South African mining companies bid to control the largest copper mine in Africa

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Multiple sources confirmed that at least three mining companies based in South Africa are considering purchasing the Khoemacau copper mine in Botswana, which houses one of the largest copper deposits in Africa. The growing demand for copper has led to strong competition for this highly sought-after asset.

According to insiders who wished to remain anonymous due to the sensitive nature of the information, Johannesburg-listed Impala Platinum, Exxaro Resources, and Sibanye Stillwater are evaluating the possibility of making bids for the copper and silver mine in Botswana.

Additionally, there are three Chinese investors showing interest in Khoemacau Copper Mining operations.

The three Chinese groups involved in the bidding process are Zijin Mining Group Co., MMG Ltd., and Aluminium Corp. of China, commonly known as Chinalco. These companies have successfully advanced to the second round of bidding for the Khoemacau project.

The increasing demand for copper, driven by its use in applications ranging from solar panels to electric vehicles, has led mining companies to seek additional sources of this metal. Although copper prices have experienced declines due to concerns about a global economic slowdown, the long-term outlook for the metal and the competitive bidding process are expected to make it challenging for any of the potential buyers to secure a favourable deal, as suggested by two of the sources.

In May, Khoemacau’s owners—Cupric Canyon LP, a U.S. private equity firm with funds managed by Global Natural Resources Investments (GNRI), and Resource Capital Fund VII LP—announced that they had begun engaging with potential buyers. The sales process is anticipated to take several months and reach its conclusion toward the end of 2023, according to a spokesperson from Khoemacau.

Two sources revealed that two mining companies withdrew from the bidding competition after the initial round, primarily due to the mine’s high valuation. The estimated value of Khoemacau is believed to be between $1.5 billion and $2 billion.

Situated in the Kalahari Copper Belt, Khoemacau currently produces approximately 60,000 tonnes of copper and around two million ounces of silver annually. With additional investments, future production levels could potentially be increased to about 130,000 tonnes of copper and five million ounces of silver per year.

The owners of Khoemacau remain open to either forming a partnership or pursuing an outright sale of the mine.

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