Monsters of Rock: Sandfire wants to be a 500,000tpa copper miner by 2026

The ink is barely dry on Sandfire Resources’ transformational Spanish mine buy.

The US$1.865 billion MATSA Mining Complex purchase from Sandfire (ASX:SFR), is believed to have pitted the company against a number of larger players for Trafigura and Mubadala’s 100,000tpa copper mine in the Iberian peninsula.

Now boss Karl Simich, who took the company from a tiny junior explorer into a leading copper mid-tier off the back of the DeGrussa copper discovery in WA a decade or so ago, is setting his sights higher.

Simich says the Perth miner and explorer aspires to become a 500,000tpa copper miner in five years, something that would propel it towards the ranks of the world’s majors.

“We wanted to have 150,000 tons of copper inside five years, we will be that off the back of this transaction, and our aspiration from where we are, which will soon be 150,000 to 200,000 tons of copper production, is to then in the next five years move to a level of about 500,000 of annual production of copper equivalent,” he told delegates at the Boom in a Room conference in Perth today.

Sandfire, which made a record ~$800 million in revenue in FY2021, is planning to wrap up production at its DeGrussa copper-gold mine in WA’s Doolgunna region in late 2022 and open the smaller Motheo copper mine in Botswana in 2023.

“Being in the copper space, effectively or base metals you can’t sit here in West Perth, or Perth, and expect to find another high-grade discovery,” Simich said.

“You need to go out and find them, you need to go out and buy them, and so you need to get off your backside go do it.

“And that’s what we’re doing.”

Copper back to boomtime levels

Copper was back above US$10,000/t today, hitting two month highs despite concerns about Chinese economic growth.

It is one of the metals expected to field a major spike in demand as electrification and decarbonisation of power become the dominant narratives in infrastructure development around the world.

Sandfire and OZ Minerals (ASX:OZL), the two most prominent pure play copper stocks on the ASX rode the wave today.

$2 billion capped Sandfire was up almost 7%, while $8 billion capped OZ, which owns the Prominent Hill and Carrapateena mines in South Australia was the top large cap with a 5.17% uplift.

29Metals (ASX:29M) which owns the Capricorn copper mine in Queensland and Golden Grove mine in WA was up ~3%.

The Materials index rose 1.31% on a generally positive day.

Iron ore miners BHP (ASX:BHP) (2.8% up) and FMG (ASX:FMG) (1.96% up) got a bump, probably for not being Rio Tinto (ASX:RIO), which sunk 0.91% on a disastrous quarterly production report that included downgrades to iron ore and copper guidance.

CEO Jakub Stausholm said “we recognise the opportunity to raise our performance” — the sort of meaningless platitude we’ve grown accustomed to in Rio’s recent history.