WEBVTT - Why African Nations Are Betting On A Copper Coated Future 0:00:02.440 --> 0:00:08.520 Bloomberg Audio Studios, podcasts, radio news. It may not have 0:00:08.600 --> 0:00:11.640 the cachet of gold and silver, but a less shiny, 0:00:12.000 --> 0:00:15.200 though perhaps even more important metal is the focus of 0:00:15.280 --> 0:00:18.680 many mining companies across Central and Southern Africa. 0:00:19.280 --> 0:00:23.439 By twenty forty, an additional nine million tons of copper 0:00:24.000 --> 0:00:26.920 will be required each year to keep pace with the 0:00:26.920 --> 0:00:32.400 global demand. Zambia recognizes our crucial role emitting this demand 0:00:32.440 --> 0:00:35.800 to power this new green African future. 0:00:36.680 --> 0:00:39.199 This will shape the future of our world as we 0:00:39.320 --> 0:00:43.280 drive towards electrification to protect our planet, and Zambia is 0:00:43.320 --> 0:00:45.520 a major driver of this global goal. 0:00:45.920 --> 0:00:49.360 It is the most compelling a trade I have ever 0:00:49.440 --> 0:00:52.720 seen in my thirty plus years of doing this. 0:00:53.240 --> 0:00:55.840 You know, it's the highest conviction trade they've ever seen. 0:00:56.760 --> 0:01:00.680 Today we'll hear why Zambia is betting big on copper 0:01:01.280 --> 0:01:05.080 and how the DRC has become the second largest producer 0:01:05.160 --> 0:01:11.840 in the world. I'm Jennifer's Abasaga and this is the 0:01:11.840 --> 0:01:16.000 Next Africa podcast, bringing you one story each week from 0:01:16.040 --> 0:01:19.240 the continent driving the future of global growth with the 0:01:19.240 --> 0:01:27.959 context only Bloomberg can provide. We may think of copper 0:01:28.040 --> 0:01:31.080 as the metal in our pipes, or even some of 0:01:31.120 --> 0:01:35.240 our smaller coins, but its use in electrical components is 0:01:35.319 --> 0:01:38.839 making it crucial as the world transitions to green energy. 0:01:39.800 --> 0:01:43.080 In a moment, will head to the Democratic Republic of Congo, 0:01:43.640 --> 0:01:46.920 the second largest producer of the metal in the world. 0:01:47.920 --> 0:01:52.240 But first let's focus in on Zambia. The country has 0:01:52.320 --> 0:01:56.000 recently announced a new mine which could become the third 0:01:56.160 --> 0:01:59.640 largest copper mine in the world, and that's just the 0:01:59.680 --> 0:02:03.880 star of their ambitions. Bloomberg's reporter Matthew Hill has been 0:02:04.040 --> 0:02:07.560 following the country's copper plans for quite a while, and 0:02:07.600 --> 0:02:08.800 he's joining us now. 0:02:09.960 --> 0:02:11.919 Hi, Jen, thanks very much for having me on How 0:02:11.919 --> 0:02:13.280 you doing good Good? 0:02:13.560 --> 0:02:16.519 This is a great topic and a very timely topic 0:02:16.600 --> 0:02:20.639 for a lot of reasons. You've covered the mining industry 0:02:20.760 --> 0:02:23.560 across Zambia for quite a while, but we're going to 0:02:23.600 --> 0:02:28.360 focus in on copper today because copper is really the 0:02:28.400 --> 0:02:31.000 hot topic, the hot metal. It seems like that that 0:02:31.200 --> 0:02:34.920 many people are focused on right now, not just in Africa, 0:02:34.960 --> 0:02:41.040 but also internationally. When did it become the metal of concern? 0:02:42.000 --> 0:02:47.280 Certainly when it's price shut up above ten thousand dollars 0:02:47.280 --> 0:02:50.720 a ton this year, a lot more people started paying 0:02:50.720 --> 0:02:53.640 attention to it. Over the past few months, there's been 0:02:53.680 --> 0:02:56.200 a flood of investor money coming into copper. 0:02:56.560 --> 0:02:59.920 It's it can trade whatever investors think it's worth. 0:03:00.600 --> 0:03:03.800 There's very it's very an elastic on the demand and 0:03:03.800 --> 0:03:04.919 supply side to price. 