Built at $412 million (P5 billion), Khoemacau Copper Silver Mine is currently the country’s sole producer of the base metal, as efforts are ongoing to resuscitate the BCL Mines and the Mowana operation, now known as Kopano Copper Mine. Khoemacau produced its first copper-silver concentrate in July last year and in February, officials said production rates were at about 40% of the nameplate 65,000 tonnes and two million ounces of copper concentrate per annum.
With copper prices having risen by about 125% since March 2020, driven by resilient Chinese demand and slowing global production, Khoemacau Copper Mining CEO Johan Ferreira said the emerging mine was looking to ride the wave.
“At the current copper prices and with the significant ramp up, the rates of return are able to pay off debt and increase the value of the company,” he told BusinessWeek during a recent media briefing.
“The less debt, the more value.”
In February, Khoemacau announced that it had drawn $285 million (P3.5 billion) of debt under facilities arranged with external financiers. Another $26.5 million (P325 million) was undrawn but was due to be utilised within the first quarter, which ended on March 31.
Ferreira explained that with the higher trending prices, the cut-off level to breakeven had decreased, providing the mine with a solid platform to reach its nameplate production and achieve the planned expansion. “With the higher prices, you can either mine more lower grade material and still make revenue, or if you are at full production, you get better prices,” he said.
“It’s good news for us to ensure liquidity and to be ready to pay down debt. “We are really proud of what we have achieved, taking Khoemacau from an exploration project, getting investment in and transforming to a significant operational business.”
While efforts continue to ramp up to full production by the end of the year, Ferreira said studies were ongoing toward an expansion project that would increase production to 130,000 tonnes of copper and five million ounces of silver in concentrate per annum.
The expansion will be fed by ore from surrounding prospecting licences and the construction of a new processing plant, which will complement the existing Boseto plant. The two plants combined will have the capacity to process eight million tonnes of ore per annum.
“Our priority is to finalise the ramp-up to full production and reach nameplate, continue studying our expansion and work on other strategic projects such as the renewable energy plant,” the CEO said.
“Khoemacau will be a significant contributor to the global market in the coming decades.”
Khoemacau is owned by two private equity management firms which are holding funds on behalf of investors.
