ARKANSAS, Oct 4 (Future Headlines)- Exxaro Resources, a Johannesburg-based coal producer, is actively exploring opportunities to diversify its portfolio into metals crucial for the green energy transition. The company is particularly interested in acquiring copper assets in key African copper-producing nations, including Botswana, Zambia, and the Democratic Republic of Congo (DRC), the top copper producer on the continent. Additionally, Exxaro is looking for manganese assets within its home country, South Africa.
CEO Nombasa Tsengwa revealed Exxaro’s strategic intent to expand into these metals, which are in high demand due to their critical role in renewable energy technologies and electric vehicles. While the company has not yet identified specific targets, it is actively exploring potential opportunities to secure copper and manganese assets.
One significant consideration in Exxaro’s approach to these acquisitions is the rising premiums associated with copper assets. Tsengwa acknowledged that these elevated valuations may make partnerships an attractive option for entering the copper market. However, she refrained from specifying when the company anticipates finalizing any deals.
Tsengwa emphasized that Exxaro is pursuing various opportunities concurrently and is open to different approaches, including partnerships, to acquire these assets effectively. She stated, “We are looking at different opportunities simultaneously…Partnerships where it makes sense…There are different tactics for acquiring these assets.”
Exxaro’s move to diversify its asset base aligns with a broader trend among global mining companies. Many are actively seeking to secure supplies of metals critical for the clean energy transition and the growth of electric vehicles.
Among the potential target countries, the DRC stands out as the top copper producer in Africa. Tsengwa indicated that there are attractive assets in the DRC where partnerships with existing miners might be explored. In Zambia, she noted the country’s stability as a key factor in its favor for investment opportunities.
This strategic shift represents a broader trend among South African mining companies looking to expand beyond the nation’s borders. Exxaro joins the ranks of other South African producers, including Sibanye Stillwater and Impala Platinum, in actively exploring opportunities in regions rich in metals necessary for green technologies.
Regarding funding for potential acquisitions, Tsengwa mentioned several options Exxaro could consider. These include using the company’s own resources to finance purchases or exploring alternatives such as debt and equity financing. However, specific details about the company’s budget for these acquisitions were not disclosed.
Exxaro Resources’ decision to diversify into copper and manganese assets underscores the growing importance of these metals in the transition to a more sustainable and environmentally friendly energy landscape. As the world’s demand for clean energy technologies and electric vehicles continues to rise, securing a reliable supply of copper and manganese has become a strategic imperative for companies like Exxaro looking to play a vital role in the global green revolution.
Writing by Alireza Sabet; Editing by Sarah White