially via the port of Durban, South Africa, Ivanhoe said.
Citic Metal and the Zijin unit will each provide an advance payment of up to $150 million, which can be drawn on by Kamoa Copper from June 10 this year until May 31, 2023.
“The facility will bear an annual interest rate of 8% and will be offset against provisional payments due to Kamoa Copper from product deliveries,” Ivanhoe added.