Gates-backed start-up seeks Zambia copper for green-energy shift

Mining companies have been warning of looming copper deficits, driven by rising demand for the metal in wind and solar farms, high-voltage cables, and electric vehicles

High concentrations of copper in the earth’s crust are becoming increasingly difficult to find. Bloomberg
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A Bill Gates-backed mining start-up has agreed to invest $150 million in a Zambian project that will use artificial intelligence to explore for copper, a metal key to the green-energy transition.

KoBold Metals — which counts Gates’ Breakthrough Energy Ventures and number one miner BHP Group among its shareholders — will use its AI technology to process drilling data and optimise exploration for copper and cobalt at Mingomba.

Located near Zambia’s border with the Democratic Republic of Congo, it’s the world’s highest-grade undeveloped large deposit of copper, according to the company.

Mining companies have been warning of looming copper deficits, driven by rising demand for the metal in wind and solar farms, high voltage cables, and electric vehicles.

That green revolution is spurring competition for scarce resources, with the US playing catch-up after Chinese firms long dominated mining investment in Africa.

“We’ve seen in Zambia and across the region an intense effort by the People’s Republic of China to try to lock up access to a lot of critical minerals,” Mike Gonzales, US ambassador to Zambia, said in an interview. “And so, this investment is really important.”

It’s a rare US private investment in the southern African nation’s mining industry, and a boost for Zambia’s ambitions to more than triple copper production over the next decade. The country is the continent’s number two producer after the Democratic Republic of the Congo.

Mingomba’s average copper grades are about six times higher than those found in Chile, the world’s biggest producer. High concentrations of the metal in the earth’s crust are becoming increasingly difficult to find, and there’s growing interest in a region many big miners had neglected for decades.

“This is a perfect fit for what we do as a technology-guided exploration company,” KoBold President Josh Goldman said, as the firm announced the investment on Wednesday. “We want to get the highest quality resource developed as quickly as possible.”

KoBold is buying into what will be a joint venture with the existing owners of Mingomba, EMR Capital. That private equity company, which operates the neighbouring Lubambe mine, said in 2020 the new deposit could support a mine that would cost about $1 billion to develop and produce as much as 160,000 tonnes of copper a year.

Those estimates — which would make it Zambia’s third-biggest copper mine — are reasonable, though the output may be even higher, according to KoBold. The project has enough copper to produce 100 million electric vehicles, according to Mr Goldman.

Sam Altman, founder of Y Combinator and chief executive of OpenAI, has invested personally in KoBold through his Apollo Projects vehicle. So has T. Rowe Price Group Inc. and Andreessen Horowitz, known for investing in Airbnb Inc., Lyft Inc. and Slack.

KoBold, which raised $192.5 million in February, has hired software engineers from Google, Lyft and Apple.

“None of them would’ve taken a call from a mining company, but they’re like: ‘Oh wait a second,’” said Mr Goldman. “Cool technology and technology that we need to solve a really urgent societal problem. We’re either going to have the metals or we’re not going to have the electric cars.”

Updated: December 17, 2022, 3:30 AM