https://www.miningweekly.com

BHP discussing Congo copper deal in shift of strategy

An image of copper ore mined in the DRC

Photo by Bloomberg

4th October 2021

By: Bloomberg

  

Font size: - +

BHP Group is in talks about buying into a copper project in the Democratic Republic of the Congo, marking a dramatic departure from the world’s biggest mining company’s policy of shunning risky jurisdictions.

The Melbourne-based miner is in early discussions with billionaire Robert Friedland’s Ivanhoe Mines to buy into the Western Foreland project, a huge exploration territory that neighbours Ivanhoe’s Kamoa-Kakula copper mine, according to people familiar with the matter, who asked not to be identified as the talks are private. There’s no guarantee BHP will agree a deal with Ivanhoe, and other mining companies are also interested in the project, the people said.

Ivanhoe said in an emailed response that it doesn’t comment on specific negotiations. A spokesperson for BHP said the company declines to comment on market rumoUr and speculation.

A foray into a nation emerging from decades of conflict would mark a shift in strategy for BHP, which has operated mainly in more developed countries in recent years. The company sold its last mining asset in Africa -- the rights to develop an iron-ore deposit in Guinea -- to Friedland in 2019 as it focused on Australia, Canada and Chile.

During the 18-month tenure of Chief Executive Officer Mike Henry, BHP’s position has softened. There’s a realisation that to get access to the best mineral deposits for the global energy transition, the company needs to operate in more risky jurisdictions. BHP shifted its exploration headquarters to the financing hub of Toronto this year.

BHP is especially bullish on copper, a metal used for wiring that’s crucial to decarbonization. Like its major rivals, BHP is expecting a surge in demand, while long-term supply looks constrained amid a lack of new mine development and as growth in top producer Chile slows amid deteriorating ore quality and huge investment burdens.

CONGO BET
While BHP has already shown more appetite for risk by building a stake in Ecuador copper mine developer SolGold, making a bet on the DRC is a significant step further. While the country is the biggest source of cobalt and Africa’s largest producer of copper, corruption in the industry has kept the nation among the poorest in the world.

The challenges of the DRC are highlighted by Ivanhoe’s Kamoa-Kakula mine, which started operating earlier this year. While it’s one of the highest grade copper mines in the world, with the potential to become one of the biggest, Chinese companies helped fund it as Western rivals were deterred by the risks associated with the country.

Ivanhoe points to the presence of BlackRock Inc. and Fidelity on its shareholder register as underscoring the transparency of the Vancouver-based firm’s operations in the DRC.

Friedland, who is Ivanhoe’s founder and executive co-chairperson, made his fortune from a Canadian nickel project and was behind a massive copper-gold discovery in Mongolia that’s now operated by Rio Tinto Group.

Edited by Bloomberg

Article Enquiry

Email Article

Save Article

Feedback

To advertise email advertising@creamermedia.co.za or click here

Showroom

Advanced Fire Suppression Technologies
Advanced Fire Suppression Technologies

Established on 1 March, 2000, by Barries Barnard, Advanced Fire Suppression Technologies (AFST) and the Advanced Group stands as Sub-Saharan...

VISIT SHOWROOM 
Bell Equipment
Bell Equipment

As one of South Africa's leading manufacturers, Bell Equipment distributes and exports its wide range of heavy equipment globally to mining,...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.047 0.909s - 128pq - 2rq
Subscribe Now