First production emerges from newest copper mine

Mbongeni Mguni | Monday May 22, 2023 06:00

Motheo joins Khoemacau as the only operating mines on the Kalahari Copperbelt, the 1,000-kilometre swathe running southwest to northeast, which is known to contain millions of tonnes of copper and silver resources, but whose heavy sands and poor infrastructure have restrained development over the decades.

Sandfire’s executive country head for Botswana, Dale Burgess told BusinessWeek the new mine was ramping up to an expected target of 20,000 tonnes this year.

“We are producing concentrate although this is small, commissioning amounts and nothing really material,” he said on Monday. “This calendar year, we expect to be around 20,000 tonnes of copper and that’s still subject to budget approval. “That’s up to December 31, 2023, and the following year, we should double that to about 40,000 tonnes of saleable copper.”

He added: “We are undertaking an expansion at the moment that increases that production to 50,000 tonnes of copper from 2025 onwards.”

The expansion will tap into ore sources adjacent to the area presently being commissioned, with the 50,000-tonne production making the operation slightly smaller than the neighbouring Khoemacau.

Burgess told BusinessWeek that Motheo’s concentrate will be shipped through Walvis Bay in Namibia for the international spot market, where copper prices are currently enjoying a boom due both to the global economy’s recovery from the pandemic and greater demand for the commodity as a key enabler of the energy transition.

“For the first 12 months, it’s a spot price or spot production operation and it’s very favourable pricing,” he said. “We have a long list of buyers waiting to get our product and it’s an advantage to get on the spot market for the price until we get the contracts. “We will be trucking the concentrate and shipping from Walvis Bay. “Walvis Bay authorities have expanded their capacity for us and we have negotiated a berth space, so that we truck and store in our own area, before shipping internationally. “Plan B is Richard’s Bay in Durban and we can also route through Mozambique.”

Burgess said Sandfire had thus far invested $360 million (P4.9 billion) into developing Motheo with another $60 million (P800 million) due to be invested in the ramp-up to 2025. The firm’s board is also due to consider a solar renewable installation as part of environment and sustainability commitments, which is expected to cost another $30 million (P404 million).

The addition of Motheo, however, is expected to contribute revenues of up to $350 million next year and up to $400 million from 2025.

During construction, the project employed 1,900 workers, a number that has declined to between 1,300 and 1,400 as activities are completed and transition towards standard operations. During normal operations, Motheo is expected to employ 650 full-time employees and 99% of these have already been recruited. Burgess noted that of the 650 workers, only 13 will be expatriates and Batswana will be continually trained to take over these positions.

“We are hoping to change Gantsi town and district and hopefully Botswana. “We are looking at P700 million per annum in taxes and royalties to government and over the current life of mine, we will buy $120 million of power from the Botswana Power Corporation, which is a picture of the downstream benefits to the country,” he said.