MMG Limited Expands its Portfolio with Acquisition of Khoemacau Copper Mine in Botswana
MMG Limited (HK.1208) has unveiled a pivotal move in the mining industry by finalizing a Share Purchase Agreement (SPA) to acquire the parent company of the esteemed Khoemacau Copper Mine in Botswana.
This strategic acquisition comes with an effective Enterprise Value of US$ 1,875 million and marks a significant milestone in MMG’s pursuit of establishing a robust portfolio comprising top-tier mines catering to the needs of a decarbonized world.
Khoemacau stands out as one of the premier new copper mines on a global scale, renowned for its exceptional quality. The transaction seamlessly aligns with MMG’s overarching strategy of curating a collection of high-caliber mines that supply minerals critical to a world transitioning towards sustainability.
Key Features of the Acquisition
The acquisition promises an annual copper equivalent production ranging from 50 to 65 thousand tonnes, set to expand significantly to 135 to 155 thousand tonnes in the near term.
This expansion comes coupled with a prolonged operational lifespan, ensuring a mine life well exceeding 20 years. Additionally, the operational costs post-expansion are projected to rank among the lower echelons of the cost curve.
The Khoemacau acquisition brings with it a dominant land holding spanning the promising Kalahari Copper Belt, encompassing a substantial 4,040 km2 tenement package. Within this expanse lies a rich mineral resource, boasting 6.4 million tonnes of contained copper and 263 million ounces of contained silver.
Operating in Botswana, a stable and esteemed mining jurisdiction, further elevates the attractiveness of this venture. The highly skilled team behind Khoemacau has demonstrated their prowess by successfully spearheading the mine’s evolution, commencing from the discovery of Zone 5 in 2012 to achieving first production in 2021.
MMG’s Chairman, Jiqing Xu, expressed enthusiasm about the acquisition, highlighting its role in steering the company towards becoming a leading international mining entity geared for a low-carbon future.
Emphasizing the strategic synergy, he underscored the mine’s quality, expansion potential, and its pivotal position within the Kalahari Copper Belt.
Strategic Vision and Forward Momentum
The transaction underscores MMG’s confidence in copper as a crucial commodity amidst the accelerating global energy transition.
Interim CEO Liangang Li reinforced this sentiment, lauding the mine’s previous owners for advancing it from exploration to full-scale operation.
He also emphasized MMG’s commitment to further growth in the copper sector and expressed anticipation in collaborating with the proficient Khoemacau team.
The completion of this acquisition in the first half of 2024 holds promise for MMG’s future endeavors. Alongside ongoing projects like the Las Bambas development and the Kinsevere Expansion Project, the addition of Khoemacau is poised to significantly augment MMG’s copper production, paving the way for enhanced opportunities for stakeholders, host communities, and shareholders alike.
The transaction was advised by Macquarie Capital and Citigroup, acting as joint financial advisors to MMG, marking a collective effort to ensure the success and potential of this groundbreaking acquisition.
MMG’s stride towards a sustainable and thriving future in mining is further solidified with this acquisition, propelling the company into a realm of unprecedented growth and opportunity.
