In the Kalahari Copper Belt (KCB), there are currently three players: MMG, Sandfire Resources and Cobre Limited. MMG Limited (MMG) (HK.1208) in November 2023 announced that it has entered into a Share Purchase Agreement (SPA) to acquire the parent company of the Khoemacau Copper Mine in Botswana, the neighbour of Cobre for roughly USD 2 billion. Another major player in this belt is Sandfire Resources, a USD 3.4 billion company.

In this article, our focus is on how after MMG and Sandfire, Cobre is set to become the next billion-dollar company in the Kalahari Copper Belt. But first, let's have a brief discussion on how MMG and Sandfire achieved success in KCB.

Current Giants in KCB

MMG Limited

The first one is MMG Ltd, a Chinese company, that recently acquired a significant stake in the Kalahari Copper Belt (KCB) by buying an already-established company Khoemacau Copper Mine. In November 2023, they announced a US$1.87 billion deal to purchase the Khoemacau Copper Mine situated within the KCB. This acquisition suggests MMG's interest in expanding its copper mining operations into the Kalahari Copper Belt, known for its copper-silver mineralisation potential.

MMG has acquired a dominant position in the Kalahari Copper Belt with a vast land holding of 4,040 square kilometres. The Khoemacau Copper Mine within this area is already a productive mine, generating 50,000 to 65,000 tonnes of copper equivalent annually. With planned expansion, this production is expected to nearly triple, reaching a range of 135,000 to 155,000 tonnes. Furthermore, the mine boasts a long life exceeding 20 years and is estimated to have low production costs (C1 costs) compared to the industry average after the expansion. 

All these details tell how big the potential is for Cobre in the KCB, with the added advantages it possesses over its competitors.

Sandfire

Here’s how Sandfire succeeded in the KCB:

1. Land Acquisition: Sandfire secured a significant landholding stretching across a large portion of the central and western Kalahari Copper Belt in Botswana. This strategic move positions them well to explore and potentially discover new copper deposits.
2. Focus on Motheo: Their primary focus has been the development of the Motheo Copper Mine. In December 2020, they made the final investment decision to proceed with the mine's construction.
3. Rapid Development:  Following the go-ahead, construction progressed quickly. They completed a Definitive Feasibility Study, finalised plans for a 3.2 million tonnes per annum (Mtpa) processing plant, and secured an open-pit mining approach.
4. First Copper in 2023: Just under three years after the investment decision, Sandfire achieved a major milestone – the production of the first copper concentrate at Motheo in May 2023.

Sandfire from exploration to development took just 3 years, Cobre has found high-grade copper here that none of its competitors has access to and history says it will take very little time to extract copper, let’s discuss it more in detail.

Why Cobre Could Be the Next Giant in KCB

The major advantage Cobre has over its competitors is that Cobre has discovered a 40 km stripe, between 10 - 30 metres deep, of very high-grade copper. Cobre therefore has the highest grade copper, trending along a 40 km strike zone, which is located in one of the most globally significant and strategic copper districts. Alongside this 40km strike, there are no more exploration risks to placing this into a resource category. From an exploration point of view, Cobre has now been turned into a developer with this project. 

Cobre has the potential to become a major copper producer and a billion-dollar company due to a combination of factors. Their leadership team boasts extensive experience, particularly within the Kalahari Copper Belt. CEO Adam Wooldridge has a long history of copper exploration in the region, while others on the team have made significant discoveries and contributions to the industry.

Furthermore, the global copper demand is high and is expected to rise due to limited new copper sources and declining quality from existing mines. The lengthy permitting processes for opening new mines further restrict copper production. Cobre's strategic landholdings in the Kalahari Copper Belt, known for its potential for high-grade copper deposits, position them well to capitalise on this situation. Their experienced team's ability to navigate the complexities of mine development could fast-track copper production, potentially filling the looming copper gap.

Looking Ahead

The Kalahari Copper Belt in Botswana presents a unique opportunity for investors seeking exposure to this copper-rich region. The other two players are already big and currently, Cobre is at the right place with the right opportunity and the right tools in hand. While MMG Ltd and Sandfire Resources are the current leaders, Cobre's commitment and strategic approach position it as a company to watch closely. With its experienced team and substantial investment, Cobre is well on its way to potentially becoming the third major player in the Kalahari Copper Belt, poised to join the ranks of these billion-dollar corporations.