Ivanhoe Mines (TSX: IVN) has reported a solid financial performance for 2024, booking a remarkable $193 million profit.
However, despite these impressive figures, industry experts caution that the company’s ambitious growth plans and operational setbacks might hinder its long-term success.
Record Output and Revenue Surge
Ivanhoe Mines’ flagship Kamoa-Kakula copper complex in the Democratic Republic of Congo (DRC) set a new record in 2024, producing 437,061 tonnes of copper in concentrate.
This contributed to a staggering $3.11 billion in revenue. The company’s adjusted earnings before interest, tax, depreciation, and amortization (EBITDA) rose to $625 million, up from $604 million in 2023.
Analyst’s Concerns
However, Canaccord Genuity mining analyst Dalton Baretto has highlighted significant concerns. In January, a fire knocked out backup power, delaying Ivanhoe’s forecast.
Baretto criticized the company’s $1.2 billion expansion plan for the Platreef project in South Africa, noting the aggressive timelines, capital expenditures, and higher-than-expected costs.
Consequently, Canaccord Genuity adjusted their estimates, lowering the target share price to C$24 from C$27.50.
Following the news, Ivanhoe shares dropped 11% to C$14.97, nearing the bottom of their 12-month range.
Operational Challenges and Strategic Moves
Despite these setbacks, Kamoa-Kakula’s founder and co-chairman, Robert Friedland, lauded the copper complex’s performance, particularly its record 133,819 tonnes of copper in the last quarter of 2024.
He emphasized the completion of Africa’s largest and greenest copper smelter, which promises enhanced profitability, reduced costs, and improved efficiencies.
However, Ivanhoe faced challenges such as increased reliance on imported and backup power. The site’s stage-three expansion is complete, with the new direct-to-blister copper smelter scheduled to start in April, following a three-month delay.
Kipushi Mine’s Struggles
The Kipushi mine, another crucial asset in the DRC, reached its design processing rates in late 2024 despite initial challenges.
However, an electrical failure and subsequent flooding delayed further development. The 344,000-tonne surface stockpile ensures continued operations, but analysts warn that delays could impact production later this year.
Platreef Project Expansion
Ivanhoe’s ambitious expansion plan for the Platreef project aims to ramp up annual processing to 700,000 tonnes by the end of the year, producing 100,000 ounces of platinum group metals and gold. The second stage targets a boost in mining and processing rates to 4.1 million tonnes per year, with an all-in sustaining cost (AISC) of around $700 per ounce.
A third stage plans to increase capacity to 10.7 million tonnes per year, requiring an additional $800 million in capital expenditure. By 2030, Ivanhoe aims to produce 1 to 1.2 million ounces per year at an AISC of approximately $650 per ounce.
Global Impact and Market Repercussions
Ivanhoe’s performance and challenges have significant implications for the Congolese mining sector and the global market.
The DRC’s rich mineral reserves play a crucial role in the global supply chain, and any operational issues or delays at key sites like Kamoa-Kakula and Kipushi can ripple through the industry.
As Ivanhoe navigates its ambitious growth plans and operational hurdles, stakeholders will closely monitor its progress and the broader market impact.
Read More:Ivanhoe Mines Embarks on Ambitious $600 Million Notes Offering – Jaina News
Kamoa-Kakula Achieves Record 437,061 Tonnes of Copper in 2024 – Jaina News
Kipushi Mine: A Historic Revival for the Mining Industry in the DRC – Jaina News
