A unit of state-owned China Minmetals Corp. bought a copper mine in Botswana for about $1.9 billion, ending a bidding race that drew interest from at least two other Chinese suitors.
MMG Ltd. said it had agreed to purchase Cuprous Capital Ltd., the sole owner of the Khoemacau mine in the Kalahari copper belt, which stretches from northwest Botswana to western Namibia.
With a mine life in excess of 20 years, Khoemacau will become “a cornerstone asset” for MMG’s business, the Hong Kong-listed company said in an exchange filing on Tuesday. The mine “is immediately earnings accretive,” it said.
Copper prices have fallen this year, but longer-term demand is expected to be increasingly driven by its use in renewable energy and electric vehicles. That’s already showing up in buying patterns, with China purchasing more copper this year even as traditional industrial consumption in the country weakens, according to commodities trader Trafigura Group.
Khoemacau, which has been ramping up annual output to 60,000 tons after starting operations in mid-2021, adds to the significant copper assets already held by MMG, which is facing strikes at another mine it owns in Peru. Production can be expanded to around 130,000 tons a year, according to Khoemacau’s website.
The bidding process for the mine drew competition from other Chinese companies including Zijin Mining Group Co., and Aluminium Corp. of China, known as Chinalco.
