Botswana’s mining landscape is abuzz with anticipation following MMG Limited’s entry into the local sector through its acquisition of Khoemacau Copper Mine’s parent company, Cuprous Capital which owned and operated the copper mine. This move has ignited a fervent interest in refining raw copper within Botswana’s borders, aligning with the government’s Mineral Policy objectives of maximizing resource benefits.
Home to a rich copper deposit, Khoemacau Copper Mine produces approximately 60,000 tons of copper and around 2 million ounces of silver per year.
Lefoko Moagi, the Minister of Minerals & Energy, has emphasised the importance of adding value to copper before export, highlighting its alignment with national development priorities.
Speaking at a ceremony marking the change of ownership of Khoemacau from Cuprous Capital to MMG Limited, Moagi pointed out the need to develop local upstream and downstream linkages to add value to mineral development in the country. He highlighted that with the recent commencement of copper concentrate production at the mine, it is crucial to establish these linkages for the benefit of the domestic economy through beneficiation and value-addition activities.
He noted that with MMG’s global expertise and resources, coupled with the country’s conducive investment climate, the Khoemacau acquisition is poised to unlock new opportunities and realise the full potential of natural resources in Botswana.
“MMG’s commitment to doubling production, generating employment, and increasing royalties and tax contributions reaffirms their alignment with Botswana’s development priorities of job creation and economic growth,” he stated.
He said MMG Limited has assured the government that the company will establish beneficiation activities in Botswana, mirroring its practices in other countries where it operates.
He hopes for the country to leverage MMG’s global position in developing various value-addition and beneficiation industries, such as the production of copper wires, copper tubing, and electric vehicle batteries.
“MMG is not just an equity investor but an aggressive investor with the technical expertise needed to develop Khoemacau to where it needs to be. Out of the 46 mines it is running, the company is looking to turn the mine into one of its top three assets and this will ensure the longevity of the mine,” he said.
Moagi noted that the government has decided to step back from the Khoemacau asset and act as a regulator, providing a conducive business environment for the investors.
“We want to leave it to the private sector to optimise the asset and the government will piggyback on that by benefitting from job creation, industrialisation, royalties and taxes,” he said.
Backed by China, MMG Limited is 67.88 percent owned by China Minmetals Corporation (CMC), one of China’s major multinational state-owned enterprises. The remaining 32.32 percent is owned by public shareholders, including global resources and investment funds.
Drawing from this Chinese partnership, the stability, size, and insights of China Minmetals Corporation provide a competitive advantage for MMG Limited, granting it unique insights into global commodity demand. Additionally, MMG can leverage networks and extensive distribution and marketing channels within China’s base metals market.
China Minmetals Corporation’s position as a significant miner and commodity trader also brings technical skills, a solid financial foundation, balance sheet flexibility, access to Chinese financial institutions, and a long-term investment view.
As part of the Hong Kong-based mining company’s strategic expansion, the Khoemacau acquisition represents a milestone in its pursuit of establishing a robust portfolio comprising top-tier mines catering to the needs of a decarbonised world.
“By delivering Khoemacau into the MMG portfolio we are taking a significant step in achieving our strategy and vision of creating a leading international mining company with a low-carbon future. Our belief that we mine for progress showcases our commitment to delivering enduring value for our shareholders, people and communities,” MMG Limited Chairman, Jiqing Xu said during the ceremony.
He added that the company is committed to developing Khoemacau to its full potential with plans to double its production capacity to over 130,000 tonnes per annum. This will be achieved through continued efforts in safe production and by investing in the training and development of current and future human resources.
According to Xu, Khoemacau’s acquisition is China’s largest investment in Botswana to date as it sees attractive growth opportunities in the sector spurred by confidence in copper as a commodity with a strong forward demand.
The world’s largest market for copper concentrate, China has over the years been unable to meet its growing annual demand for base metals which are critical to the production of batteries and other renewable energy components. This has seen an increase in its investment efforts in African countries like Zambia and the DRC, which are particularly rich in copper.
MMG’s overarching strategy includes curating a collection of high-caliber mines that supply minerals critical to a world transitioning towards sustainability. Khoemacau, a long-life copper mine along with other projects is expected to significantly augment MMG’s copper production as it looks to grow its assets and increase its exposure to minerals that the company says are critical to the global decarbonisation efforts.
The long-term prospects for copper attracted strong competition for the sought-after mine, which stands out as one of the premier new copper mines globally, renowned for its exceptional quality. Khoemacau entered the market coincidentally during the same period when MMG had been searching for copper assets for over a year, amidst a surge in demand for the metal driven by industrialisation and urbanisation.
MMG is looking to establish a $700 million expansion program that will result in the development of three additional underground mines and a larger processing facility in Botswana.
Similarly in the DRC, where it operates the Kinsevere Mine, MMG recently announced the currently ongoing project as it looks to grow the asset, which was acquired in 2012 and is an n important part of the company’s portfolio of high-quality base metals assets.
The Kinsevere Expansion Project is expected to mine and process the copper sulphide and cobalt resources located at the mine. It includes the installation of new facilities and associated processing methodology involving a flotation plant, roaster system and cobalt processing circuit.
The project will extend the life of the Kinsevere operation for at least 13 years from 2022 and, once fully ramped up, will result in total annual production of up to 80,000 tonnes of copper cathode and between 4,000 – 6,000 tonnes of cobalt in cobalt hydroxide.
In 2023, MMG produced 347,264 tonnes of copper (copper cathode plus copper in concentrate), 14 percent higher than in 2022. This was largely driven by its Las Bambas Copper Mine in Peru which produced 302,033 tonnes of copper. Kinsevere produced 44,068 tonnes of copper cathode in 2023.
