BHP has established a $40 million ‘earn-in’ agreement with Cobre to explore two copper projects in Botswana’s Kalahari Copper Belt. This deal allows BHP to secure a 75% stake in the projects while providing Cobre with funding for exploration. The collaboration aims to discover potential tier-1 copper deposits and reflects BHP’s strategic focus on copper as a critical resource for emerging technologies.
BHP, Australia’s largest mining company, has entered into a significant agreement to enhance its copper portfolio in Botswana. The $198 billion miner will invest $40 million to control two key copper projects, located in the Kalahari Copper Belt. Through an eight-year ‘earn-in’ agreement, BHP aims to secure a 75 percent stake in these projects managed by ASX-listed Cobre, which retains the remaining 25 percent stake.
Cobre’s executives express optimism about the partnership, noting the potential for “tier-1 deposits” at the Kitlanya East and Kitlanya West prospects. Adam Wooldridge, Cobre’s CEO, stated this collaboration will deliver essential funding and support for advancements in exploration technology. Additionally, Cobre will pursue its Ngami and Okavango copper projects independently.
The Kalahari Copper Belt extends approximately 1,000 kilometers from central Botswana into Namibia, with Sandfire Resources operating the Motheo Mine nearby. BHP’s exploration officer, Tim O’Connor, remarked on the promising nature of these projects, indicating excitement for potential copper-silver deposits. Following a seismic survey at Kitlanya West, additional exploration is slated to begin in April.
There is also a provision for BHP to pay an extra $15 million to Cobre, contingent upon production reports according to Joint Ore Reserves Committee (JORC) standards. These reports provide detailed assessments of mineral deposit value for investors. In its strategic pivot, BHP aims to increase its copper portfolio to counterbalance the expected decline in iron ore revenues.
The company has been active in other copper endeavors, including a significant past acquisition attempt of Anglo American for its copper assets. In South Australia, it is developing a copper province by linking multiple mines to expand production capacity. The drive for copper is relevant, especially as the metal is crucial in emerging technologies like AI and renewable energy.
At the recent IEA Critical Minerals and Clean Energy Summit, BHP’s CEO Mike Henry emphasized the urgent need for substantial investments to meet renewable energy goals, indicating a broader trend in the mining sector to enhance copper production capabilities. Following this new agreement, Cobre shares rose by 1.7 percent, reflecting market interest in the company’s collaboration with BHP.
BHP’s partnership with Cobre marks a strategic move to bolster its copper assets in Botswana, reflecting the growing significance of this metal in modern technologies. The agreement not only facilitates substantial investment for Cobre but also underscores BHP’s commitment to expanding its presence in Africa. The potential for significant copper-silver deposits highlights the importance of such collaborations in addressing global supply challenges in the context of increasing demand for critical minerals.
Original Source: www.news.com.au
