Katanga Outlook - from Press ReleaseOutlook On April 29, 2019 the Company announced that KCC had commenced a comprehensive business review targeting mining efficiencies and processing improvements as well as enhancements to product quality realizations and overhead cost reductions (the "Review").
Initial indications suggest there may be scope for margin improvements in the order of $200-250 million per annum. Further work, seeking to develop detailed implementation plans to deliver these improvements, is being undertaken, which if successful, are expected to be realizable by 2022.
To effect these improvements, KCC has created a transformation office to facilitate a 36 months turnaround plan, designed to unlock the potential of the people and assets across the site. To ensure timely project delivery, KCC has defined business priorities such as, but not limited to, improved efficiencies, maintenance, labor productivity and production quality, while decreasing the costs associated with procurement, sourcing and information technology.
These improvements are expected to materially increase the cash flow generation of KCC from 2022, when it is projected to achieve targeted life of mine average production of approximately 300kt of copper and 30kt of cobalt, resulting in a steady state copper unit cash cost of $1.65/lb, before cobalt by-product credits, and $0.75/lb after cobalt by-products revenue, net of allocable cobalt direct production and realization/selling costs of c$0.60/lb.1
Production guidance for copper and cobalt has been moderately revised, compared to the August 2019 release, as follows:
Realization costs are based on an assumed copper price of $6,500/t and realized cobalt price of $15/lb.
| | 2019 | 2020 | 2021 |
| Copper(1) | 233 | 270 | 295 |
| Cobalt(2) | 16 | 29 | 32 |