TFM Phase 2 — CMOC's $2.5 Billion Expansion

Overview

Tenke Fungurume Mining (TFM) is one of the largest copper-cobalt mining operations in the world, situated in the heart of the Central African Copperbelt in the Lualaba Province of the Democratic Republic of Congo. The mine spans a concession area of approximately 1,437 square kilometres surrounding the town of Fungurume, roughly 110 kilometres northwest of Lubumbashi and 180 kilometres southeast of Kolwezi. Under the ownership of CMOC Group Limited, TFM has become the single most significant cobalt-producing asset on earth and a top-tier copper operation whose output is critical to global battery supply chains and the energy transition.

The Phase 2 expansion represents a transformative $2.5 billion capital programme designed to approximately double the mine's processing capacity. When fully operational, Phase 2 is expected to lift annual copper output to over 450,000 tonnes and cobalt production to more than 37,000 tonnes, positioning TFM as one of the world's five largest copper mines and cementing its status as the dominant global source of mined cobalt. The expansion involves a new oxide processing circuit, additional solvent extraction and electrowinning (SX-EW) capacity, expanded acid plant infrastructure, and substantial upgrades to mine haulage, water management, and power supply systems.

TFM's significance extends beyond its production volumes. As the world's largest cobalt mine, its output directly shapes the pricing, availability, and geopolitical dynamics of a mineral classified as critical by the United States, the European Union, and virtually every industrialised nation. Cobalt is an essential cathode material in lithium-ion batteries powering electric vehicles, grid storage, and consumer electronics. The concentration of cobalt supply in the DRC — and within TFM specifically — creates a strategic dependency that drives both Western diversification efforts and Chinese supply-chain integration strategies.

Geology & Deposit

The Tenke Fungurume deposit sits within the Katangan Supergroup, a Neoproterozoic sedimentary sequence that hosts the Central African Copperbelt stretching across southern DRC and northern Zambia. The copper-cobalt mineralisation occurs in stratiform deposits within the Roan Group sediments, specifically within dolomitic and siliciclastic host rocks that were deformed and thrust-faulted during the Lufilian Orogeny approximately 550 million years ago.

The concession encompasses multiple discrete ore bodies arranged along a series of northwest-trending structural corridors. The principal deposits include Kwatebala, Fwaulu, Mambilima, Tenke, Fungurume, Pumpi, and Kazinyanga, among others. Mineralisation is predominantly oxide-zone copper and cobalt, with copper occurring as malachite, chrysocolla, and heterogenite, and cobalt principally as heterogenite (CoOOH). The oxide zone extends from surface to depths of 80 to 150 metres in most areas, making the deposits amenable to open-pit mining and acid-leach processing rather than conventional flotation and smelting.

Average copper grades across the operation range from 2.5% to 4.5% copper and 0.2% to 0.5% cobalt, though individual ore bodies vary considerably. The Kwatebala pit, which has been the primary production source, has delivered consistent grades of approximately 3.2% copper and 0.35% cobalt. Total mineral resources across the concession are estimated at over 1.2 billion tonnes, providing a multi-decade mine life that underpins the economic rationale for the Phase 2 expansion investment.

Sulphide Potential

Below the oxide zone, primary sulphide mineralisation has been identified at multiple deposits within the concession. The sulphide resources contain significant copper and cobalt grades, though their metallurgical characteristics require different processing approaches — typically flotation and smelting rather than leaching. CMOC has begun pre-feasibility studies on sulphide exploitation, which could extend the mine life by an additional two to three decades and provide a pathway for production beyond the oxide-phase operations. The sulphide resource represents a potential future Phase 3 expansion opportunity, though no capital commitment has been announced.

Operations & Processing

Mining Method

TFM operates as a large-scale conventional open-pit mining operation. Multiple open pits are mined concurrently across the concession, with ore hauled by truck fleet to centralised processing facilities. The mine employs a fleet of over 100 haul trucks, including ultra-class 220-tonne capacity vehicles, alongside hydraulic excavators, wheel loaders, and a comprehensive drill-and-blast programme. Waste-to-ore stripping ratios average approximately 4:1 across the operation, though early-stage pits can achieve lower ratios due to the near-surface positioning of oxide mineralisation.

Mine planning incorporates detailed grade-control drilling ahead of the mining face, allowing ore to be selectively blended to maintain consistent copper and cobalt head grades to the processing plant. This grade control is particularly important given the variable nature of oxide mineralisation across the different ore bodies.

