Johannesburg-listed Impala Platinum (IMPJ.J), Exxaro
Resources (EXXJ.J) and Sibanye Stillwater (SSWJ.J) are weighing bids for the
copper and silver mine in Botswana, said the sources with knowledge of the
matter, who declined to be named due to the sensitivity of the information.
A number of unnamed Chinese investors, are also on the list
of companies interested in Khoemacau Copper Mining operations, one of the
sources said.
Impala declined to comment. Exxaro did not immediately
respond to emailed questions. Sibanye confirmed its interest.
"We are looking all the time for opportunities and
Khoemacau came up on our radar and we have entered into an non-disclosure
agreement to try and understand the opportunity better," Sibanye
spokesperson James Wellsted told Reuters. "But Khoemacau is a bit more
competitive and we are not going to enter into a bidding war that ends up not
creating value."
An increase in copper demand for applications from solar
panels to electric cars in coming years has prompted miners to scramble for
more supplies of the metal.
Copper prices have fallen due to fears of a global slowdown,
but longer-term prospects for the metal and a competitive bidding process will
make it hard for any of the bidders to strike a bargain, two of the sources
said.
Khoemacau's owners - Cupric Canyon LP, a U.S. private equity
firm with funds managed by Global Natural Resources Investments (GNRI) and
Resource Capital Fund VII LP - said in May they had begun to engage with
potential buyers.
The process is expected to take several months and be
finalised close to the end of 2023, a Khoemacau spokesperson said.
Diversified miner South32 (S32.AX) and Australian rival
Sandfire Resources (SFR.AX) dropped out of the race after the first bidding
round due to the mine's high valuation, the two sources said.
Khoemacau may be valued at between $1.5 billion and $2 billion,
three banking sources added.
South32's CEO Graham Kerr appeared to balk at the cost
during the company's earnings results in August, saying: "That's probably
a very competitive process and one that will be a little bit too rich for our
blood."
South32 declined to comment further.
Analysts at Citigroup said in a note that while the assets
could be valued at $1.8 billion, the investment would be worthwhile for South32
at $1.2 billion.
A spokesperson for Sandfire declined to comment on the
process.
Khoemacau is located in the Kalahari Copper Belt, a vast
swathe of land that stretches from north-east Botswana to parts of western
Namibia.
It produces about 60,000 tons of copper and about 2 million
ounces of silver per year. Future output could be ramped up to about 130,000
tons of copper and 5 million ounces of silver per year with additional
investments.
Khoemacau's owners are open to either a partnership or an
outright sale, one of the sources said.
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