0:03:05.320 --> 0:03:07.800 But already over the past couple of years, there's been 0:03:07.960 --> 0:03:11.480 a growing consensus that for the will to get anywhere 0:03:11.480 --> 0:03:16.760 close to meeting our emissions reductions targets, we're going to 0:03:16.800 --> 0:03:21.360 need a lot more copper. It's the medal of electrification 0:03:21.400 --> 0:03:26.320 and goes into everything from evs to wind turbines and 0:03:26.919 --> 0:03:31.800 power transmission networks. That's the demand side, but on the 0:03:31.840 --> 0:03:36.640 supply side, experts see it's becoming increasingly difficult to build 0:03:36.840 --> 0:03:37.880 new copper minds. 0:03:38.240 --> 0:03:41.520 Earlier, we played this clip from Jeff Curry, who's a 0:03:41.600 --> 0:03:45.080 veteran copper ball He was on our Odd Lots podcast. 0:03:45.680 --> 0:03:50.600 Is the excitement shared from governments from public sector across 0:03:50.640 --> 0:03:51.240 the continent. 0:03:52.120 --> 0:03:56.880 Certainly at least to some extent, When the world's biggest 0:03:56.920 --> 0:04:01.600 mining company, that's PHP, tried to buy its rival Anglo 0:04:01.640 --> 0:04:06.040 American for forty nine billion dollars this year, it wasn't 0:04:06.160 --> 0:04:09.680 the fable the beer's diamond mining business. It was after 0:04:09.720 --> 0:04:13.800 it was Anglo's copper mines that were the main price. 0:04:14.720 --> 0:04:19.000 In the words of Zambia's Finance minister, copper is the 0:04:19.040 --> 0:04:23.520 new oil and countries that have it, like Zambia are 0:04:23.800 --> 0:04:24.920 eager to exploit it. 0:04:25.560 --> 0:04:29.560 Matt when you talk about the minister saying that copper 0:04:29.640 --> 0:04:32.760 is the new oil, how all in is Zambia going 0:04:33.120 --> 0:04:36.279 on their exploitation of the metal. 0:04:36.480 --> 0:04:40.040 That's a really interesting question. For almost a decade, they 0:04:40.080 --> 0:04:44.600 were at loggerheads with the mining industry, trying to get 0:04:44.720 --> 0:04:48.560 more tax revenue out of the mining industry, constantly changing 0:04:48.680 --> 0:04:53.880 the mineral's tax regime and basically trying to squeeze the mines. 0:04:53.960 --> 0:04:56.920 That led to I guess you Gene called it a 0:04:57.040 --> 0:05:02.239 flight from the mining industry. New government under President Haka 0:05:02.320 --> 0:05:07.480 ind Hichilema came into power. They've made a concerted effort 0:05:07.760 --> 0:05:11.240 to man fences with the mining industry. They just want 0:05:11.279 --> 0:05:14.200 to go all out to grow copper production. The government 0:05:14.240 --> 0:05:18.080 is already making some headway. They've got some new investors 0:05:18.080 --> 0:05:22.520 coming in a US company called Cobol Metals, which has 0:05:22.560 --> 0:05:27.000 been carrying out exploration at its site in Zambia's Kopper 0:05:27.040 --> 0:05:31.080 Bold Province, just south of the Congo border since announcing 0:05:31.120 --> 0:05:33.920 its investment in that asset in December twenty twenty two, 0:05:34.640 --> 0:05:39.360 it says it's proving up a hybrid copper deposit and 0:05:39.640 --> 0:05:42.640 it plans to start building the mine there. 0:05:43.360 --> 0:05:46.360 So then, clearly, I mean the way you just spelled 0:05:46.360 --> 0:05:51.799 that out. Clearly President Gilemma sees a long term benefit 0:05:51.880 --> 0:05:55.520 for the economy with these tax breaks that he is 0:05:55.920 --> 0:05:58.400 offering to these companies. What is it that you've heard 0:05:58.480 --> 0:06:02.000 him say about the the transformative effect that it could 0:06:02.000 --> 0:06:03.440 potentially have on the economy. 0:06:03.720 --> 0:06:08.479 Copper production is very much part of his government's economic growth. 