Dear fellow shareholders,
We hope this letter finds you in good health and high spirits. As Co-Chairs of Ivanhoe Mines, it is our privilege to share with you the significant progress and growth that our company has achieved over the past year and to provide you with an outlook on our ambitious plans for the future. We remain committed to creating consistent value for you, our loyal shareholders, and ensuring that our actions contribute to sustainable growth for our host communities, our environment, and our business.
There is no doubt that 2022 was another groundbreaking year for Ivanhoe Mines. The dedication of our talented employees and visionary management team has led to outstanding progress on our core operations and progressive development across our tier-one mining portfolio in Southern Africa. Our global partnerships—including with CITIC Metal, Zijin Mining, our many loyal shareholders, our host governments, and our local communities—have been a driving force in our success.
First and foremost, we are proud to report that Ivanhoe Mines recorded a record profit of $434 million in 2022—underpinned by the success of the Kamoa-Kakula copper joint venture in the Democratic Republic of Congo, which contributed a remarkable $405 million to our bottom line during the year. Kamoa-Kakula produced 333,497 tonnes of copper during the year and recognized record annual revenue of $2.15 billion and record EBITDA of $1.39 billion.
The Kamoa-Kakula debottlenecking program for the Phase 1 and Phase 2 concentrators was completed ahead of schedule and on budget, increasing nameplate ore processing capacity by 22% and copper production capacity to 450,000 tonnes per annum by the second quarter of 2023. Furthermore, Kamoa-Kakula’s Phase 3 expansion is on track for completion during the fourth quarter of 2024, continuing our industry-leading copper growth story, and raising copper production capacity to an average of 620,000 tonnes per annum over the subsequent ten years, at an expected C1 cash cost of just $1.22/lb.
This expansion includes the construction of Africa’s largest direct-to-blister copper smelter and an additional 178 megawatts of clean hydroelectricity for the Democratic Republic of Congo grid through the Inga II – G25 hydropower plant, which is being refurbished by Ivanhoe Mines under a public-private partnership to ensure that Kamoa-Kakula copper is mined in a truly sustainable way.
Sustainability, corporate social responsibility, and an unwavering commitment to the jurisdictions where we explore and operate will forever be at the heart of this organization. In 2022, activities at Kamoa-Kakula accounted for roughly 4% of the Democratic Republic of Congo’s total Gross Domestic Product, and we believe the formation of an ecosystem beyond the mine site will truly create sustainable opportunities for the people directly impacted by our operations. Therefore, we continue to maintain a strong focus on local employment, with more than 95% of Kamoa-Kakula’s workforce sourced from nearby communities, and simultaneously equip the local communities with enduring entrepreneurial skills and training. Ivanhoe Mines declared long ago that we are committed to our host countries and the people we work with every day, and we remain resolute in this commitment.
Our dedication to fostering a more diverse workforce remains a key pillar in our company's core values. Under the leadership of our President, Ms. Marna Cloete, a focus on improving gender diversity within our workforce has made significant progress. In 2022, women represented 10% of our employees, and we have set a target of reaching 15% by 2025. We have 20% female representation in executive management positions and have committed to maintaining this level of representation going forward. Our dedication to inclusion reinforces our culture, strengthens our workforce, and fortifies the company's foundation.
Looking ahead, we are excited to share our future plans for Ivanhoe Mines. Construction at the Kipushi zinc-copper-germanium-silver joint venture in the Democratic Republic of Congo is progressing rapidly, with first zinc concentrate production expected in the third quarter of 2024, and annual production estimated at around 240,000 tonnes of ultra-high-grade zinc. We are also working diligently in the construction of our Platreef palladium, nickel, rhodium, platinum, copper and gold mine in South Africa—with Phase 1 operations also on schedule for production by the third quarter of 2024—another tier-one, generational ore body that has the potential to significantly transform South Africa’s platinum-group metals industry.
In addition to these primary catalysts, we are targeting an initial Mineral Resource estimate for our 90-100%-owned Western Foreland Copper Exploration Project in the Democratic Republic of Congo this year, followed closely by an initial Preliminary Economic Assessment. Western Foreland remains a highly strategic asset, given the company’s ownership interest, its proximity to the world’s fast-growing copper complex in Kamoa-Kakula, and its vast geological potential for new world-scale copper discoveries. With a 2023 exploration program budget for the Western Foreland Project of approximately $31 million and up to 70,000 metres of drilling, we continue to forge new frontiers and seek more opportunities for growth and expansion in key minerals we all require for modern technology, sustainable energy, and decarbonization.
Our long-term vision for Ivanhoe Mines is grounded in a tactical, sustainable approach to growth in strategic metals, with our projects setting new benchmarks for excellence within the mining industry. Our achievements are a testament to our unwavering focus on fostering innovation, empowering local communities, prioritizing environmental stewardship, and remaining transparent in all our dealings — values that we know are crucial to all citizens of this planet.
We believe that the accomplishments and plans outlined in this letter will instil a sense of pride and confidence in our continued growth and evolution into a modern, diversified major mining company. We remain very confident in the basket of future-focal commodities in our portfolio, including copper, nickel, platinum-group metals and zinc, which are facing long-term supply challenges and rising demand driven by population growth, technology, and ultimately, to combat climate change for us all.
Together, we are committed to delivering long-term value that benefits our shareholders, employees, and partners, as well as the communities and environments in which we operate. In a time of global conflict and economic division, Ivanhoe Mines stands as a beacon of what can be accomplished with international cooperation and long-term, focused investment.
On behalf of everyone at Ivanhoe Mines, we sincerely appreciate your unwavering support in helping this organization achieve new heights. Thank you for being a shareholder.