'Why we didn't bid for Khoemacau'
Lewanika Timothy | Monday April 29, 2024 06:00
Chinese state-powered firm, MMG, has finalised the purchase of Khoemacau for about P25 billion, the largest private-sector transaction to ever happen on local soils.
Speaking last week in Maun at a ceremony to mark MMG’s takeover, Moagi said government was aware of the capital value to be tapped from the Khoemacau mine as a strategic asset, as the world hunts for copper as a critical mineral.
However, he revealed that government decided to step aside in favour of the private sector which has more knowledge of mining and its value chains.
“This resource requires you to be a technical partner with technical knowledge,” Moagi told journalists. “Having the money to purchase the asset wasn’t enough reason for government to purchase. “We trust that MMG is aggressive enough to achieve the desired results for government which are employment, royalties, taxes, and jobs.”
Moagi further revealed that government in this case opted to stick to industry regulation as opposed to entering the market as a player.
Before the sale, the mine was finalising plans for a $700 million expansion of its operations to double its production to 130,000 tonnes by 2036. At that level, Botswana would be within the top 30 copper producers in the world.
MMG officials revealed that the acquisition will significantly increase the group’s business scale and bring increased exposure to copper with greater geographical diversification of earnings.
Formed in 2009, MMG operates and develops copper, zinc and other base metals projects across Australia, the Democratic Republic of Congo, and Peru. The Hong Kong-listed MMG’s largest shareholder is the state-owned China Minmetals which holds 68% of MMG.
MMG officials revealed that the acquisition of Khoemacau Mine will be followed by aggressive expansion to push the mine’s current output capacity beyond 100,000 tonnes.
Market conditions give the deal a thumbs up as currently, China has been reported to be in urgent need of copper to power its growth. Copper demand and prices have also been rising in recent years and are expected to keep trending upwards, as metals are key to the global energy transition.