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The surge in copper demand in the international market is expected to spur the development of new copper projects and mines in Botswana, ensuring the availability of critical minerals to facilitate the low-carbon energy transition. With prices remaining elevated, copper miners are poised to continue generating robust revenues.
Botswana expects foreign investors to remain interested in restarting production at other copper mines in the country. While Botswana has long been associated with its diamond mining industry, attention is increasingly turning to copper mining due to the significant potential for exploration and production in the country. Copper’s importance has been on the rise as Botswana seeks to diversify its mineral production, aiming to reduce overreliance on the diamond sector.
The recent acquisition of Khoemacau Copper Mine’s parent company Cuprous Capital. Khoemacau, which produces about 60,000 tons of copper annually, is expected to augment MMG’s copper production as it looks to grow its assets and increase its exposure to minerals that it says are critical to the global decarbonisation efforts. The global move towards green energy and the auto industries is driving the high demand for copper. Unrelated to the green energy transition, continued growth in the global construction industry is also expected to drive copper demand.
MMG’s acquisition of Khoemacau has ignited the government’s interest in exploring copper beneficiation domestically as it banks on the mining company’s global expertise to maximise economic impact and job creation. This is expected to encourage the development of downstream industries related to copper mining, such as processing and beneficiation as Botswana has similarly done in diamond mining.
Botswana can adopt key lessons from the vast experiences it has in diamond mining to execute in copper to drive beneficiation for copper locally to create much-needed jobs, stated Naledi Madala, an economist at Absa Bank Botswana.
Botswana’s beneficiation and localisation of its diamonds include the in-country downstream processing of rough diamonds, which were previously exported as rough diamonds and processed elsewhere. This has helped grow the local diamond-cutting and polishing field by creating additional industrial jobs in the country. Consequently, it is now the largest manufacturing sub-sector in the country, growing at an exceptional rate, with factories continually adopting and employing new technologies.
Gomolemo Basele, Economist at First National Bank Botswana notes that this outlook on copper remains positive as also evidenced by the rising interest in mergers between, or acquisition of copper mining conglomerates. The recent trend in global commodity prices has had an invariable impact on Botswana’s economy and future potential for growth. Elevated copper prices as seen recently support the continued performance of local copper mining operations, he said.
In a significant development signaling investor confidence in the copper market, global mining giant BHP recently proposed a USD 39 billion bid for its rival Anglo-American, with the latter’s copper mines in its sights. One of Anglo’s main products is copper, which is in high demand, particularly as tonnes of it will be needed for the electrification of transport and power in the green-energy transition. BHP’s move underscores the belief that demand for copper will continue to rise as the world electrifies and decarbonises its energy systems with Basele indicating that the increased interest in amassing significant holdings of copper mining entities points to the perceived future upside of activity in the sector.
The rise in copper demand has seen an increase in its investment efforts in African countries like Zambia and the Democratic Republic of Congo (DRC), which are particularly rich in copper. Khoemacau acquisition by China-backed MMG reflects the East-Asian country’s confidence in the attractive growth opportunities within the copper mining industry.
Basele pointed out that the global drive towards net zero, with copper being a key input in alternative energy development, suggests that copper prices are likely to remain above historical levels. Cloud computing, AI, and other developments in the ICT space will also require significant copper to support this infrastructure, he added.
Factors that could support copper prices well into the future include climate change, which has caused disruptions in copper mining activities in regions like South America and Australia stemming from severe weather conditions. Additionally, some copper mining jurisdictions also present operational challenges due to regulatory uncertainty, political instability as well as stricter environmental, Social and Governance (ESG) considerations.
Read Also:
https://trendsnafrica.com/botswanas-new-copper-mine-to-be-operational-by-2021/
https://trendsnafrica.com/zambia-signs-deal-with-irh-to-revamp-mopani-copper-mines/
Statistics Botswana shows that Copper at 22.7 percent was the second most exported commodity after diamonds contributing P656.1 million to the country’s total exports. The export destination for most of Botswana’s copper was Asia at 21.5 percent (P288.9 million). Copper was also the main commodity group exported to Australia at 99.8 percent (P333.7 million) of total exports to that country. China, which is among the top three Asian countries for Botswana’s copper exports, is one of the largest markets for copper concentrate as it struggles to meet its growing demand for base metal, which is critical in renewable energy.
