(Bloomberg) -- Ivanhoe Mines Ltd. will sell the zinc it produces from a large new mine in the Democratic Republic of Congo to Trafigura Group and China’s Citic Metal Co.

The Kipushi zinc mine produced its first concentrate on June 14, Ivanhoe said Tuesday. The operation is set to be one of the world’s largest zinc mines, with output projected to range between 100,000 and 140,000 tons this year. 

Ivanhoe signed offtake agreements for its zinc concentrate with Citic Metal and Trafigura, as Bloomberg reported last month, and expects to sign more agreements in the coming months. The company said it has also arranged financing facilities totaling $170 million provided by Citic Metal, Trafigura and First Bank DRC of Kinshasa, with $50 million drawn to date.

The market for zinc concentrates has been extremely tight, with the processing fees miners pay to smelters plunging as mine supply disappoints and smelters in Europe reopen in the wake of the energy crisis of 2021 to 2022. On the spot market, the so-called treatment charges have fallen to just $5 a ton, the lowest since at least 2014, according to Fastmarkets, while annually agreed “benchmark” treatment charges dropped this year.

Ivanhoe’s agreements contain standard, international commercial terms, including payables and treatment charges based on the zinc industry’s annual benchmark, the company said. 

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