Speaker 1: Bloomberg Audio Studios, podcasts, radio news. It may not have
Speaker 1: the cachet of gold and silver, but a less shiny,
Speaker 1: though perhaps even more important metal is the focus of
Speaker 1: many mining companies across Central and Southern Africa.
Speaker 2: By twenty forty, an additional nine million tons of copper
Speaker 2: will be required each year to keep pace with the
Speaker 2: global demand. Zambia recognizes our crucial role emitting this demand
Speaker 2: to power this new green African future.
Speaker 1: This will shape the future of our world as we
Speaker 1: drive towards electrification to protect our planet, and Zambia is
Speaker 1: a major driver of this global goal.
Speaker 3: It is the most compelling a trade I have ever
Speaker 3: seen in my thirty plus years of doing this.
Speaker 4: You know, it's the highest conviction trade they've ever seen.
Speaker 1: Today we'll hear why Zambia is betting big on copper
Speaker 1: and how the DRC has become the second largest producer
Speaker 1: in the world. I'm Jennifer's Abasaga and this is the
Speaker 1: Next Africa podcast, bringing you one story each week from
Speaker 1: the continent driving the future of global growth with the
Speaker 1: context only Bloomberg can provide. We may think of copper
Speaker 1: as the metal in our pipes, or even some of
Speaker 1: our smaller coins, but its use in electrical components is
Speaker 1: making it crucial as the world transitions to green energy.
Speaker 1: In a moment, will head to the Democratic Republic of Congo,
Speaker 1: the second largest producer of the metal in the world.
Speaker 1: But first let's focus in on Zambia. The country has
Speaker 1: recently announced a new mine which could become the third
Speaker 1: largest copper mine in the world, and that's just the
Speaker 1: star of their ambitions. Bloomberg's reporter Matthew Hill has been
Speaker 1: following the country's copper plans for quite a while, and
Speaker 1: he's joining us now.
Speaker 3: Hi, Jen, thanks very much for having me on How
Speaker 3: you doing good Good?
Speaker 1: This is a great topic and a very timely topic
Speaker 1: for a lot of reasons. You've covered the mining industry
Speaker 1: across Zambia for quite a while, but we're going to
Speaker 1: focus in on copper today because copper is really the
Speaker 1: hot topic, the hot metal. It seems like that that
Speaker 1: many people are focused on right now, not just in Africa,
Speaker 1: but also internationally. When did it become the metal of concern?
Speaker 3: Certainly when it's price shut up above ten thousand dollars
Speaker 3: a ton this year, a lot more people started paying
Speaker 3: attention to it. Over the past few months, there's been
Speaker 3: a flood of investor money coming into copper.
Speaker 1: It's it can trade whatever investors think it's worth.
Speaker 5: There's very it's very an elastic on the demand and
Speaker 5: supply side to price.
Speaker 3: But already over the past couple of years, there's been
Speaker 3: a growing consensus that for the will to get anywhere
Speaker 3: close to meeting our emissions reductions targets, we're going to
Speaker 3: need a lot more copper. It's the medal of electrification
Speaker 3: and goes into everything from evs to wind turbines and
Speaker 3: power transmission networks. That's the demand side, but on the
Speaker 3: supply side, experts see it's becoming increasingly difficult to build
Speaker 3: new copper minds.
Speaker 1: Earlier, we played this clip from Jeff Curry, who's a
Speaker 1: veteran copper ball He was on our Odd Lots podcast.
Speaker 1: Is the excitement shared from governments from public sector across
Speaker 1: the continent.
Speaker 3: Certainly at least to some extent, When the world's biggest
Speaker 3: mining company, that's PHP, tried to buy its rival Anglo
Speaker 3: American for forty nine billion dollars this year, it wasn't
Speaker 3: the fable the beer's diamond mining business. It was after
Speaker 3: it was Anglo's copper mines that were the main price.
Speaker 3: In the words of Zambia's Finance minister, copper is the
Speaker 3: new oil and countries that have it, like Zambia are
Speaker 3: eager to exploit it.
Speaker 1: Matt when you talk about the minister saying that copper
Speaker 1: is the new oil, how all in is Zambia going
Speaker 1: on their exploitation of the metal.
Speaker 3: That's a really interesting question. For almost a decade, they
Speaker 3: were at loggerheads with the mining industry, trying to get
Speaker 3: more tax revenue out of the mining industry, constantly changing
Speaker 3: the mineral's tax regime and basically trying to squeeze the mines.
