South32 to acquire Botswana copper
Australian miner South32 has hired Canada-based investment bank RBC Capital to oversee its acquisition of Botswana’s Khoemacau copper project.
The project is currently owned and operated by Cupric Canyon Capital, a subsidiary of Global Natural Resource Investments (GNRI), and it commenced production in 2021. Khoemacau Copper has an annual production capacity of 60,000 tonnes of copper and 1.6 million ounces of silver. GNRI has been exploring the sale of the project since April 2022.
Khoemacau Copper
Initially valued at over $1.5 billion (A$2.24 billion), the purchase price may have changed due to recent fluctuations in global copper prices. In early 2019, Cupric secured $565 million in funding to complete the project. South32 experienced a profit in the 2022 fiscal year, driven by increased aluminum prices, resulting in a $2.67 billion profit after tax. CEO Graham Kerr stated that the company was shifting its portfolio toward metals critical for a low-carbon future. South32 expects its copper equivalent production to increase by 14% and has allocated $1.2 billion in capital expenditure.
While South32’s current operations in South Africa and Mozambique are focused on aluminum and manganese rather than copper, the company made its first foray into copper in February 2022 by acquiring a 45% stake in the Sierra Gorda copper mine in Chile, which produced 25,300 tonnes in 2022.
South32’s states that with the anticipated decline in grade and reserves of existing copper mines from 2027, new mine supply will be crucial to meet the demand-supply gap. This strategic objective could explain South32’s interest in potentially acquiring the Khoemacau copper project in Botswana.
