(Ecofin Agency) - Botswana’s copper industry keeps growing, with two mines launched between 2021 and 2023. As copper becomes vital for the country's energy transition, investors are helping to diversify the local mining sector.

On September 23, Australian mining junior company Cobre announced it signed a letter of intent with BHP to negotiate an exclusive joint venture on the Kitlanya West and East copper projects. This deal highlights the increasing interest in Africa's copper potential.

The agreement with BHP will fully fund exploration work on these projects. However, the exclusivity’s duration, and the investment’s amount, are presently unknown.

? Cobre Limited (ASX: #CBE) signs an exclusive letter of intent with @BHP for a potential JV over our Kitlanya Copper Projects in Botswana!

This could be a game-changer for Tier 1 #copper-#silver #exploration.

View the release: https://t.co/y5i8Pf5neN#BHP #Mining #ASX pic.twitter.com/d6BbnsZN2k

— COBRE LIMITED (@CobreLimited) September 22, 2024

If successful, this partnership could help establish a copper industry in Botswana. The Khoemacau and Motheo mines began operations between 2021 and 2023, producing over 100,000 tonnes of copper concentrate annually.

Developing this industry is part of Botswana's efforts to diversify its mining sector, which is currently dominated by diamonds. The latter account for 30% of the country's GDP and tax revenues and 80% of exports. Reliance on diamonds poses risks as fluctuations in the global diamond market can significantly impact the economy.

On September 10, the IMF wrote in a press release: “Botswana is facing a severe slowdown from a diamond market contraction in 2023 and 2024. Growth is expected to fall to 1.0 percent this year, from 2.7 percent in 2023 and 5.5 percent in 2022. This reflects weaker global demand for diamonds and a sharp increase in inventories”

Emiliano Tossou