Processing Circuit — Pre-Expansion

The existing (Phase 1) processing infrastructure employs a hydrometallurgical flowsheet specifically designed for oxide copper-cobalt ores. Run-of-mine ore is crushed and agglomerated before being stacked on a dedicated heap-leach pad. Sulphuric acid is applied through drip irrigation systems, dissolving copper and cobalt from the ore over leach cycles of 90 to 120 days. The pregnant leach solution (PLS) is collected in lined ponds and pumped to the solvent extraction (SX) plant.

The SX circuit selectively extracts copper from the PLS using organic extractants, producing a purified copper-rich electrolyte that feeds the electrowinning (EW) tankhouse. The EW plant produces LME-grade copper cathodes (99.99% purity) that are bundled, weighed, and prepared for export. Cobalt is recovered from the SX raffinate through a separate circuit involving precipitation, purification, and drying to produce cobalt hydroxide, the standard intermediate product for battery-grade cobalt processing.

The existing circuit has a nameplate capacity of approximately 26 million tonnes per annum of ore throughput, supporting annual production of roughly 200,000 to 250,000 tonnes of copper cathode and 15,000 to 20,000 tonnes of cobalt in hydroxide equivalent.

Phase 2 Expansion Scope

The $2.5 billion Phase 2 expansion adds a parallel processing train that effectively doubles the operation's throughput capacity. Key elements of the expansion include:

Commissioning of the Phase 2 facilities is being executed in stages, with early components of the expanded acid plant and SX-EW capacity brought online in late 2024 and early 2025. Full ramp-up to steady-state production rates of 450,000+ tonnes copper and 37,000+ tonnes cobalt is targeted for late 2026 to mid-2027, subject to power availability and grade performance across the expanded pit portfolio.

Production Performance

The production trajectory demonstrates the step-change that Phase 2 delivers. From a pre-expansion baseline of approximately 200,000 tonnes of copper and 16,000 tonnes of cobalt in 2016, CMOC has progressively lifted output through operational optimisation and early-stage expansion works. The full Phase 2 target represents a roughly 125% increase in copper production and a 130% increase in cobalt production relative to the 2016 acquisition baseline.

Ownership & Corporate Structure

CMOC Group Limited, listed on the Hong Kong and Shanghai stock exchanges, holds an 80% interest in Tenke Fungurume Mining SA (TFM SA), the DRC-registered operating entity. The remaining 20% is held by La Générale des Carrières et des Mines (Gécamines), the Congolese state mining company, as a carried interest under the terms of the original concession agreement and the 2018 revised DRC Mining Code.

CMOC acquired its TFM stake in 2016 from Freeport-McMoRan Inc. for $2.65 billion, in what was at the time one of the largest mining transactions in African history. Freeport-McMoRan had developed TFM from 2006 under its subsidiary Freeport-McMoRan Congo, investing over $2 billion in the original mine construction and Phase 1 processing facilities. The Freeport era established the hydrometallurgical processing approach and initial mine infrastructure that CMOC subsequently expanded.

The CMOC acquisition aligned with China's broader strategy to secure upstream access to critical minerals, particularly cobalt. CMOC's parent shareholders include Chinese state-connected entities, and the company's DRC operations are integrated into Chinese downstream battery and EV supply chains. TFM's cobalt output flows predominantly to Chinese processing facilities where it is refined into battery-grade cobalt sulphate and other chemical products for cathode manufacturing.

Gécamines Disputes

The relationship between CMOC and Gécamines has been marked by significant commercial and legal disputes. In 2018, Gécamines alleged that CMOC had understated TFM's mineral reserves in the original Freeport acquisition, thereby undervaluing the state's royalty entitlements. The dispute escalated to include allegations of unpaid royalties, withheld export permits for cobalt hydroxide stockpiles, and demands for renegotiation of the joint-venture terms.

Between 2019 and 2021, the DRC government blocked the export of approximately 24,000 tonnes of cobalt hydroxide stockpiled at the mine site, representing hundreds of millions of dollars in stranded inventory. The dispute was ultimately resolved through a settlement that included additional payments to Gécamines and revised fiscal terms, though the precise settlement amounts remain commercially confidential.

The Gécamines dispute illustrated the sovereign risk inherent in DRC mining operations and the leverage that the state mining company exercises over foreign operators. Observers noted that the timing of the dispute coincided with the 2018 revision of the DRC Mining Code, which increased royalty rates and eliminated stability clauses that had protected earlier mining conventions from fiscal changes.

DRC Mining Code & Fiscal Framework

TFM operates under the 2018 revised DRC Mining Code, which introduced significantly higher fiscal burdens on mining companies compared to the 2002 code under which the original concession was granted. Key provisions affecting TFM include:

The 10% royalty on cobalt — classified as a strategic mineral — is among the highest mineral royalty rates globally and directly impacts the economics of TFM's Phase 2 expansion. CMOC has publicly stated that the Phase 2 investment decision was made despite the elevated fiscal burden, reflecting the exceptional quality and scale of the TFM deposit.

