Australia’s largest miner, BHP, has initiated a $40 million ‘earn-in’ agreement to control two copper projects in Botswana. This deal enables BHP to fund exploration at Kitlanya East and Kitlanya West with an option for a 75% stake. Cobre’s CEO expressed confidence in the potential tier-1 deposits, while BHP aims to enhance its copper portfolio amid rising demand and supply challenges.
BHP, Australia’s largest mining company, is expanding its footprint in Africa by entering a $40 million ‘earn-in’ agreement to take control of two copper projects in Botswana. This initiative allows BHP to fund the exploration programs at Kitlanya East and Kitlanya West, situated in the Kalahari Copper Belt. The agreement provides BHP the option to acquire a 75 percent stake, leaving ASX-listed Cobre with a 25 percent interest.
Adam Wooldridge, CEO of Cobre, described the partnership as a transformative moment, expressing confidence that Kitlanya might contain tier-1 deposits. Importantly, he noted that Cobre will continue to develop its Ngami and Okavango copper projects independently from BHP. The Kalahari Copper Belt spans approximately 1,000 kilometers across Botswana and into Namibia.
BHP exploration officer Tim O’Connor stated that the collaboration signifies BHP’s enthusiasm for the mining potential in Botswana, highlighting the exciting opportunity to unearth tier-1 copper-silver deposits. Cobre has already undertaken a seismic survey at Kitlanya West, with further exploration activities set to commence in April. Following the declaration of a JORC report, BHP will pay Cobre an additional $15 million based on the contained copper tonnage.
With a focus on enhancing its commodity portfolio, BHP aims to elevate copper as a counterbalance to any potential decline in iron ore. The company has expressed keen interest in copper assets, evidenced by its $75 billion acquisition attempt for Anglo American last year. In South Australia, BHP is developing a copper province through its Olympic Dam and additional mines acquired from Oz Minerals.
As copper’s significance rises, particularly within emerging technologies, BHP’s CEO Mike Henry has warned of substantial investment requirements—approximately $386 billion in growth capital—to meet global renewable energy goals. However, he noted that current committed growth projects are severely lacking in funding, necessitating identification and authorization of new initiatives.
In conclusion, BHP’s strategic investment in Botswana signifies a pivotal expansion into African copper mining. By funding Cobre’s projects, BHP is aligning with the growing demand for copper in green technology while concurrently diversifying its commodity portfolio. This partnership not only emphasizes the potential of Botswana’s mining sector but also indicates a broader trend of capitalizing on the essential role of copper in future technologies. Furthermore, the investment reflects BHP’s proactive approach to address expected supply challenges in the copper market.
Original Source: www.news.com.au
