According to multiple sources, at least three South African mining companies are currently competing to acquire the Khoemacau Copper Mine in Botswana, one of Africa’s largest copper mines. The growing demand for copper ensures intense competition for this highly sought-after asset.
Insiders have revealed that Johannesburg-listed companies Impala Platinum, Exxaro Resources, and Sibanye Stillwater are considering bids for the copper-silver mine in Botswana. Due to the sensitivity of the information, these sources have chosen to remain anonymous.
One source mentioned that some unnamed Chinese investors are also on the list of companies interested in Khoemacau Copper Mining’s business.
Impala Platinum declined to comment. Exxaro did not immediately respond to emailed questions. Sibanye confirmed its interest.
Sibanye spokesperson James Wellsted told Reuters, “We have been looking for opportunities, and Khoemacau has come into our sight, and we have signed a confidentiality agreement to better understand this opportunity. But Khoemacau is more competitive, and we won’t get into a bidding war that ultimately doesn’t create value.”
In the coming years, the demand for copper is expected to increase in various applications, including solar panels and electric vehicles, driving mining companies to seek more copper supply.
Two of the sources mentioned that copper prices have fallen due to concerns about a global economic slowdown, but the long-term outlook for copper and the competitive bidding process will make it challenging for any bidder to strike a deal.
Khoemacau is owned by the U.S. private equity firm Copper Canyon LP, with its funds managed by Global Natural Resources Investments (GNRI) and Resource Capital Fund VII LP. In May, the company stated that they had initiated discussions with potential buyers.
A spokesperson for Khoemacau indicated that the process is expected to take several months and is likely to conclude close to the end of 2023.
Two sources also mentioned that diversified mining company South32 and Australian competitor Sandfire Resources withdrew after the first round of bidding due to the mine’s perceived high valuation.
Three banking industry sources added that the valuation of Khoemacau could be in the range of $1.5 billion to $2 billion.
Graham Kerr, CEO of South32, appeared hesitant about the cost in the company’s August earnings report, stating, “This could be a very competitive process and maybe a bit too rich for us.”
South32 declined to comment further.
Citigroup analysts stated in a report that while the assets could be valued at up to $1.8 billion, the $1.2 billion investment is worthwhile for South32.
A spokesperson for Sandfire declined to comment on the process.
Khoemacau is located in the Kalahari Copper Belt, a vast stretch of land extending from northeastern Botswana to parts of western Namibia.
It currently produces approximately 60,000 tons of copper and about 2 million ounces of silver annually, with future production potentially increasing to around 130,000 tons of copper and 5 million ounces of silver per year.
One source mentioned that Khoemacau’s owners are open to collaboration or a direct sale.
Post time: Sep-07-2023