Copper cathode sheets ready for export by truck at the Etoile open-pit copper mine, operated by Chemaf Sarl, in Katanga province near Lubumbashi, the Democratic Republic of Congo. (Lucien Kahozi/Bloomberg via Getty Images)
High global copper prices and rising demand are reigniting investment in exploration in Africa’s copper hotspots, with the Democratic Republic of the Congo (DRC) and Zambia attracting significant capital funding and producers looking for revival in places such as Uganda, where copper mining had collapsed.
A 3 May statement from Robert Friedland and Yufeng Sun, the co-chairs of the DRC’s Kamoa-Kakula complex, announced expansion that will make it the third-largest copper mining complex in the world.
“Humanity will likely require as much copper in the next 22 years alone as it did through this point in its history — [about] 700-million tonnes — just to maintain 3% gross domestic product growth,” said Friedland, who is also Ivanhoe Mines’ co-chairperson.
The expansion of Kamoa-Kakula entered a third phase this month that will see it increase its annual copper production to 600 000 tonnes by the fourth quarter of 2024, according to the statement.
The Kamoa-Kakula copper project is a joint venture between Ivanhoe Mines, China’s Zijin Mining Group, the DRC government and Crystal River Global, which is meant to create shareholder value and long-lasting economic and social benefits for the country, thanks to investment in mining operations and beneficiation of the metal before it’s exported.
As part of the mega expansion project, two new underground mines — Kamoa 1 and Kamoa 2 — and the initial decline development at Kakula West will be developed, according to Ivanhoe Mines.
Adjacent to the two new mines at Kamoa, a five-million-tonne-a-year concentrator plant will be established, taking total processing capacity to more than 14-million tonnes a year. Power for the expansion will be hydroelectric, through a partnership with the DRC’s Inga II hydro project, the Kamoa-Kakula statement said.
In Zambia, UK-based mining company Moxico Resources plans to expand its majority-owned Mimbula copper mine, with a $100-million investment.
Moxico started low-cost production in April 2020 at the Mimbula Copper Project on the outskirts of Chingola town.
Zambia’s copper output fell to 800 696 tonnes in 2021 from 837 996 tonnes in 2020 but President Hakainde Hichilema has committed to creating a conducive investment climate for miners and mining exploration. He announced in April that Zambia’s government was close to finding a private investor for its Mopani Copper Mines, one of the country’s biggest. Zambia has been looking for a buyer after taking on $1.5-billion debt to buy Mopani from Glencore in January 2021.
Also in April, Uganda began the official hunt for an investor to revive copper and cobalt production at its defunct Kilembe mine.
“With increase in demand for copper and cobalt worldwide, the government of Uganda, through the privatisation unit, wishes to implement the development of Kilembe mines,” the country’s ministry of finance, planning and economic development said in an expression of interest document.
Kilembe is Uganda’s largest copper mine, with estimated deposits of copper in excess of four-million tonnes. The mine began operations in 1952 and was closed in 1982 when exploration ceased because of depressed world copper prices.
Winning bidders must also process Kilembe’s copper output for domestic use. The government wants local copper used in the manufacture of electrical wires, transformers and coils to bolster its manufacturing industry, as well as for export.
All these developments are geared towards tapping into the current global demand for copper with higher returns.
In March, Fitch Ratings raised its copper price assumptions from $8 500 to $9 500 a tonne in 2022 and to $8 500 in 2023, citing increased post-pandemic demand, tight markets and short-term supply disruptions, particularly as a result of Russia’s invasion of Ukraine.
“Copper is the only commodity where we increased our long-term assumptions due to its use in electrification,” said Fitch Ratings in its latest Global Metals and Mining Price Assumptions. Beyond 2025, Fitch pegs copper prices at $7 000, a rise from an earlier projection of $6 700.
“Some commodities also benefit from increased longer-term demand due to their role in global decarbonisation,” said Fitch.
Audit firm EY said the average copper price of $6 726 a tonne over the past decade has been lower than the usual “incentive price”, which ranges between $7 000 and $8 000 a tonne for new project developments.
EY also has sentiments affirming the industry’s competitiveness in the longer term, driven by electric vehicle adoption, renewable power generation and green infrastructure.Global copper reserves grew at a compounded annual growth rate of 3.3%, in line with 3.7% annual compounded growth in exploration budgets, according to EY. — Bird Story Agency.