Luoyang Molybdenum will invest US $2.51 billion to double copper and cobalt production at (TFM), its giant Tenke Fungurume mine in the Democratic Republic of the Congo.
The project is expected to be completed and launched in 2023, including the construction of three ore production lines. The company said in a filing to the Shanghai Stock Exchange that it expected to increase the mine's average annual copper production by 200000 tons and cobalt production by 17000 tons.
Luoyang Molybdenum began trial production in a separate expansion of the mine in July and is expected to produce 88500 tons of cathode copper and 7280 tons of cobalt hydroxide. It also has a design capacity to handle 3.3 million tons of ore per year.
The new investment is financed by the Chinese miner's own funds and bank loans, both of which have soared this year as the economy rebounded from the covid-19 pandemic, having a positive impact on demand.
Copper on the London Metal Exchange has risen 23 per cent so far this year after hitting an all-time high of nearly $10750 a tonne in May. Copper prices rose on Friday after trade unions in EsCondida, Chile, the world's largest copper mine, said workers were ready to strike, sparking concerns about a reduction in copper supply.
The price of cobalt, a key component of batteries that power electric cars, rose 64 per cent to about $52000 a tonne.
Luoyang Molybdenum acquired a controlling stake in Tenke Fungurume, one of the world's largest copper and cobalt mines, from US mining company Freeport-McMoRan (NYSE:: FCX)) in 2016 for $2.65 billion. In 2019, it spent another $1.14 billion to increase its stake to 80 per cent.
In 2020, TFM produced about 182600 tons of copper and 15400 tons of cobalt. The output is expected to be higher this year.
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