Corridor Connection & Logistics

TFM's location in the southeastern Lualaba Province positions it within the gravitational pull of multiple export corridors. Currently, the mine's copper cathode and cobalt hydroxide are exported primarily via road transport south to the Zambian border at Kasumbalesa, then by road or rail through Zambia to the ports of Dar es Salaam (Tanzania) or Durban (South Africa). This southern route covers approximately 2,800 to 3,400 kilometres depending on the destination port, with transit times of 30 to 60 days.

The rehabilitation and expansion of the Lobito Corridor offers TFM a potentially transformative alternative. The westward rail route from the Lualaba copperbelt through Kolwezi, across the DRC-Angola border at Dilolo, and onward to the Atlantic port of Lobito covers approximately 1,800 kilometres — roughly half the distance of the southern corridors. Once the Lobito rail link achieves operational reliability, TFM stands to benefit from substantially reduced transport costs, shorter transit times, and diversified export routing.

For Phase 2 volumes specifically, the corridor question is strategically significant. Adding 150,000+ tonnes of annual copper production and 10,000+ tonnes of additional cobalt requires corresponding logistics capacity. The existing southern road corridors are already congested, and additional truck movements through Zambia raise both cost and community-impact concerns. The Lobito Corridor's rail capacity could absorb a significant portion of TFM's incremental production, provided the infrastructure achieves the reliability and throughput targets set by the corridor consortium.

Distance & Transit Comparison

The logistics cost differential is substantial. Current transport costs for copper cathode via southern corridors are estimated at $200 to $350 per tonne. The Lobito Corridor targets a delivered cost below $150 per tonne once at full operational capacity. For an operation producing 450,000+ tonnes of copper annually, this differential represents potential savings of $25 million to $90 million per year — a material factor in the Phase 2 investment return.

Power & Energy Infrastructure

Reliable power supply is one of the most critical operational constraints for TFM and a key determinant of Phase 2 ramp-up timing. The mine draws power from the SNEL (Société Nationale d'Electricité) grid, sourced primarily from hydroelectric facilities on the Congo River system. However, the DRC's national grid is chronically under-invested, with frequent load-shedding, voltage fluctuations, and transmission losses that disrupt industrial operations.

To mitigate grid unreliability, CMOC has invested in dedicated 220 kV transmission line infrastructure connecting TFM to the regional substation at Fungurume. The Phase 2 expansion includes additional on-site backup diesel generation capacity and power factor correction equipment. CMOC has also participated in discussions regarding the development of new hydroelectric capacity on tributaries of the Congo system, though no firm commitments to specific projects have been publicly disclosed.

Sulphuric acid supply is another energy-adjacent constraint. The acid plants at TFM consume elemental sulphur imported primarily from petroleum refineries, with sulphur logistics adding cost and supply-chain complexity. The Phase 2 acid plant expansion requires a corresponding increase in sulphur imports, which must be transported overland from the coast — another factor favouring the Lobito Corridor's shorter inbound logistics route.

Cobalt — Strategic Significance

TFM's cobalt production deserves dedicated analysis given its outsized importance to global supply chains. The mine is the world's single largest source of mined cobalt, and with Phase 2, its annual output of 37,000+ tonnes will represent approximately 15–18% of global mined cobalt supply. No other single operation approaches this concentration of output for a mineral classified as critical by every major industrialised economy.

Cobalt's primary demand driver is lithium-ion batteries, specifically the nickel-cobalt-manganese (NCM) and nickel-cobalt-aluminium (NCA) cathode chemistries used in electric vehicles and grid storage. While lithium-iron-phosphate (LFP) batteries — which contain no cobalt — have gained market share, NCM chemistries retain advantages in energy density that keep cobalt demand structurally relevant, particularly for premium EV applications and aerospace.

The concentration of cobalt supply in Chinese-controlled operations, with CMOC's TFM and the adjacent Kisanfu project representing a substantial share, has prompted Western governments to pursue supply diversification. The US Inflation Reduction Act's Foreign Entity of Concern (FEOC) provisions, which restrict EV tax credits for vehicles containing battery minerals processed by entities controlled by China, Russia, or other designated countries, directly impact TFM's cobalt. EV manufacturers sourcing cobalt traceable to CMOC face eligibility restrictions for the full $7,500 consumer tax credit beginning in 2025.

