Ivanhoe holds 'captive audience' on Congo sulphuric acid market, CEO says
SANTIAGO – Ivanhoe Mines has a "captive audience" for its sulphuric acid in the Democratic Republic of Congo, its CEO said on Wednesday, as prices for the chemical soar on limited supplies due to the Iran conflict.
Vancouver-based Ivanhoe this year started selling sulphuric acid as a byproduct of copper smelting at its Kamoa-Kakula project to other mine operators on the DRC copper belt, which need acid to dissolve copper from ore in a process known as leaching.
Supplies from the key Middle East region have struggled to reach world markets, raising fears of a global sulphuric acid squeeze. The DRC alone has an acid market of about two-million metric tons per year, Ivanhoe CEO Marna Cloete told Reuters on the sidelines of a copper industry gathering in Santiago.
"We just produced just over 100 000 t in the first quarter, but that's going to the likes of Glencore, to ERG (Eurasian Resources Group) ... so it's local distribution," she said, adding that annual acid output would reach 600 000 t to 700 000 t once its smelter was running at full capacity.
"The local market is more than sufficient for us to sell to," she added, noting that restrictions on exporting sulphur from neighbouring Zambia had stopped DRC companies from making their own acid. "We've got a captive audience in terms of our distribution," Cloete said.
Ivanhoe said in a statement on Monday the Kamoa-Kakula smelter had ramped up to 60% of capacity, with a further increase constrained by a lack of concentrate feed.
The company's price for high-strength sulphuric acid was around $500/t in the first quarter, with spot prices generally increasing over the three months, Ivanhoe said.
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