South32 interested in Botswana copper mine

Copper assets are highly sought after due to their importance for electric vehicles. Picture: Bloomberg

Australian listed copper miners South32 is believed to be lining up to take a look at the $US2bn Khoemacau copper mine in Botswana, as investment bank Credit Suisse fires the starting gun on the asset’s sale process.

It is understood that promotional material for the sale was sent to interested buyers a week ago and the asset is believed to have attracted wide global interest.

Yet South32 is known to be keen to invest further in copper and has been in the sale process for other global copper assets.

It bid for the Spanish copper mine complex MATSA that was sold to smaller rival Sandfire Resources two years ago for $2.6bn, in what was a bold move by the Australian listed miner in that it was double its market value.

Sources believe that despite strategic benefits for Sandfire to buy the mine, it would be unlikely to progress in the process. 29Metals could look too but it would also likely be an acquisition opportunity that was too large.

Khoemacau is a copper and silver mining company which has a mine with a 22-year life producing 60,000 tonnes per annum of copper.

Located in Botswana’s Kalahari copper belt, it is expected to increase production to more than 130,000 tonnes per annum of copper.

It is owned by private equity firm Cuprous Canyon Capital, which is owned by Global Natural Resources Investments and Resource Capital Fund VII.

Copper assets are highly sought after as groups look to gain exposure to minerals used to make batteries for electric vehicles.

China Moly was also said to be testing market interest after receiving an offer for its Northparkes copper and gold mine, 27km northwest of Parkes in central west NSW.

Some were pointing to Copper Mountain Mining acquirer Harmony Gold as the interested suitor.

Yet sources say that despite a sale process being set to wrap up on the NSW mine in a couple of weeks, it was radio silence on the sale process front, which could suggest that China Moly has shelved its sale plans.

The asset, which was previously owned by Rio Tinto, had been up for sale through Citi and Standard Chartered and is considered a long-life mine.

Elsewhere, BHP last week received first round bids for its Queensland-based Blackwater and Daunia coking coal mines.

As earlier reported by this column, Yancoal was said to be a strong contender for both mines worth a combined $2bn and sources were pointing to either Royal Bank of Canada or Morgan Stanley as its adviser.

Working on the sale for BHP is investment bank Macquarie Capital.