Harmony Gold’s $US1.03 billion ($1.6 billion) acquisition of MAC Copper has set the Australian mining industry abuzz. But how will it shape and impact the country’s copper sector?
MAC officially acquired the CSA copper mine near Cobar, New South Wales from Glencore in June 2023 for $US1.1 billion. The deal saw Glencore offtake 100 per cent of the copper concentrate produced and MAC assume ownership and the full operation of CSA. Glencore also retained a 1.5 per cent life of mine net smelter return royalty.
Not long after, MAC became the largest ASX mining listing in five years, demonstrating its significance in the Australian copper sector.
By acquiring MAC, Harmony will de-risk itself by diversifying into a premium, established asset in a known Tier 1 copper jurisdiction.
The South African company acquired the Eva copper project near Cloncurry, Queensland in October 2022, marking its first entry into the copper market.
Eva is an iron oxide copper-gold resource that Harmony believes is poised to become the largest copper mine in north-west Queensland. The Queensland Government’s newly formed Resources Cabinet Committee is aiding the delivery of any outstanding approvals or information required to move the project toward construction.
If its acquisition of MAC is successful, Harmony will gain ownership over CSA, which is considered one of Australia’s highest grade copper mines. It produces 40,000 tonnes (t) of copper per annum on average, employs approximately 500 people, and has an mine lief greater than 12 years.
Other benefits of the acquisition include the driving of margin expansion, delivering immediate cash flows, a robust balance sheet with strong cash flow generation, and significant copper exploration potential and upside.
The scheme will also see Harmony take over a range of MAC’s contracts, including the silver and copper purchase agreements with Osisko and the royalty agreement with Glencore.
“The acquisition of the CSA copper mine in Australia is significant as it introduces a high-quality, established underground producing copper asset to the Harmony portfolio,” Harmony chief executive officer (CEO) Beyers Nel said.
“CSA is one of the highest-grade copper mines in Australia, producing (approximately) 41,000t of copper in 2024. The operation is a logical fit with the portfolio given it meets Harmony’s core investment criteria, including increasing free cash flow generation while improving margins at long-term expected commodity prices.
“We believe that Harmony is well positioned to leverage its expertise in underground mining to further enhance operations. Furthermore, the transaction represents a significant step forward in transforming Harmony into an increasingly de-risked, higher-quality, global gold and copper producer through disciplined and effective capital allocation.”
Harmony intends to fund the transaction via a $US1.25 billion bridge facility in combination with existing cash reserves.
The MAC board has unanimously recommended its shareholders vote in favour of the scheme, in the absence of a superior proposal, as it is subject to limited conditionality, providing MAC shareholders with greater certainty.
“Having carefully considered the merits of the transaction, the MAC board has unanimously concluded that the scheme is in the best interests of MAC shareholders,” MAC CEO Mick McMullen said.
“The board believes the transaction provides MAC shareholders with a compelling opportunity to de-risk their investment and realise an attractive cash value of $US12.25 per MAC share, which is also a premium to MAC’s recent historical trading levels.
“The transaction also presents a great outcome for other stakeholders in the CSA copper mine, who will benefit from the stewardship of a well-respected and high-quality operator in Harmony, who is looking to build a copper business in Australia through the acquisition of MAC and the development of their Eva copper project in Queensland.
“The board is confident that Harmony will deliver positive outcomes not only at the mine, but also for the wider Cobar community. The transaction is a strong endorsement of the hard work and achievements of the MAC team over the last approximately two years.
“The board is extremely proud of the team’s significant efforts implementing numerous operational improvements at the CSA copper mine, simplifying and deleveraging the balance sheet and transforming the asset into the high-quality operation it is today. Alongside my fellow directors, I have no hesitation in supporting the transaction.”
If all the subjected conditions are met, the scheme is expected to be finalised by the December 2025 quarter.
The Harmony–MAC transaction comes as global copper demand is accelerating sharply as clean energy infrastructure expands, but supply is struggling to keep pace.
The International Energy Agency’s ‘Global Critical Minerals Outlook 2025’ report forecasted a 30 per cent supply deficit by 2035 based on the existing pipeline of copper mining projects.
By having both CSA and Eva under its belt, Harmony is poised to bridge the gap between copper supply and copper demand.
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