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