Six shortlisted for Khoemacau takeover
Pauline Dikuelo | Monday September 11, 2023 06:00
Highly placed sources told BusinessWeek that some of the shortlisted companies include the Australian-based Citic Pacific mining company, MMG, Exxaro, and Endeavour Mining. Bloomberg on Tuesday also identified Impala Platinum and Zijin Mining as being amongst the shortlisted bidders.
BusinessWeek has established that the selected suitors have been taking turns to visit the mine with the final batch expected next week.
“Khoemacau is an attractive mine, hence why some of the world’s biggest mining companies have expressed interest in buying it,” insiders familiar with the latest developments told BusinessWeek on condition of anonymity. “The owners have begun to engage with the potential buyers who have been visiting the mine. “After the assessment, the companies will then make their offers which will be reviewed before a final decision is made.”
Khoemacau mine is estimated to be worth about $1.5 billion. The mine was built at a cost of $412 million after the company raised $650 million in project financing.
The mine’s sale comes as copper giants around the world hunt for acquisitions to better position themselves, as demand for the mineral rises due to its central importance in the global energy transition.
Global demand for copper is expected to exceed supply in the medium to long term with leading research consultancy, Wood Mackenzie projecting significant deficits by the beginning of the next decade.
Khoemacau is majority-owned by Cupic Canyon LP, with funds advised by Global Natural Resources Investments (GNRI) and by Resources Capital Fund VII LP. GNRI was formed from a 2015 management buyout of Barclays Plc’s private equity unit and according to Bloomberg, the investment group has been considering options for Khoemacau for at least a year.
Currently, the mine is finalising plans for a $700 million expansion of its operations, in order to double its production to 130,000 tonnes by 2026. At that level, Botswana would be within the top 30 copper producers in the world.
Until recently when the adjacent Motheo Mine opened, Khoemacau was the country’s sole producer operating on the Kalahari Copperbelt.
Khoemacau put out its first concentrate in June 2021 and has now ramped up to a full processing capacity of 3.65 million tonnes per annum, which is expected to produce as much as 65,000 tonnes of copper in concentrate this year.