TerraNova operates at the intersection of two attractive markets: a structurally tightening global copper market, and a diversified industrial-minerals franchise led by vermiculite. This section sets out the demand and supply dynamics, price outlook and South African context that frame the investment.

The global copper market

Copper is the metal of electrification. It carries current in grids, motors, chargers, renewables and data centres, and there is no economic substitute at scale for most of these uses. Demand is being driven simultaneously by grid and power infrastructure, electric vehicles (which use several times the copper of an internal-combustion vehicle), solar and wind generation, and, increasingly, the electrical build-out for AI data centres. On the supply side, the industry faces declining grades at ageing mines, a scarcity of large new discoveries, lengthening permitting timelines and a decade of under-investment. The International Energy Agency projects that, on current trends, copper supply could fall roughly 30% short of demand by 2035.

This supply-demand tension is visible in the price. The LME copper price reached record territory above US$14,000/tonne in early 2026 and has traded around US$13,000, with consensus forecasts clustering near US$12,000/tonne for the medium term and some houses projecting US$15,000/tonne by 2035. The plan adopts a deliberately mid-range base case of US$12,000/tonne, below recent spot, and stress-tests a full band from US$9,000 to US$15,000/tonne.

The supply-demand balance

The structural case rests on a widening gap between demand and mine supply. Refined copper demand is projected to grow steadily through the decade on electrification, while mine supply struggles to keep pace: existing mines face declining grades, few large greenfield projects have been sanctioned, and lead times from discovery to production routinely exceed a decade. The result is a market that consensus analysts expect to move into sustained deficit, supporting prices well above the marginal cost of the highest-cost producers.

For a new producer, timing matters as much as cost. TerraNova’s five-year build brings incremental refined copper to market precisely as the deficit is expected to deepen, an advantageous window that supports both realised prices and offtake demand. The risk, conversely, is a demand shock (a sharp global slowdown) or a supply surprise (rapid new capacity or substitution) that closes the gap; both are captured in the downside copper-price scenario.

Market sizing — TAM, SAM, SOM

Copper is a multi-hundred-billion-dollar global market; the relevant question for TerraNova is the addressable slice it can realistically serve. The framing below sizes the opportunity from the total market down to the Group’s obtainable share.

At ~75,000 tonnes of refined copper, TerraNova would represent a small fraction of global supply, a deliberate position, since it means the Group is a price-taker whose success depends on cost and reliability rather than on moving the market. In vermiculite, by contrast, the district’s scale gives a genuinely material global share, conferring pricing power in that niche.

Price formation and the cost-support floor

Copper prices are set at the margin: the price gravitates toward the cost of the highest-cost producer needed to balance the market. As the deficit widens, that marginal producer sits progressively higher on the cost curve, lifting the price floor, and rewarding low-cost producers disproportionately, since their margin is the gap between the price and their own (much lower) cost. This is why cost position, not price forecasting, is the durable source of mining returns. TerraNova’s lower-quartile AISC means that even a price that forces marginal mines to curtail leaves the Group comfortably cash-generative. The base-case US$12,000/tonne assumption is set below spot precisely so that the investment case does not depend on prices rising; any strengthening from the structural deficit is upside.

The vermiculite and magnetite markets

Vermiculite is a high-value industrial mineral with diverse end-uses: lightweight construction insulation and fireproofing, horticultural and agricultural growing media, and industrial absorbents. Global vermiculite supply is concentrated in a handful of large deposits, of which the Phalaborwa district is among the most significant, giving a producer there structural pricing power and premium export positioning across the USA, Europe, China, India and the Middle East. Magnetite, recovered as a co-product, serves iron-ore and dense-medium-separation markets. Neither mineral is correlated to the copper cycle, so both provide genuine revenue diversification and cash-flow stability.

South African mining context

South Africa is a mature, well-regulated mining jurisdiction with deep technical skills, established infrastructure and a supportive policy stance toward local beneficiation of strategic minerals. The Mineral and Petroleum Resources Development Act governs mineral rights, and the Mineral and Petroleum Resources Royalty Act levies a royalty on mineral sales, at a lower rate for refined minerals than unrefined, directly rewarding TerraNova’s beneficiation strategy. The country’s macro backdrop in 2026, a repo rate of 7.0% (prime 10.5%), inflation near the mid-point of the 3–6% target band, and a gradually stabilising electricity supply supplemented by private renewable generation, is broadly constructive for a capital-intensive, export-earning miner. The principal domestic risks are logistics reliability (rail and port) and electricity, both of which the plan addresses through owned logistics and renewable self-generation.