Bill Gates-backed mining company discovers vast Zambian copper deposit

KoBold Metals is backed by Microsoft founder Bill Gates and Amazon founder Jeff Bezos. Photo / New York Times

A mining start-up backed by Bill Gates and Jeff Bezos said it had discovered a vast copper deposit in Zambia, offering a potential boost to the West’s efforts to cut its reliance on China for metals vital to decarbonise everything from cars to power transmission systems.

KoBold Metals said on Monday it had found Zambia’s largest copper deposit in a century, estimating the Mingomba site in the northern Copperbelt province will become one of the world’s top three high-grade copper mines.

The discovery comes as the United States embarks on a charm offensive and infrastructure push in Africa in an effort to compete with China’s control over minerals that are critical for defence, renewable power and electric vehicles.

The US government is backing the development of the Lobito railway, a line to transport metals in the region connecting the Democratic Republic of Congo and Zambia to the Lobito port in Angola.

While demand for copper is forecast to soar as countries set up efforts to electrify their transport systems and pivot to renewable energy, the world’s largest mining companies are struggling to find high-quality assets.

Copper, which is widely used in construction and industry, is expected to undergo a boom in demand because it is heavily used in power transmission lines, electric vehicles and wind turbines.

“We’ve spent a year with the largest fleet of drilling rigs in Southern Africa,” Josh Goldman, founder and president of KoBold Metals, told the Financial Times.

“We now know that Mingomba will be one of the very highest-grade large copper mines when put into production and it’s very much like Kakula in scale and in grade.”

KoBold expects Mingomba will rival output at the deposit that is part of US billionaire Robert Friedland’s giant Kamoa-Kakula project in the Democratic Republic of Congo.

Backed by Breakthrough Energy Ventures, a climate change investment vehicle founded by Bill Gates, KoBold deploys artificial intelligence to scrape historical geological archives — including old PDFs and even maps hand painted on linen — and uses algorithms to help decide where to explore for minerals.

The California-based company is valued at US$1.15 billion ($1.9b), and also counts BHP, the world’s largest mining group, and oil major Equinor as investors.

KoBold aims to start producing copper at the US$2b underground mine by the early 2030s.

The project has yet to conduct a pre-feasibility study, which provides early estimates of project costs and how economically the metal can be extracted.

If successful, the project would play a big role in meeting Zambian President Hakainde Hichilema’s ambition to more than treble the country’s copper output to 3 million tonnes by 2032, and help the nation dig its way out of debt.

Spending by the world’s biggest mining companies on copper exploration was small relative to volume of the metals the world was expected to need, Goldman said. Exploration companies, meanwhile, were struggling to raise capital because of interest rate hikes, he said.

“Exploration is where babies come from. You can help babies grow, but you’ve got to get the birth rate up,” said Goldman. “That’s the hardest part: how do you find things in the first place.”

He said the company was evaluating a public listing in the next three or four years.

– Harry Dempsey in Cape Town

© Financial Times