High copper prices greet Khoemacau
Pauline Dikuelo | Monday August 16, 2021 06:00
Since the underground development of Khoemacau’s Zone 5 Mine commenced in early 2020, more than 350,000 tonnes of high-grade sulphide ore has been stockpiled on the surface and is available to feed the processor at Boseto.
Unlike Boseto Mine, which collapsed in 2015 on the back of low copper prices and high operating costs, Khoemacau is benefiting from higher prices driven by the electric vehicle market and other uses, while intensive mechanisation and access to grid power are restraining operating costs.
“There are no major discoveries of copper across the world and the big mines are beginning to struggle as they are getting old and failing to produce more copper as they used to,” Khoemacau Executive Director, Boikobo Paya told BusinessWeek. “The supply-demand gap looks very good because it looks like in five years, we will start to see a deficit in copper supply, and once you see a deficit the price goes up.”
For the year analysts said that they see copper prices averaging the year around $4.62 a pound rising to $4.75 a pound by 2022.
The situation is a sharp turnaround for the local base metal sector, which crumbled in 2016 with the closure of BCL and Tati mines. The last remaining copper producer, African Copper’s Mowana Mine, closed in December 2018 due to working capital problems.
This year, aside from Khoemacau, other developers are nearing production on the Kalahari Copperbelt, the rich copper and silver district running south-west to north-east in the country’s west. Sandfire Resources’ Motheo Mine is due to start production in 2023, with annual targets of 30,000 tonnes of copper and 1.2 million ounces of silver.
Paya told BusinessWeek the Kalahari Copperbelt was huge and had not been fully explored, adding that copper could be the next big thing for Botswana going into the future.
Analysts also expect global copper consumption to rise as governments seek to wean their power and transportation sectors off fossil fuels together with the rising demand for copper in electric-car infrastructure and other new uses of the metal.
Paya said most of Khoemacau’s copper is sold to offtakers who transport to various destinations where there is the capacity to smelt.
Khoemacau has the capacity to produce 155,000 to 165,000 tonnes of high-grade copper and silver concentrate a year, containing approximately 60,000 to 65,000 tonnes of payable copper and 1.8 to two million ounces of payable silver. The company expects to achieve this production rate in 2022.