Sandfire fielding enquiries for high-grade copper from Motheo mine in Botswana

Sandfire Resources’ acting chief executive says the company has been inundated with interest for high-grade copper from its new Motheo mine in Botswana, which will start production in the coming weeks (reports The West Australian).

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Jason Grace said the copper grade from the concentrate at Motheo — which will initially process 3.2 million tonnes a year — will be even higher than the DeGrussa project it has been winding down in WA, with estimates of 30 per cent copper.

“To put that in context, what we’ve been producing at DeGrussa — which again is another very high quality concentrate that’s in demand by buyers — that sits at around 23 per cent copper,” Mr Grace told The West Australian after Sandfire booked a $27.1 million loss for the first half.

“We’ve got a lot of interest from traders and also copper smelters and producers and end-users making enquiries about purchasing our product.”

Mr Grace said a range of benefits came from high-grade copper, noting customers could reduce the cost of materials by blending high quality product with lower quality ore. They could also produce a higher volume of copper using the same infrastructure, Mr Grace added, pointing out the Motheo concentrate had low levels of deleterious elements.

Mr Grace said Motheo was proceeding ahead of schedule and on budget — an impressive achievement considering the $364 million project was developed at the peak of COVID-19 — with first production scheduled for early in the June quarter.

Sandfire has put the total cost of development at $US397 million ($590m), which would incorporate future costs for a possible expansion to 5.2Mtpa.

Mr Grace said Motheo would complement Sandfire’s MATSA copper operations in Spain and put the company in pole position to capitalise on the strong copper price and increasing demand from the clean energy transition.

“There’s absolutely no doubt copper demand will increase substantially over the coming years,” he said.

“It’s a platform for this global transition to a low carbon future and particularly enabling this decarbonisation and this transition to EVs, and particularly renewable power sources as well.”

Demand for copper — used to bind and connect batteries, motors and electrical networks — is expected to spike in the coming years amid increasing appetites for renewable technologies.

Mr Grace delivered Sandfire’s financial results for the six month period on Monday before handing over the reins to South32 executive Brendan Harris, who will take over the top job on April 3.

He said Sandfire was not concerned about BHP’s $9.6 billion takeover of South Australian copper miner OZ Minerals ahead of a shareholder vote in April, noting there were obvious synergies given BHP’s operations in Olympic Dam.

“We have different markets and a different footprint. We sell copper concentrate on the open market, so there’s no impact to our business,” Mr Grace said.

Sandfire’s loss in the first half was weighed down by high energy prices for its MATSA project in Spain, inflationary pressures, weaker copper prices and the wind-down of mining at DeGrussa.

Despite reporting record sales of $431.7m for the six months to the end of December — up from $311.8m a year earlier — the company said losses for the half amounted to $27.1m, compared to a $55.2m profit in the prior corresponding period.

The result was largely attributed to group depreciation and amortisation charges that rose by $61.4m to $137.8m, mainly related to the acquisition of MATSA.

Earnings before interest, tax, depreciation and amortisation came in at $135.9m.

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