KoBold Metals Unveils Enormous Copper Discovery in Africa

KoBold Metals, a Silicon Valley-based firm, has made headlines by declaring a substantial copper deposit discovery in Zambia, a major copper-producing country in Africa. The company, known for employing artificial intelligence (AI) to explore the Earth's crust for metals and critical minerals crucial for the energy transition, is backed by prominent figures such as Jeff Bezos, Bill Gates, Richard Branson, and Ray Dalio.

The breakthrough discovery has occurred at the Mingomba project in northern Zambia, situated near the border with the Democratic Republic of Congo. Notably, the Kamoa-Kakula copper mine, one of the largest globally, lies on the other side of the border. A spokesperson from KoBold Metals revealed to CNBC that the Mingomba project is poised to become one of the world's largest high-grade copper mines, marking a timely and significant find as copper plays a crucial role in the energy transition.

The AI-driven approach employed by KoBold Metals has proven fruitful in identifying and confirming the potential of the Mingomba project. Last year, the company initiated plans for the project, and in September, it was reported that KoBold aimed to invest $150 million to expedite exploration work. The urgency was driven by the pressing demand for increased copper production to support the energy transition.

The mining industry and energy analysts have been sounding warnings about a potential copper shortage that could impede the planned acceleration of the energy transition. Despite regulatory efforts and attempts to phase out competing technologies, the global output of copper has faced challenges. One significant hurdle is the substantial upfront investment required for new mines, and investors are cautious, seeking assurance of a viable return on investment, which current copper prices may not justify.

The copper market currently grapples with a paradox wherein the anticipation of a looming shortage clashes with economic indicators that influence copper prices. While the demand for copper is expected to surge with the proliferation of electric vehicles (EVs) and renewable energy projects, economic indicators are not aligning with these optimistic visions. The discrepancy between forecasts and actual EV sales, coupled with EV manufacturers scaling back production plans due to weakening demand, contributes to the cautious stance of miners.

KoBold Metals is addressing the financing challenge by utilizing private capital for the exploration and development work in Zambia. The company has hinted at potential partnerships to share the estimated $2 billion financial burden required to transform the Mingomba discovery into a productive mine. KoBold Metals anticipates this transformation to take approximately a decade, underscoring the time-intensive nature of developing copper mines compared to the more rapid pace of shale wells.