Ivanhoe Mines (TSX: IVN) has disputed a claim by its Chinese partner, Zijin Mining, regarding operational issues at their jointly owned Kakula copper mine in the Democratic Republic of Congo.
On Tuesday, Ivanhoe announced a temporary suspension of activities at the underground mine following recent seismic activities, but said the western section of the mine had been declared safe for operations to resume imminently.
However, the Canadian miner disagrees with Zijin Mining’s claim in a press release this week of “multiple roof-falling and rib-spalling in the eastern section of the [Kakula] mine.”
“Preliminary indications suggest that seismic activity resulted in a redistribution of forces underground and caused ‘scaling’, or rock falls, from the sidewalls of certain mining areas,” Ivanhoe clarified in a press release Friday.
Zijin also warned that the copper mine, part of the larger Kamoa-Kakula complex, might miss its annual production guidance. Ivanhoe refutes this claim as well, emphasizing that a full investigation is still underway.
The company said its senior management, along with geotechnical specialists, are conducting a comprehensive inspection of the Kakula underground mine.
“Results so far show that there is no evidence of collapsing stopes or structural pillars,” Ivanhoe said.
In a report published Tuesday, BMO Capital Markets said that current information does not indicate a “material impact,” as milling operations continue at reduced capacity using stockpiled ore. The firm added that the described underground damage does not appear extensive.
Once the investigation concludes, Ivanhoe said it will determine whether the temporary suspension will affect the annual production guidance for the Kamoa-Kakula mining complex.
A more detailed update is expected by next Tuesday.
Ivanhoe recently reaffirmed its annual copper production guidance of 520,000 to 580,000 tonnes of concentrate. In April, it produced a record 50,176 tonnes at the Kamoa-Kakula complex.
The joint venture ownership is split between Ivanhoe (39.6%), Zijin Mining (39.6%), Crystal River Global (0.8%), and the DRC government (20%).
Shares of Ivanhoe Mines fell 1.2% on Friday morning, with the company’s market capitalization standing at C$17.4 billion ($12.6 billion).
