The deal is the biggest private sector acquisition to date in the local market and gives MMG access to a top-producing asset in the rich but underdeveloped Kalahari Copperbelt. The sale, which is expected to close in the first half of 2024, is subject to certain conditions precedents and approvals.
In determining the consideration, MMG made references to Khoemacau’s mineral resources, the proposed expansion of production capacity, the mine plan, and development rates, tailings management, ESG factors, and in-house valuation.
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.
This acquisition is expected to significantly increase the MMG 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.
Currently, China has been reported to be in urgent need of more mines as its copper smelting capacity has been growing rapidly and is expected to increase by 2027. The country is also said to be the world’s largest consumer of copper using more than half of the total.
Meanwhile, the Botswana Mine Workers Union feels sidelined in the bidding and adjudication process in the sale of the Mine noting that confidentiality and conclusion on Non-Disclosure Agreements were cited as grounds for secrecy in the sale of the mine as updates were only given on meetings held during pre-due diligence and bidding stages in the sales process. Union president, Joseph Tsimako cited that they have no information on MMG’s management and human rights track record in the jurisdictions it owns assets as they were noticed about the buyers at the same time as the general public. “As it stands, the Union has no real appreciation of the company’s level of competency, technical ability or level of regulatory compliance and other sustainability obligations. We do not know how the company’s conditions of work and general welfare of tits 4,500 workers across all these jurisdictions,” he said.
