Tuesday, September 26, 2023

Who will snap up Khoemacau mine? 

The race of who will buy one of the country’s copper mine, Khoemacau is still on. While recent media reports made an indication that Australia’s Sandfire could be having second thoughts on buying the mine operations that neighbours its Motheo, information has surfaced that new suitors have emerged from elsewhere. 

This week, Reuters said that atleast three South African miners have shown interest to snap the Toteng village based mine, which is part of the Kalahari copperbelt, home to Africa’s largest copper deposits. 

Reuters reported that as growing demand for the metal ensures strong competition for the sought-after asset, some of the companies that are weighing the possibility of becoming new owners of Khoemacau include Johannesburg Stock Exchange quoted Impala Platinum, Exxaro Resources and Sibanye Stillwater. 

At the same time, information emerged this week that suggested that other suitors include China’sZijin Mining Group, MMG Ltd. and Aluminium Corp. 

The trio is said to have progressed to the second round of bidding for the mine which has changed ownership more than any other in Botswana. 

Khoemacau has been put up for sale by its owners Global Natural Resources Investments and Resources Capital Fund VIII LP. The asset is being pitched with a 20-year mine life and ready to produce 60,000 tonnes of copper and 1.6 million ounces of silver concentrate annually to 2026 – with a pathway to double production. 

Should Khoemacau succeed in doubling its production to 130,000 tonnes of copper a year, it would be the eighth-largest copper mine in the world among those built or expanded between 2017 and 2025. At current run rate, Khoemacau’s new owners should expect to make about $250 million in earnings before interest, taxes, depreciation and amortization (EBITDA) annually. If the company is to double annual production to 130,000 tonnes copper and 5 million ounces silver, it would kick its earnings to $730 million, according to valuers. 

Meanwhile Sunday Standard has been tipped that the current major shareholder of Khoemacau could pick a winner as soon as the next few weeks. The London-based private equity firm GNRI, was also approached by another Australian miner, South32. 


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