China Minmetals Corp's acquisition of a large-scale copper mine in Southern Africa's Botswana is expected to help meet enduring strong demand for the metal in China, said industry analysts.
MMG Ltd, a unit of mining giant China Minmetals, has finalized acquisition of the Khoemacau copper mine, located in the Kalahari Copper Belt, the company said late last month.
China Minmetals Corp clinched the mine with a deal worth $1.875 billion in November.
The Khoemacau Copper Mine Site
The Khoemacau mine was put into operation in June 2021, targeting an annual output of 60,000 tons of copper and 1.6 million ounces of silver. It added that the long-life mine has both cost-competitive advantages and rich mineral resource potential.
The project, with copper reserves of over 6 million metric tons and mining rights covering an area of more than 4,000 square kilometers, is the largest overseas copper mine acquisition by a Chinese company since 2018. It is also the largest single investment by a Chinese enterprise in Botswana to date, it said.
China Minmetals said the rapid development of emerging industries such as new energy vehicles, clean energy and artificial intelligence continues to drive copper resource consumption amid increasing demand for the base metal at home and abroad.
The acquisition is a critical move amid the company's resolve to improve its ability to ensure the supply of strategic resources and vigorously promote the increase of reserves and production, the company said.
Currently, China is the world's largest consumer and importer of copper resources, with a dependency rate of over 70 percent. More than 60 percent of copper ore imports come from Chile and Peru, it said.
An analyst said copper, as one of the critical metals for the transition to low-carbon energy, is ideal for electrical uses due to its combination of conductivity and ductility.
There is fast-growing demand from the electric vehicle and renewable energy sectors for copper, which is also widely used in power, transportation and construction, said Zhao Xiangbin, chief strategist at Beijing Gold and Forex Fortune Investment Management.
"The acquisition will also ensure the corporation's leading position in the nonferrous sector and the strategic security of nonferrous resources such as copper in China," he said.
Zhao said China relies heavily on Chile and Peru for copper imports, so the African deal will further diversify import channels and better secure supplies of strategic resources.
The rapid expansion of Chinese smelters pushed the country's refined copper output up 13.5 percent last year to a record 13 million metric tons. Imports of copper ore and concentrate were 9.1 percent higher than a year earlier at 27.5 million tons, also a record high, according to official data.
According to forecasts, world copper consumption is likely to rise about 24 percent between 2023 and 2033, to reach some 32 million tons a year.
To get on course for net zero emissions by around 2050, copper supplies would have to increase even faster, it said.
Low-carbon technologies often require more metal than their higher-carbon counterparts.
Offshore wind, for example, uses about three times as much copper as coal-fired power generation in terms of tons per gigawatt of capacity. An upper-end electric vehicle might include about 78 kilograms of copper per vehicle, compared to about 22 kg in an equivalent gasoline-powered model, said Ed Crooks, vice-chairman of energy for Americas at consultancy Wood Mackenzie.
Copper production in the Democratic Republic of the Congo has soared over the past two decades, hitting about 3 million tons a year, largely the result of investment by Chinese companies, Crooks said.
The consultancy estimates that the share of global copper demand coming from green sectors — including renewables and EVs — is on course to double over the next 10 years, from about 8 percent to about 16 percent.(By Zheng Xin)
About CHINA MINING
China Mining Conference and Exhibition (CHINA MINING) is officially supported by Ministry of Natural Resources China. Since first held in 1999, CHINA MINING has become one of the world’s top mining events and one of the world’s largest mining exploration, development and trading platforms, covering all aspects of the whole mining industry chain, including survey and evaluation, exploration and mining, techniques and equipment, investment and finance, trade and services, etc., playing an active promotion role in creating exchange opportunities and enhancing mutual cooperation between domestic and foreign mining enterprises.
With the theme of "Innovation Promotes High-Quality Development of Mining", The 25th China Mining Conference and Exhibition (CHINA MINING 2023) was held at Tianjin Meijiang Convention Center of Tianjin China on October 26-28, 2023. This session was held in a combination of “offline oriented, online assisted”, restored the offline entities to hold conference and exhibition. At the same time, relying on the "Cloud Platform for China Mining Conference and Exhibition ", it provided the industry and the society with 24-hour uninterrupted information services and realized the "never ending" of the event. CHINA MINING 2023 consisted of the opening ceremony, keynote session, summit forums, thematic forums, "offline + online" exhibition, VIP tours, ministerial bilateral talks, BOCI night, welcome party, networking dinner, mining interviews (online), etc.. For more information about CHINA MINING 2023, please visit: www.chinaminingtj.org/en/.
