SOUTH African coal producer Exxaro Resources has scaled back ambitions to add copper to its portfolio after losing out on a producing mine in Botswana, said Bloomberg News.
Citing CEO Ben Magara, the newswire said Exxaro was focusing on advanced exploration projects in copper instead.
The Johannesburg-listed firm was shortlisted to purchase the Khoemacau copper mine before China’s MMG Ltd secured the asset for $1.9bn (£1.5bn) in late 2023.
“Copper mines are too expensive, especially for coal miners and for investors in coal,” said CEO Ben Magara, who took over in April. “We have shifted our criteria and are now looking at advanced exploration projects that we can take up the value curve,” he told Bloomberg News.
Exxaro is targeting opportunities in Botswana, Zambia, Angola and the Democratic Republic of Congo, with Magara estimating the company would need to spend $10m to $30m on exploration before deciding whether to build a mid-sized copper mine capable of producing 50,000 to 80,000 tons annually.
“It’s not going to break the bank and doesn’t interfere with our capital allocation framework,” said Magara.
Copper prices have risen more than 20% this year towards record levels, driven by supply disruptions and growing demand from electrification and renewable energy sectors, said Bloomberg News. Banks including Goldman Sachs expect further gains as the market moves into deficit later this decade.
Whilst remaining principally a coal miner, Exxaro is diversifying. In May, the firm agreed to spend up to R14.6bn (£680m) acquiring controlling interests in two major manganese operations in South Africa.
Magara said the manganese deal is on track to close in the first quarter of 2026.