0:06:08.480 --> 0:06:15.480 Flats and copper in Zambia is super important. The country 0:06:16.680 --> 0:06:20.320 depends on copper for about seventy five percent of its 0:06:20.800 --> 0:06:28.920 export earnings. Zamya's Africa's first pandemic era, sovereign default on 0:06:29.000 --> 0:06:33.039 its debt and its struggle to get out of default. 0:06:33.080 --> 0:06:36.120 It still is busy with the whole restructuring process, but 0:06:36.880 --> 0:06:39.279 the point being that the money that it will earn 0:06:39.360 --> 0:06:42.880 from growing its copper production is going to be crucial 0:06:43.520 --> 0:06:47.240 for the government to be able to service its newly 0:06:47.360 --> 0:06:48.320 restructured debts. 0:06:51.040 --> 0:06:53.520 When you talk about President h Lemma, he's done a 0:06:53.520 --> 0:06:56.479 lot of global traveling. He's meeting with a lot of 0:06:56.520 --> 0:07:00.799 investors and presidents, and he's at summit's talking about his country. 0:07:00.839 --> 0:07:03.440 He's really public facing when he talks about sort of 0:07:03.440 --> 0:07:04.240 the potential here. 0:07:04.600 --> 0:07:08.000 Every time we're talking about that attracting investments and partnership, 0:07:08.600 --> 0:07:12.000 the local business community, who we love so much, begin 0:07:12.200 --> 0:07:13.880 to artitet. 0:07:13.520 --> 0:07:15.600 A little bit. They may not say, but behind it 0:07:16.120 --> 0:07:19.480 their pread, they caught me, what about us? What are 0:07:19.520 --> 0:07:22.960 we're always inviting? Is Europeans, this is Chinese, these America. 0:07:24.440 --> 0:07:27.680 It's not competition all the time, it's complimentary. 0:07:28.600 --> 0:07:32.560 Is it convincing people? When you think about the big 0:07:32.680 --> 0:07:35.360 investors that he's meeting with, are people getting on board? 0:07:36.680 --> 0:07:41.480 Absolutely? We've seen billions of dollars in new investments already 0:07:41.520 --> 0:07:43.520 announced just over the party year and a half. 0:07:44.320 --> 0:07:47.960 And Matthew, you and our colleague Tonga MITIMINGI have a 0:07:48.040 --> 0:07:51.840 really fascinating story out right now on Bloomberg about how 0:07:51.880 --> 0:07:55.360 some of Silicon Valley's biggest investors actually took a trip 0:07:55.440 --> 0:07:58.800 to Zambia to talk about copper and to meet about copper. 0:07:59.200 --> 0:08:01.600 Can you take us inside the meeting and what you 0:08:01.720 --> 0:08:03.720 know about how exactly it happened? 0:08:04.280 --> 0:08:07.600 Yeah, it was really fascinating to watch, as you say, 0:08:07.720 --> 0:08:12.160 some of Silicon Valley's biggest investors, companies that are more 0:08:12.240 --> 0:08:18.040 associated with investing in things like Airbnb or Meta and 0:08:18.920 --> 0:08:23.360 those sorts of businesses. We had Anderson Horowitz, Bond Capital, 0:08:23.840 --> 0:08:29.040 the July Fund, and even t row Price sitting in 0:08:29.480 --> 0:08:35.040 Zambia's presidency discussing with President Hakee in the Hichilemma their 0:08:35.160 --> 0:08:38.520 eagerness to invest in a new copper mind. 0:08:38.920 --> 0:08:42.640 Yeah, and what does that mean going forward for copper production? 0:08:42.720 --> 0:08:44.800 I mean, are we going to continue to see Zambia 0:08:44.840 --> 0:08:48.040 and the DRC sort of tossling for this number one 0:08:48.080 --> 0:08:51.520 spot and billions and billions more being poured into to 0:08:51.640 --> 0:08:54.120 these countries or what's your expectation, Matt. 0:08:54.600 --> 0:08:59.720 Definitely, the expectation is that Zambi's copper production is going 0:08:59.760 --> 0:09:04.760 to see some significant increases in the next few years. 