China Molybdenum Co said on Friday it would spend $2.51 billion to roughly double production of copper and cobalt at its giant Tenke Fungurume mine (TFM) in the Democratic Republic of Congo.
The bumper investment comes as prices for both metals have jumped in 2021 as demand rebounds from the COVID-19 pandemic.
China Moly said in a filing that the $2.5 billion investment – which will go toward building three ore production lines – would boost average annual copper output at the mine by 200,000 tonnes and increase cobalt output by 17,000 tonnes.
“The project is expected to be completed and put into production in 2023,” it said, adding the end-products would be copper cathodes and cobalt hydroxide.
China Moly has an 80% stake in Tenke Fungurume, one of the world’s largest copper-cobalt deposits. The mine produced around 182,600 tonnes of copper and 15,400 tonnes of cobalt in 2020.
Output is forecast to be higher this year, while China Moly said last month it had started trial production on a separate TFM expansion project that will add 88,500 tonnes of copper cathodes and 7,280 tonnes of cobalt annually.
Analysts at Daiwa Capital Markets said in a note on Friday the latest expansion could help China Moly forge closer ties with new energy companies in China, the world’s top consumer of copper and battery metal cobalt.
“Due to legacy contracts, the vast majority of cobalt output from TFM is sold to Europe, but output from the newly announced project today can probably be sold to Chinese battery/battery material companies directly,” they added.
China Moly acquired a 56% stake in TFM from U.S. miner Freeport-McMoRan Inc in 2016 before raising its holding in 2019.
It said would finance the $2.5 billion investment with its own funds and through bank loans.