South Africa 'will be Africa's copper king'

The Northern Cape, especially around Springbok, is expected to develop into one of Africa's biggest copper producing regions in the next five years amid rising demand for critical metals used for clean energy, according to Copper 360 CEO Jan Nelson.

South Africa would surpass the Democratic Republic of Congo (DRC) as the continent's biggest producer of copper within 10 years, Nelson said, citing advantages including better infrastructure.

“The DRC has got some great resources, but a lot of it has been mined and a lot of it is remote. In the next 10 years South Africa will develop the Northern Cape into a much bigger copper belt.

“I think Zambia is great, but that [its performance] is history. If you look forward, we have an undeveloped copper province that is huge and with deposits on the surface. I think neither the DRC nor Zambia will be able to catch up to South Africa when it comes to copper.”

Copper is used in electric vehicle production and for the wiring of wind turbines.

We thought we had a jet ski, now we have an aircraft carrier   

—  Copper 360 CEO Jan Nelson

“The major driver for copper demand is global electrification and the development of power grids. Copper is the conduit for power. Everything needs power. Any infrastructure, everything requires copper. People think the transition to electric vehicles is a big driver of copper, but it is in fact infrastructure development that is driving copper demand and there is not enough supply of copper in the world to meet the demand,” Nelson said.

Nelson, the former CEO of gold miner Pan African Resources, said copper will be the new economic driver. 

“With the development of the Northern Cape as a copper province, we will make sure South Africa has copper in-house, because most of the copper we use is imported.

“There is an extra step. Not only is it about producing copper ore, but it is about beneficiation. It does not help exporting all our ore to Asia and they make copper products and sell it to us at four to eight times the price. We are also going to look at making copper wire and pipes from the ore and copper metal that we produce. That will put South Africa in a competitive space because it has its own copper.”

Seleho Tsatsi, an investment analyst at Anchor Capital, said “a lot of people are positive on copper long term. Increasingly, companies are trying to position themselves to benefit from rising copper demand."

“Electric vehicles require between three to four times more copper than traditional cars.” 

While Tsatsi agreed South Africa would be a significant player in the copper market, “the biggest player is South America in terms of contributing to global supply. China is the biggest consumer of copper and will remain so in the long term.”

Asief Mohamed, chief investment officer at Aeon Investment Management, said "there is a large discrepancy between having access to a resource and achieving economically sustainable extraction of a resource. Mining in general has become a lot more difficult globally. The jury is still out as to whether South Africa can compete on a national scale in terms of copper extraction."

Mohamed added that “copper is essential in the transition to green technologies and the development of a sustainable future, and it plays a fundamental role in several key areas of green technology, especially the topical shift to renewable energy. What is often sadly not discussed, are the concerns about its environmental impact, including the mining and extraction process, which can have adverse effects on local ecosystems and communities.”

The Khoisan mined copper 300 years ago before diamonds, gold and other commodities were mined in South Africa.

Nelson said the Northern Cape was historically a significant copper province with Newmont Mining sinking a 2,000m shaft in Springbok in the 1970s. However, when the copper price slumped, miners moved out. “Now we are back again developing that province.”

Copper 360, South Africa's only listed copper producer, is focused on processing previously mined copper rock dumps and mine surfaces and shallow copper resources in the Northern Cape. Earlier this month it announced resources at its Rietberg mine in the province had surged by 220% from 25,275t in 2022 to 81,200t.

“Where we thought we had a small ore body on one level, the mine has now developed into a world class mine that can be accessed on five levels. It is going to necessitate us to build an additional plant to treat all the ore. It is good from a growth perspective. The analogy I use is we thought we had a jet ski, now we have an aircraft carrier in terms of what the 220% increase in the resource means for us. It has placed us on a different level”.

Some members of the community have raised concerns about the company's alleged failure to consult ahead of operating. GroundUp said in a report this week there was conflict between mineworkers and employees last month in Concordia at the company's  subsidiary Shirley Hayes-IPK.

Nelson said the company had followed all the consultation processes on mining operations and is supported by most community members.

The company had employed 300 people in the last 18 months and would create another 800 jobs in the next year, he said.