South African coal miner Exxaro Resources is looking to diversify into metals that are in high demand for the green energy transition, such as copper and manganese. The company is exploring acquisition opportunities in Botswana, Zambia, and the Democratic Republic of Congo (DRC), where some of the continent’s largest copper deposits are located. It is also interested in manganese assets in South Africa, its home country.
According to CEO Nombasa Tsengwa, Exxaro Resources has not yet identified specific targets but is considering different options and strategies, including partnering with existing miners. She said that partnerships may make sense given the current market’s high premiums for copper assets. She declined to say how much the company plans to spend or when it expects to conclude a deal.
“We are looking at different opportunities simultaneously,” she said. “Partnerships where it makes sense…There are different…tactics for acquiring these assets.”
Exxaro Resources is not the only South African miner eyeing copper opportunities in Africa. Sibanye-Stillwater and Impala Platinum are reportedly competing to acquire the Khoemacau copper mine in Botswana, which could be valued between $1.5 billion and $2 billion. The mine is owned by Cuprous Capital, a private company backed by US private equity firm Cupric Canyon Capital and Resource Capital Fund VII.
Copper is one of the key metals for the transition to renewable energy, as it is widely used in solar and wind power generation, electric vehicles, and new electricity infrastructure. According to an S&P Global Market Intelligence report, global copper demand from renewables is expected to increase from 700,000 tonnes annually in 2020 to 1.8 million tonnes annually in 2030.
Manganese is another metal essential for the green energy transition, as it is used to make batteries for electric vehicles and grid storage. According to a report by Roskill, global demand for manganese from batteries is projected to grow from 90,000 tonnes per year in 2020 to 1.4 million tonnes per year in 2030.
Exxaro Resources, which produces mainly thermal coal for power generation and metallurgical coal for steelmaking, said that it is no longer prioritizing a search for bauxite assets in Guinea, which it had previously considered. The company said it could use its resources or other financing options, such as debt and equity, to fund its acquisitions in the metals sector.
Tsengwa said that Exxaro Resources is committed to supporting the green energy transition and reducing its carbon footprint. She said that the company aims to achieve net-zero emissions by 2050 and has already invested in renewable energy projects in South Africa.
“We believe we have a role to play in this transition,” she said. “We are not just looking at it as an opportunity, but also as a responsibility.”
Source: Business Insider Africa
