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Chinese-backed miner MMG has snatched a coveted Botswanan copper mine from beneath the noses of worldwide rivals. Its buy of Canada-based Cuprous Capital, the corporate that owns the high-grade (2 per cent) Khoemacau mine, concludes a protracted search. Despite hovering copper costs, China is decided to safe long-term provides of a steel essential to the inexperienced vitality transition.
Global copper producers have lengthy eyed the mine, which holds certainly one of Africa’s largest deposits. Khoemacau’s flagship mission goals to ship 60,000 tons of copper a 12 months. The deal values Cuprous Capital at an enterprise worth of $1.9bn.
MMG is headquartered in Australia however listed in Hong Kong, and its largest shareholder is China Minmetals, which is state-owned.
China urgently wants extra mines. Its copper smelting capability has been rising quickly and will improve by one other 45 per cent by 2027. Global competitors for copper focus has surged.
Supply is constrained. Political unrest at Panama’s Cobre mine has disrupted and lowered output. Strikes in Peru have added to uncertainties. The worth for copper in Shanghai rose to $9,506 on Tuesday, a two-month excessive. LME costs have risen equally this week.
Energy transition targets imply costs for the pink steel are headed larger nonetheless. Renewable vitality programs use as a lot as 5 instances extra copper than fossil fuel-based technology. China is on observe to double its photo voltaic capability 5 years forward of its 2030 objectives. Solar panel exports to Europe practically doubled final 12 months.
Meanwhile, an electrical automobile makes use of practically 3 times as a lot copper as its petrol counterpart. EV charging stations use massive quantities and will amp up demand additional.
MMG shares have risen by 1 / 4 previously 12 months and commerce at 10 instances ahead earnings. That is double the extent of a 12 months in the past, a premium to international friends.
For now, China is the world’s largest shopper of copper, utilizing greater than half of the entire. Expect its state-backed miners to proceed bidding up the worth of the steel. China is keen to pay high greenback to bolster the competitiveness of key industries.
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