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African Mining Services awarded Motheo Copper Project contract

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Global Mining Review,

Perenti Global Ltd has announced its surface mining business in Africa, African Mining Services (AMS), has been awarded the contract for opencast mining services at the Sandfire Resources’ Motheo Copper Project in Ghanzi, Botswana. The contract, which is yet to be finalised, has an estimated value of US$496 million (AUS$648 million at 100% basis) over an initial term of 7 years and 3 months with a provision for a 1-year extension.

Finalisation of the contract is contingent on the satisfaction of two primary conditions:

  1. Sandfire being granted a mining licence for the Motheo Project.
  2. Finalising the terms of the mining services contract.

Under the terms of the mining services contract, AMS will identify a suitable local Botswana company or companies as a joint venture (JV) partner for the project and transition to the JV before the commencement of mining in early 2022.

Perenti Managing Director and CEO, Mark Norwell, said Motheo represents a game changing growth opportunity for AMS and will substantially increase Perenti’s presence in Botswana, one of the world’s most attractive mining jurisdictions, ranked the eleventh most attractive region for global mining investment and holds Africa’s strongest credit rating of BBB+ from S&P.

Norwell said: “Partnering with Sandfire is a great opportunity and collectively we share a strong commitment to the creation of shareholder value while demonstrating the highest standards of safety, responsibility and sustainability. We look forward to demonstrating our capabilities as we deliver on our commitments at the Motheo Project.”

“Growing our footprint in Botswana is aligned with our 2025 strategy, to further expand into stable mining jurisdictions and pursue quality projects. The benefit of adding Motheo to the Perenti project portfolio is the opportunity to leverage our existing in-region operational presence at Zone 5 as well as partnering with Sandfire to develop Botswana’s next large-scale, highly productive, world-class copper mine.

“The Motheo project is another positive step in the ongoing transformation of our AMS business as we seek to create value and certainty for our client Sandfire and the Ghanzi community,” added Norwell.

Paul Muller, African Mining Services, Mining CEO, commented: “We are committed to creating a lasting, positive legacy in Botswana and we expect the Motheo project will create a significant number of high-quality employment opportunities and generate social and economic value for local and regional communities of Botswana. Through this commitment and the establishment of a local joint venture partnership, we expect that more than 95% of the workforce will be citizens of Botswana. Furthermore, and leveraging our existing Maun based state-of-the-art mining training centre, our workforce will have access to the latest mining techniques and technology to enable the creation of a safe, highly skilled and productive workforce to support economic growth and diversification within Botswana.”

“We are also excited by the opportunity to deploy future-focussed mining technology initiatives on this project that will not only provide expected productivity and safety benefits to Sandfire but are also aligned with helping to achieve our combined sustainability goals.”

The Motheo project is located in the Kalahari Copper Belt, an emerging and relatively underexplored copper producing region, in the safe, democratic, politically stable and mining-friendly jurisdiction of Botswana. The project is located approximately 200 km to the south west of the Khoemacau Zone 5 project, where Perenti, through its subsidiary Barminco, is currently engaged to undertake underground mine development works.

Motheo is held through Sandfire’s subsidiary, Tshukudu Metals, and was approved for development by Sandfire’s Board of Directors in December 2020 following completion of a definitive feasibility study on a base case of a 3.2 million tpy operation with expansion potential. Motheo forms part of Sandfire’s investment in a new, long-life copper production hub centred around the Motheo mine. The mine is underpinned by a robust resource that is expected to produce copper for over 12 years, with significant exploration upside and growth potential within Sandfire’s 100%-owned licence holdings in the Kalahari Copper Belt, across both Botswana and Namibia.

Perenti anticipates pre-production work to commence in late 2021 with mining to commence in early 2022.

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African mining news Copper mining news