Speaker 3: That led to I guess you Gene called it a
Speaker 3: flight from the mining industry. New government under President Haka
Speaker 3: ind Hichilema came into power. They've made a concerted effort
Speaker 3: to man fences with the mining industry. They just want
Speaker 3: to go all out to grow copper production. The government
Speaker 3: is already making some headway. They've got some new investors
Speaker 3: coming in a US company called Cobol Metals, which has
Speaker 3: been carrying out exploration at its site in Zambia's Kopper
Speaker 3: Bold Province, just south of the Congo border since announcing
Speaker 3: its investment in that asset in December twenty twenty two,
Speaker 3: it says it's proving up a hybrid copper deposit and
Speaker 3: it plans to start building the mine there.
Speaker 1: So then, clearly, I mean the way you just spelled
Speaker 1: that out. Clearly President Gilemma sees a long term benefit
Speaker 1: for the economy with these tax breaks that he is
Speaker 1: offering to these companies. What is it that you've heard
Speaker 1: him say about the the transformative effect that it could
Speaker 1: potentially have on the economy.
Speaker 3: Copper production is very much part of his government's economic growth.
Speaker 3: Flats and copper in Zambia is super important. The country
Speaker 3: depends on copper for about seventy five percent of its
Speaker 3: export earnings. Zamya's Africa's first pandemic era, sovereign default on
Speaker 3: its debt and its struggle to get out of default.
Speaker 3: It still is busy with the whole restructuring process, but
Speaker 3: the point being that the money that it will earn
Speaker 3: from growing its copper production is going to be crucial
Speaker 3: for the government to be able to service its newly
Speaker 3: restructured debts.
Speaker 1: When you talk about President h Lemma, he's done a
Speaker 1: lot of global traveling. He's meeting with a lot of
Speaker 1: investors and presidents, and he's at summit's talking about his country.
Speaker 1: He's really public facing when he talks about sort of
Speaker 1: the potential here.
Speaker 2: Every time we're talking about that attracting investments and partnership,
Speaker 2: the local business community, who we love so much, begin
Speaker 2: to artitet.
Speaker 6: A little bit. They may not say, but behind it
Speaker 6: their pread, they caught me, what about us? What are
Speaker 6: we're always inviting? Is Europeans, this is Chinese, these America.
Speaker 6: It's not competition all the time, it's complimentary.
Speaker 1: Is it convincing people? When you think about the big
Speaker 1: investors that he's meeting with, are people getting on board?
Speaker 3: Absolutely? We've seen billions of dollars in new investments already
Speaker 3: announced just over the party year and a half.
Speaker 1: And Matthew, you and our colleague Tonga MITIMINGI have a
Speaker 1: really fascinating story out right now on Bloomberg about how
Speaker 1: some of Silicon Valley's biggest investors actually took a trip
Speaker 1: to Zambia to talk about copper and to meet about copper.
Speaker 1: Can you take us inside the meeting and what you
Speaker 1: know about how exactly it happened?
Speaker 3: Yeah, it was really fascinating to watch, as you say,
Speaker 3: some of Silicon Valley's biggest investors, companies that are more
Speaker 3: associated with investing in things like Airbnb or Meta and
Speaker 3: those sorts of businesses. We had Anderson Horowitz, Bond Capital,
Speaker 3: the July Fund, and even t row Price sitting in
Speaker 3: Zambia's presidency discussing with President Hakee in the Hichilemma their
Speaker 3: eagerness to invest in a new copper mind.
Speaker 1: Yeah, and what does that mean going forward for copper production?
Speaker 1: I mean, are we going to continue to see Zambia
Speaker 1: and the DRC sort of tossling for this number one
Speaker 1: spot and billions and billions more being poured into to
Speaker 1: these countries or what's your expectation, Matt.
Speaker 3: Definitely, the expectation is that Zambi's copper production is going
Speaker 3: to see some significant increases in the next few years.
Speaker 3: Whether or not the government manages to get anywhere close
Speaker 3: to its very ambitious target of three million metric tons
Speaker 3: early in the next decade. I know a lot of
Speaker 3: people are very skeptical that that will happen, but I
Speaker 3: think it's fair to say that a lot of the
Speaker 3: world's ukopper supply is certainly going to be coming from
Speaker 3: both Zambia and Congo.
Speaker 1: Stick with us. After the break, we'll join William Close
Speaker 1: in the DRC, the second largest producer of copper in
Speaker 1: the world. We'll be right back. Thank you, Welcome back.
Speaker 1: Just before the break, we were talking about the ambition
Speaker 1: of Zambia, but the country is facing another giant. As
Speaker 1: Matt was just explaining, the DRC, the second largest producer
Speaker 1: in the world. Bloomberg Mining and Metals reporter William Clothes
Speaker 1: is actually there right now. So William, you're in the
Speaker 1: DRC at the moment, attending a mining conference. As luck
Speaker 1: would have it, tell us a bit more about the
Speaker 1: ambitions of the country, especially when it comes to copper.
