South32 hires RBC to purchase Botswana copper

Australian miner South32 has hired Canada-based global investment bank RBC Capital to manage the purchase of Botswana’s Khoemacau copper project, sources told the Financial Review. 

Khoemacau Copper is owned and operated by Cupric Canyon Capital, a subsidiary of Global Natural Resource Investments (GNRI), which began production in 2021.

The project, situated in the north of Botswana, has an annual production of 60,000 tonnes (t) of copper and 1.6 million ounces of silver per year. GNRI has been exploring the sale of the project since April 2022.

The purchase was valued upwards of $1.5bn (A$2.24bn) at the time, but has since changed due to recent uncertainty in global copper prices. Cupric generated $565m in funding for completion of the project in early 2019.

South32 made a profit in the 2022 fiscal year after incurring a loss in the previous year. Increased aluminium prices meant the company made a $2.67bn profit after tax. The company’s portfolio had shifted “toward metals critical for a low-carbon future”, CEO Graham Kerr stated at the time. Kerr also said the company expected its copper equivalent production to increase by 14%, with $1.2bn of capital expenditure planned.

South32 currently operates a trio of locations in nearby South Africa and Mozambique, although these are not copper focused but rather centred on aluminium and manganese.

In February 2022, the company acquired its first copper operation, purchasing a 45% stake in the Sierra Gorda copper mine in Chile. The project produced 25,300t in 2022.

“With the expected grade and reserve decline of existing copper mines from 2027, new mine supply will be important to close the demand supply gap,” South32 says on its website. This could indicate the reasoning behind the potential Botswana purchase. 

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