Exxaro CEO says copper ambitions remain but now more modest

South African coal producer Exxaro Resources Ltd. still wants to acquire copper assets but has scaled back its ambitions since missing out on a mine in Botswana, the firm’s new chief executive officer said.

While Exxaro will remain principally a coal miner, the company is expanding into other commodities. In May, the firm announced it had agreed to spend up to 14.6 billion rand ($854 million) to buy controlling interests in two major manganese operations in its home country.

Copper is the other mineral on Exxaro’s radar, according to CEO Ben Magara. The Johannesburg-listed company reached a shortlist to purchase a copper mine in Botswana, which is already in production, before China’s MMG Ltd. came out on top in late 2023, paying $1.9 billion.

The experience of bidding for the Khoemacau operation taught Exxaro that “copper mines are too expensive, especially for coal miners and for investors in coal,” said Magara, who took over as CEO in April but chaired the company’s investment committee at the time.

“We have shifted our criteria and are now looking at advanced exploration projects that we can take up the value curve,” he said in an interview – naming Botswana, Zambia, Angola and the Democratic Republic of Congo as countries of interest to Exxaro.

Accidents and disruptions at major mines have squeezed supply, helping drive copper prices up more than 20% this year toward a record. The global shift to electrify industry and transport – and increase renewable power generation – is also set to underpin rising demand for the metal. Banks including Goldman Sachs Group Inc. expect further gains as the market moves into a deficit later this decade.

Exxaro would probably need to spend $10 million to $30 million on the kind of copper projects it’s looking for before being able to reach a decision on whether to build a mid-sized copper mine capable of producing 50,000 tons to 80,000 tons a year, according to Magara.

“It’s not going to break the bank and doesn’t interfere with our capital allocation framework,” he said.

Exxaro is also on track to close the manganese deal announced earlier this year in the first quarter of 2026, Magara said – adding the company wants to make further acquisitions in the sector. South Africa is the world’s top exporter of mid- to high-grade manganese ores, which are mainly used in steelmaking.

(By William Clowes)