Speaker 4: Congo has ambitions to be one of the largest producers
Speaker 4: of copper in the world and has made really major
Speaker 4: strides in the last couple of years. When I came
Speaker 4: to this conference for the first time in I think
Speaker 4: twenty seventeen, Congo produced just over one million tons of
Speaker 4: the metal. Last year it was almost three times that
Speaker 4: amount at around two point eight million tons. Now that's
Speaker 4: a huge increase in a relatively short period of time,
Speaker 4: which has lifted Congo above Peru as the world's second
Speaker 4: biggest producer of copper now. This shift has happened at
Speaker 4: the time when the world is gearing up for greater
Speaker 4: demand for copper on the back of the energy transition
Speaker 4: and is anticipating shortages of the metal in the not
Speaker 4: too distant future. All this copper is being dragged out
Speaker 4: of the ground. Got dragged out of the Congolese soil
Speaker 4: by numerous Chinese companies, including two very large mines controlled
Speaker 4: by Seamock Group, as well as some Western firms such
Speaker 4: as Glencore and Ivanhoe Mines. At a conference, I spoke
Speaker 4: to Phil Braun of Rock Metals about how important copper
Speaker 4: is right now and will be in the future.
Speaker 5: With the electrification of the world and the green initiative,
Speaker 5: the demand of copper is going to continue to outstrip
Speaker 5: the supply. And coupled with what the Congo has, with
Speaker 5: the opportunity to provide that copper to the world, and
Speaker 5: the opportunity that the US and the Western world has
Speaker 5: to get in here and produce ethically sourced copper, it's
Speaker 5: a phenomenal opportunity.
Speaker 1: So William, the DRC is the second biggest producer of
Speaker 1: copper in the world, and yet, as we see across
Speaker 1: much of the continent, the population doesn't actually reap the
Speaker 1: benefits from the industry. How do you explain this disparity
Speaker 1: and where where are the revenues then going well?
Speaker 4: On the one hand, Congo's economy is growing fast GDP
Speaker 4: rows eight point three percent in twenty twenty three, and
Speaker 4: the copper boom is contributing to that improvement. The mining
Speaker 4: companies would also say that they've been paying higher taxes
Speaker 4: since twenty nineteen, when legislation considered quite generous by global standards,
Speaker 4: was rewritten. But on the other hand, Congo remains one
Speaker 4: of the world's poorest countries, and there's not much sign
Speaker 4: of these mining riches trickling down to the population of
Speaker 4: one hundred million people, even in the copper rich southeast
Speaker 4: of Congo. A decent demonstration of this is that one
Speaker 4: can drive the road for four hundred kilometers from the
Speaker 4: mining hub of Kolwesi to the Zambian border, a stretch
Speaker 4: of road that is lined with some of the richest
Speaker 4: mines on the planet, and that transports out of the
Speaker 4: country millions and millions of tons of metals that are
Speaker 4: so coveted by the rest of the world, and yet
Speaker 4: it's all too visible that the communities you see along
Speaker 4: the way are seeing very few of the fruits of
Speaker 4: that trade.
Speaker 1: And William, what's the likelihood that this could actually be
Speaker 1: a long term boost for the region. How long could
Speaker 1: this copper boom actually last?
Speaker 4: So there's a need to be clear eyed that both
Speaker 4: countries will need to do a lot more than just
Speaker 4: export more and more metal to a world that's increasingly
Speaker 4: hungry for it. But investment banks, hedge fund managers and
Speaker 4: the like are putting increasingly bullish predictions out there about
Speaker 4: how high the copper price will go as investment in
Speaker 4: supply fails to keep pace with increased demands. If those
Speaker 4: copper prices become reality, and if Congo keeps up its
Speaker 4: current performance, and if Zambia can add production, the treasuries
Speaker 4: of both countries could look forward to healthy boosts.
Speaker 1: And our thanks to Matthew Hill and William Close for
Speaker 1: their reporting and for joining us. Today, copper prices have
Speaker 1: pulled back slightly from their record highs, but the bullish
Speaker 1: sentiment still exists now. Only time will tell how Zambia
Speaker 1: and the DRC's competition and potential cooperation factors into the
Speaker 1: moves by the industrial metal, especially as they continue tussling
Speaker 1: for the title of the world's top copper producer. This
Speaker 1: program was produced by Adrian Bradley and Leone Weadrago. You
Speaker 1: can hear more stories like this one on the Next
Speaker 1: Africa podcast, available every week wherever you usually get your podcast.
Speaker 1: I'm Jennifer Zabasaja. Thank you so much for listening.