Ivanhoe Mines plunges 16%: How seismic turbulence shook the world’s hottest copper project

Ivanhoe Mines Ltd. faced one of its steepest single-day stock declines in years after a sudden escalation of seismic activity forced the company to suspend underground operations at its flagship Kakula copper mine in the Democratic Republic of the Congo. Shares plunged by 16.19% on Monday to close at CAD $10.77, following an intraday drop of as much as 18.4% on the Toronto Stock Exchange, rattling investors and raising questions about the project’s near-term production outlook.

The company announced on May 26 that underground mining activities at the Kakula section of the vast Kamoa-Kakula Copper Complex remain temporarily halted. This marks a critical operational setback for one of the world’s most anticipated and high-grade copper ventures.

Why Did Ivanhoe Mines Suspend Kakula Operations?

The decision to suspend operations follows a string of seismic events that have intermittently disrupted the underground sections of the Kakula mine since May 20, 2025. Ivanhoe Mines, alongside its Chinese joint venture partner Zijin Mining, halted underground work once again on May 25 as tremors persisted. All underground personnel were safely evacuated, and no injuries were reported—a testament, management said, to the stringent safety protocols in place.

According to Ivanhoe’s official update, seismic instability has impacted pumping stations and electrical systems underground, with rising water inflow further complicating the remediation process. The company is now prioritizing dewatering operations and the restoration of essential infrastructure before any underground access can be considered safe.

While the root cause of the seismic activity is under investigation by a team of global geotechnical experts, initial guidance suggests that disruptions could extend for weeks, further affecting access and production.

How Are Ivanhoe’s Operations Being Sustained?

Despite the underground mining halt, Ivanhoe has managed to keep its Phase 1 and Phase 2 concentrators running by utilizing surface ore stockpiles. The Phase 3 concentrator at the adjacent Kamoa mine is also operating normally, and no damage has been reported at the company’s direct-to-blister smelter facility.

CEO Marna Cloete reassured stakeholders that the company retains operational flexibility. Options being explored include re-deploying Kakula personnel and equipment to the Kamoa mine, which remains unaffected by the seismic disturbance. Engineering teams are also accelerating the procurement and installation of high-capacity pumps to bring dewatering capabilities to over 3,000 litres per second—enough to stabilize mine water levels.

Cloete acknowledged the extraordinary circumstances but emphasized the company’s commitment to safety, engineering excellence, and transparent stakeholder communication. “We are working around the clock with the world’s foremost geotechnical experts to understand the cause of the issue and how we’ll resolve it,” she said.

What Does This Mean for 2025 Production Guidance?

Perhaps the most consequential move from a capital markets perspective was Ivanhoe’s decision to withdraw its full-year 2025 production and cost guidance for the Kamoa-Kakula project. Also suspended was the ramp-up schedule for its direct-to-blister copper smelter—a key part of its strategy to maximize value-added production within the DRC.

Before this disruption, the Kamoa-Kakula Copper Complex was on track to produce 440,000 to 490,000 tonnes of copper in concentrate for the year. That now appears increasingly unlikely unless underground access at Kakula is restored sooner than expected.

The impact of this suspension extends beyond Ivanhoe. Institutional analysts tracking copper supply chains see potential short-term ripple effects on global copper inventories, particularly as demand intensifies amid the energy transition and electrification efforts across North America, Europe, and China.

How Has the Market Reacted to Ivanhoe’s Operational Setback?

Monday’s steep share price decline reflects market anxiety over operational risks, especially given the strategic importance of the Kakula mine to Ivanhoe’s long-term valuation. Analysts at TD Securities, who had previously maintained a bullish stance on Ivanhoe, noted in private briefings that the extended nature of the shutdown and the lack of clarity around re-entry timelines are key concerns for institutional investors.

Initial flows on the TSX reflected a broad pullback by retail and institutional holders alike. Bloomberg terminal data showed a sharp rise in put options and short positioning in IVN.TO through midday Monday, although no public hedge fund commentary has emerged as of Tuesday morning. Passive outflows were also seen from several large Canadian mining ETFs where Ivanhoe is a top-10 holding.

What Are Analysts Saying About Ivanhoe Mines Now?

Despite the operational disruption, some analysts believe the company’s long-term fundamentals remain intact. The Kamoa-Kakula project is still one of the largest and highest-grade new copper mines globally. The geological complexity, while now a source of concern, also underpins the mine’s copper yield potential.

Equity strategists at BMO Capital Markets suggested that while short-term sentiment has clearly been damaged, the pullback could represent a buying opportunity for long-horizon investors if management demonstrates successful remediation and resumes production by Q3. However, the team warned that any further delays beyond August or additional geotechnical complications could invite a broader reassessment of Ivanhoe’s capital efficiency.

In contrast, traders in London and Hong Kong have expressed wariness, particularly over the company’s increased dependence on infrastructure restoration timelines and supply chain cooperation with its Chinese partners.

How Rare Are Seismic Risks in Copper Mining?

Seismic activity in deep underground mining is not unprecedented but remains a serious operational hazard—especially in high-grade sediment-hosted copper systems like those found in Central Africa. Mines in the DRC, Zambia, and Chile have all reported episodic seismic-related disruptions in the past two decades, but the frequency and operational consequences vary.

In Ivanhoe’s case, the company’s own historical disclosures have acknowledged the unique challenges of mining in geologically complex zones. That said, this is the first known instance of a multi-day, full underground shutdown triggered by seismicity at the Kamoa-Kakula complex.

Robert Friedland, the company’s Executive Co-Chairman, framed the situation philosophically, drawing a comparison to the early years of SpaceX. He said that Ivanhoe, like aerospace pioneers, will “gain wisdom and experience” from the setback. “What has transpired will give us valuable insight into managing geotechnical conditions and maintaining critical pumping infrastructure,” Friedland noted.

What’s Next for Ivanhoe Mines and Copper Markets?

While no timeline for the full resumption of underground mining at Kakula has been provided, the company has committed to frequent updates as the situation evolves. Remediation efforts in the shallower western sections of the mine are ongoing, and initial water pumping rates have been established at 1,000 litres per second.

Looking ahead, investors will be watching closely for indicators such as the rate of water level stabilization, success in equipment redeployment, and the company’s ability to preserve processing throughput using surface stockpiles.

Copper prices on the London Metal Exchange (LME) remained steady despite the news, indicating that broader copper supply-demand dynamics continue to dominate macro sentiment. Still, Ivanhoe’s disruption could act as a cautionary signal for peers operating in structurally unstable regions.