Under the terms of the deal, as published on the Australian Securities Exchange last week, BHP has committed to financing Cobre Limited for exploration expenditure at the Kitlanya Projects, located in both the north and south of the Copperbelt.
Running southwest to northeast, the 1,000-kilometre Kalahari Copperbelt is known to contain healthy amounts of copper, silver, lead, and the critical minerals sought after globally for their importance in the green energy transition. Several companies are rapidly advancing projects on the copperbelt, which in 2024 hosted the country’s largest ever private sector acquisition when a Chinese group snapped up Khoemacau Copper Mine in a $1.2 billion deal.
In a statement, Cobre directors said besides the $25 million for exploration, BHP would be liable to make an additional payment of up to $10 million upon the declaration of a maiden code-compliant mineral resource at the Kitlanya Projects.
In addition, under the deal, Cobre Botswana would be appointed operator during the period in which BHP earns up to its 75% stake, being entitled to a management fee of no less than $250,000 per annum.
Once BHP has earned its 75% stake, the deal provides that the mining giant may provide a loan to Cobre to fund Cobre's portion of joint venture expenditure up until the final investment decision.
The terms of the deal are highly favourable to Cobre, with the company’s directors expressing their delight with the transaction.
“This significant transaction with BHP, one of the world’s leading mining companies, is a major moment in time for Cobre as a company,” said Adam Wooldridge, Cobre’s CEO. “The partnership with BHP will provide us with the funding and support necessary to implement a technology-driven work programme designed to discover the Tier 1 deposits we believe may be hosted in our Kitlanya East and West Projects.”
BHP Group Exploration Officer, Tim O’Connor, said the deal and the collaboration with Cobre “reflects our excitement for the exploration potential in Botswana”.
“The Kitlanya Projects in Botswana represent an exciting opportunity to uncover Tier 1 copper-silver deposits, and we are pleased to contribute our expertise and resources to this venture,” O’Connor said.
As global mining companies race for copper assets, BHP has been amongst those hunting for major deals. Last year, BHP made an ultimately unsuccessful but still mammoth $49 billion takeover bid for Anglo American, as a way of securing the latter’s copper assets. Anglo American is the 85% equity holder in De Beers, with the Government of Botswana holding the balance.
The Kalahari Copperbelt has been known to be rich in minerals since the early 1960s, but the heavy sand overburden, remoteness, lack of electricity, and water as well as other infrastructure, have limited development and hampered those that have been set up.
In more recent years, technological advancements, as well as the extension of electricity and other primary infrastructure into the region, have helped advance and sustain more operations on the copperbelt. At present, operating mines include Khoemacau and Sandfire Resource’s Motheo Copper Mine.