0:09:05.360 --> 0:09:09.480 Whether or not the government manages to get anywhere close 0:09:09.559 --> 0:09:14.240 to its very ambitious target of three million metric tons 0:09:14.440 --> 0:09:19.079 early in the next decade. I know a lot of 0:09:19.120 --> 0:09:22.240 people are very skeptical that that will happen, but I 0:09:22.320 --> 0:09:24.679 think it's fair to say that a lot of the 0:09:24.760 --> 0:09:29.280 world's ukopper supply is certainly going to be coming from 0:09:30.160 --> 0:09:32.320 both Zambia and Congo. 0:09:33.040 --> 0:09:36.320 Stick with us. After the break, we'll join William Close 0:09:36.400 --> 0:09:40.160 in the DRC, the second largest producer of copper in 0:09:40.240 --> 0:09:46.560 the world. We'll be right back. Thank you, Welcome back. 0:09:47.200 --> 0:09:49.360 Just before the break, we were talking about the ambition 0:09:49.679 --> 0:09:53.160 of Zambia, but the country is facing another giant. As 0:09:53.280 --> 0:09:57.800 Matt was just explaining, the DRC, the second largest producer 0:09:58.040 --> 0:10:03.040 in the world. Bloomberg Mining and Metals reporter William Clothes 0:10:03.400 --> 0:10:06.360 is actually there right now. So William, you're in the 0:10:06.480 --> 0:10:10.199 DRC at the moment, attending a mining conference. As luck 0:10:10.240 --> 0:10:12.559 would have it, tell us a bit more about the 0:10:12.679 --> 0:10:16.360 ambitions of the country, especially when it comes to copper. 0:10:17.040 --> 0:10:19.680 Congo has ambitions to be one of the largest producers 0:10:19.720 --> 0:10:22.079 of copper in the world and has made really major 0:10:22.120 --> 0:10:24.839 strides in the last couple of years. When I came 0:10:24.920 --> 0:10:26.839 to this conference for the first time in I think 0:10:26.960 --> 0:10:31.040 twenty seventeen, Congo produced just over one million tons of 0:10:31.080 --> 0:10:33.959 the metal. Last year it was almost three times that 0:10:34.080 --> 0:10:37.200 amount at around two point eight million tons. Now that's 0:10:37.240 --> 0:10:39.920 a huge increase in a relatively short period of time, 0:10:40.360 --> 0:10:43.440 which has lifted Congo above Peru as the world's second 0:10:43.440 --> 0:10:46.520 biggest producer of copper now. This shift has happened at 0:10:46.559 --> 0:10:48.520 the time when the world is gearing up for greater 0:10:48.640 --> 0:10:51.440 demand for copper on the back of the energy transition 0:10:51.640 --> 0:10:54.079 and is anticipating shortages of the metal in the not 0:10:54.200 --> 0:10:57.800 too distant future. All this copper is being dragged out 0:10:57.840 --> 0:11:00.320 of the ground. Got dragged out of the Congolese soil 0:11:00.880 --> 0:11:05.440 by numerous Chinese companies, including two very large mines controlled 0:11:05.520 --> 0:11:10.080 by Seamock Group, as well as some Western firms such 0:11:10.240 --> 0:11:13.960 as Glencore and Ivanhoe Mines. At a conference, I spoke 0:11:14.000 --> 0:11:17.120 to Phil Braun of Rock Metals about how important copper 0:11:17.240 --> 0:11:19.240 is right now and will be in the future. 0:11:19.800 --> 0:11:22.959 With the electrification of the world and the green initiative, 0:11:23.960 --> 0:11:26.600 the demand of copper is going to continue to outstrip 0:11:26.720 --> 0:11:31.839 the supply. And coupled with what the Congo has, with 0:11:31.960 --> 0:11:35.880 the opportunity to provide that copper to the world, and 0:11:36.000 --> 0:11:38.440 the opportunity that the US and the Western world has 0:11:38.520 --> 0:11:43.360 to get in here and produce ethically sourced copper, it's 0:11:43.400 --> 0:11:44.600 a phenomenal opportunity. 