This regulatory environment creates a paradox: TFM produces cobalt that the world urgently needs for decarbonisation, but its Chinese ownership triggers trade restrictions that constrain its market access in Western economies. The dynamic is driving investment in alternative cobalt sources, recycling technologies, and cobalt-free battery chemistries, even as TFM's Phase 2 expansion increases the global supply that keeps cobalt prices manageable.

Community Impact

TFM operates within a densely populated region where mining, subsistence agriculture, and artisanal mining have coexisted for generations. The mine's concession area encompasses or borders multiple communities whose livelihoods are directly affected by large-scale mining operations. CMOC reports employing approximately 18,000 people at TFM as direct employees and contractors, making it one of the largest employers in the Lualaba Province.

Community relations at TFM have been complex and occasionally contentious. The original Freeport-McMoRan development required the resettlement of communities within the mining concession, with compensation and resettlement programmes that drew criticism from civil society organisations. Under CMOC ownership, community engagement programmes have continued, including investments in local schools, health facilities, road construction, and agricultural development initiatives.

However, several persistent concerns merit independent monitoring. Artisanal and small-scale mining (ASM) activity within and adjacent to the concession remains a source of tension. Thousands of artisanal miners operate in the broader Fungurume area, extracting copper and cobalt from surface deposits using manual methods. Relations between the industrial operation and artisanal miners involve periodic confrontations, security incidents, and displacement pressures that require careful management.

The Phase 2 expansion amplifies these dynamics. Additional pit development, expanded waste dumps, and new processing infrastructure require further land acquisition within the concession. The influx of construction workers during the expansion build-out adds demographic pressure on local communities. Water usage by the expanded operation raises concerns about downstream availability for agricultural communities. CMOC has committed to community development spending as part of the Phase 2 programme, but the adequacy and effectiveness of these investments requires independent verification.

Environmental Profile

Open-pit mining at TFM's scale creates a substantial surface footprint. Multiple pits, waste rock dumps, heap-leach pads, tailings storage facilities, and processing infrastructure occupy a significant portion of the concession area. Rehabilitation of mined-out pits and waste facilities is a long-term obligation that extends well beyond the operational mine life.

Water management is a central environmental challenge. The heap-leach process requires large volumes of sulphuric acid solution, and preventing leakage of acidic process water into groundwater and surface water systems is critical. TFM employs lined heap-leach pads and solution collection systems, but the scale of the operation — which will approximately double under Phase 2 — increases the magnitude of potential environmental incidents.

Sulphur dioxide emissions from the acid plant require scrubbing and monitoring. Dust generated by mining, hauling, and crushing operations affects air quality in surrounding communities. Biodiversity impacts include habitat loss within the concession and fragmentation of wildlife corridors in the broader Katangan miombo woodland ecosystem. TFM has implemented biodiversity offset programmes, though the effectiveness of these measures in compensating for cumulative habitat loss is debated by conservation researchers.

The Phase 2 expansion triggers additional environmental impact assessment requirements under DRC law and the Equator Principles framework. CMOC has stated that Phase 2 design incorporates improved environmental controls relative to the original Phase 1 infrastructure, including enhanced liner systems for the new heap-leach pad, increased water recycling rates, and more efficient acid plant emissions controls.

ESG Assessment

Timeline

Independent ESG Assessment

Our independent ESG assessment evaluates this operation's environmental management, social impact, governance quality, and disclosure transparency. Environmental assessment covers water management, waste handling, air emissions, biodiversity impacts, and mine closure planning. Social assessment examines community relations, employment practices, local procurement, benefit-sharing, and human rights performance. Governance assessment evaluates corporate transparency, anti-corruption measures, and stakeholder engagement quality.

Assessment findings are incorporated into our quarterly Corridor ESG Scorecards, providing stakeholders with comparable, independent ratings across all major corridor mining operations. Operations meeting our assessment thresholds are eligible for verified ESG ratings issued from our evidence archive — verifiable reputation signals that differentiate responsible operators from those whose ESG claims are unsubstantiated. Rating publication requires demonstrated performance, not just policy commitments.

Community Impact Monitoring

Community impact monitoring around this operation tracks the full spectrum of mining effects on surrounding populations. Employment and procurement spending quantify direct economic benefits to local communities. Environmental monitoring tracks water quality, air quality, and ecosystem health in areas affected by operations. Community consultation processes are evaluated for meaningful participation versus performative compliance. Grievance mechanisms are assessed for accessibility, responsiveness, and outcome fairness.

Our monitoring provides the independent verification that enables stakeholders — investors, regulators, civil society, and affected communities themselves — to assess whether this operation delivers the community benefits that its social licence to operate requires. Documentation is preserved on our source evidence archive, creating permanent records that support long-term accountability and prevent the revisionism that undermines community claims when corporate memory proves conveniently selective.

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