BHP Group Eyes Botswana Copper After Failed Anglo American Bid

Global mining giant BHP Group has turned its attention to Botswana's copper resources following a failed £38.6 billion bid for Anglo American. Reports indicate that the primary motivation behind the bid was BHP's desire to acquire Anglo's copper mines, highlighting copper's growing importance as the world shifts away from fossil fuels.

BHP has stated on its website that it is mining copper because "we believe that demand for copper will grow due to grade declines at existing copper mines, the radical urbanisation of large populations in China and India, and the electrification of energy and transportation." The company also emphasized that "the rise of renewable energy sources such as wind and solar requires copper for their infrastructure."

Now, in what is seen as a strategic move, BHP is negotiating an exclusive joint venture agreement with Cobre Limited over its Kitlanya Copper Projects, located within the Kalahari Copper Belt.

Cobre Limited announced the execution of a letter of intent with BHP's wholly-owned subsidiary to formalize talks for a significant earn-in agreement on its Kitlanya West and East projects. These projects are positioned on the northern and southern margins of the highly prospective Kalahari Copper Belt, which has drawn increasing attention from international mining companies due to its rich copper and silver deposits.

The Kitlanya Projects, owned by Cobre, represent a crucial opportunity for BHP to strengthen its presence in Africa's mining sector, as Botswana emerges as a key player in the continent's copper production. Reports indicate that copper demand has surged globally, driven by the metal's essential role in the transition to clean energy technologies such as electric vehicles and renewable energy infrastructure.

The proposed transaction follows Cobre's successful participation in the BHP Xplor program, which also provided funding for the recently completed seismic survey on the Kitlanya West project. Cobre stated that the proposed transaction underscores its confidence in the potential for its projects to host Tier 1 copper-silver deposits. Cobre noted that a partnership with BHP "would provide the exploration scale and expertise to maximize our chances of making significant new discoveries on our basin margin exploration ground while retaining 100% ownership of our Ngami and Okavango Copper Projects, which are excluded from the proposed transaction."

The transaction is subject to approval and the execution of formal binding documents, as well as the completion of BHP's due diligence investigations within the exclusivity period. Final details of the transaction will be released to the market once the formal documents are completed.

Commenting on the proposed transaction, Cobre's Chief Executive Officer, Adam Wooldridge, stated that the successful negotiation and completion of this "significant transaction with BHP, one of the world's leading mining companies, will be a major milestone for Cobre as a company." He added that participating in the BHP 2024 Xplor cohort provided the opportunity to conduct a belt-scale review of the Kalahari Copper Belt, culminating in the collection of seismic data over the prospective northern margin of the belt.

"The proposed transaction with BHP would allow us to fully fund our follow-on exploration programs and focus on discovering the Tier 1 deposits we believe may be hosted in our Kitlanya West and East Projects," Wooldridge said.