0:11:44.840 --> 0:11:48.120 So William, the DRC is the second biggest producer of 0:11:48.240 --> 0:11:51.440 copper in the world, and yet, as we see across 0:11:51.559 --> 0:11:55.079 much of the continent, the population doesn't actually reap the 0:11:55.160 --> 0:11:59.480 benefits from the industry. How do you explain this disparity 0:11:59.600 --> 0:12:02.560 and where where are the revenues then going well? 0:12:02.720 --> 0:12:06.240 On the one hand, Congo's economy is growing fast GDP 0:12:06.520 --> 0:12:09.439 rows eight point three percent in twenty twenty three, and 0:12:09.520 --> 0:12:13.040 the copper boom is contributing to that improvement. The mining 0:12:13.080 --> 0:12:16.200 companies would also say that they've been paying higher taxes 0:12:16.280 --> 0:12:21.480 since twenty nineteen, when legislation considered quite generous by global standards, 0:12:21.679 --> 0:12:24.720 was rewritten. But on the other hand, Congo remains one 0:12:24.760 --> 0:12:27.920 of the world's poorest countries, and there's not much sign 0:12:28.040 --> 0:12:31.040 of these mining riches trickling down to the population of 0:12:31.080 --> 0:12:34.480 one hundred million people, even in the copper rich southeast 0:12:34.520 --> 0:12:37.959 of Congo. A decent demonstration of this is that one 0:12:38.040 --> 0:12:41.439 can drive the road for four hundred kilometers from the 0:12:41.520 --> 0:12:45.200 mining hub of Kolwesi to the Zambian border, a stretch 0:12:45.280 --> 0:12:47.200 of road that is lined with some of the richest 0:12:47.280 --> 0:12:49.959 mines on the planet, and that transports out of the 0:12:50.080 --> 0:12:53.400 country millions and millions of tons of metals that are 0:12:53.440 --> 0:12:56.320 so coveted by the rest of the world, and yet 0:12:56.679 --> 0:12:59.520 it's all too visible that the communities you see along 0:12:59.559 --> 0:13:02.439 the way are seeing very few of the fruits of 0:13:02.520 --> 0:13:03.000 that trade. 0:13:03.800 --> 0:13:06.839 And William, what's the likelihood that this could actually be 0:13:06.960 --> 0:13:10.320 a long term boost for the region. How long could 0:13:10.360 --> 0:13:12.319 this copper boom actually last? 0:13:13.240 --> 0:13:15.720 So there's a need to be clear eyed that both 0:13:15.840 --> 0:13:17.839 countries will need to do a lot more than just 0:13:17.960 --> 0:13:20.839 export more and more metal to a world that's increasingly 0:13:20.960 --> 0:13:24.640 hungry for it. But investment banks, hedge fund managers and 0:13:24.720 --> 0:13:28.760 the like are putting increasingly bullish predictions out there about 0:13:28.800 --> 0:13:32.199 how high the copper price will go as investment in 0:13:32.320 --> 0:13:35.840 supply fails to keep pace with increased demands. If those 0:13:35.960 --> 0:13:39.439 copper prices become reality, and if Congo keeps up its 0:13:39.480 --> 0:13:43.480 current performance, and if Zambia can add production, the treasuries 0:13:43.559 --> 0:13:46.920 of both countries could look forward to healthy boosts. 0:13:50.600 --> 0:13:53.760 And our thanks to Matthew Hill and William Close for 0:13:54.000 --> 0:13:57.360 their reporting and for joining us. Today, copper prices have 0:13:57.640 --> 0:14:01.480 pulled back slightly from their record highs, but the bullish 0:14:01.520 --> 0:14:05.760 sentiment still exists now. Only time will tell how Zambia 0:14:05.880 --> 0:14:11.120 and the DRC's competition and potential cooperation factors into the 0:14:11.200 --> 0:14:15.640 moves by the industrial metal, especially as they continue tussling 0:14:15.800 --> 0:14:20.800 for the title of the world's top copper producer. This 0:14:20.960 --> 0:14:25.600 program was produced by Adrian Bradley and Leone Weadrago. You 0:14:25.640 --> 0:14:28.080 can hear more stories like this one on the Next 0:14:28.200 --> 0:14:32.880 Africa podcast, available every week wherever you usually get your podcast. 0:14:33.680 --> 0:14:36.560 I'm Jennifer Zabasaja. Thank you so much for listening.