One South African company losing much more money than it makes by selling its products

It costs South African junior miner Copper 360 more money to produce copper than it can sell it for, resulting in the company posting significant operating losses. 

Copper 360 has posted operating losses totalling nearly R800 million since the 2023 financial year, with the miner struggling to profitably extract copper. 

With the miner having no control over the copper price, the only lever it can pull is making its operations more efficient to reduce the cost of producing the metal. 

This is proving challenging, with the company’s operating loss widening substantially over the past four years despite an improvement in its most recent results. 

In its full-year annual financial statements released recently, Copper 360 posted an operating loss of R213.3 million for the 2026 financial year.

Operating profit measures how much money a business makes solely from its core operations and strips out the cost of making the product and overheads, such as rent, salaries, and marketing. 

This is opposed to net profit, which is the final figure on an income statement that tells investors the amount of money left over for shareholders after every single expense has been paid, including interest on debt, legal fees, taxes, and sales. 

While Copper 360’s operating loss in the 2026 financial year is an improvement of 42% from 2025, it still shows the company cannot profitably produce the raw material it sells. 

In effect, every time Copper 360 extracts copper and sells it, the company loses money. 

The company attributed the decline in its operating loss to the absence of impairments. In 2025, Copper 360 took a R113 million impairment loss when a major plant was placed on care and maintenance. 

Copper 360 also initiated a substantial strategic restructuring program just before the end of its 2026 financial year, with the associated costs contributing to its operating loss. 

This restructuring program aims to make the company more efficient and align its cost base with production requirements.

Copper 360 said it plans to implement stricter cost controls, improve operational discipline, and cut jobs to reduce its cost base. 

This will ultimately result in a simplified operating model around copper concentrate production, with Copper 360 suspending its cathode production in the second half of the 2026 financial year. 

The company has also outsourced specialist functions to contractors and refined its mining strategy to make extraction more efficient. 

In December 2025, Copper 360 also completed a recapitalisation process, with the additional capital being used to repurchase and cancel legacy royalty and commission agreements. 

The company’s operating losses over the past four financial years can be seen in the graph below. 

Making copper profitable

Copper 360 has the stated ambition of reviving one of South Africa’s oldest mining regions in the Northern Cape, with copper deposits being documented in the region since 1685. 

The area where Copper 360 operates today became one of the richest copper-producing areas in the world in the 20th century. Global giants flocked to the Northern Cape to extract the metal, which is vital for conducting electricity. 

However, in the early 2000s, low commodity prices and the increasing cost of extraction after decades of mining resulted in companies abandoning the Northern Cape for richer deposits elsewhere. 

Copper 360 was formed out of a merger between two junior miners that focused on extracting copper from the vast surface waste dumps left by historic mining operations. 

Using modern technology, the companies believed they could extract copper efficiently from these dumps and greatly reduce the cost of future mining endeavours. 

In late 2024, Copper 360 transitioned from just focusing on processing surface waste to becoming an active underground miner. 

The company officially returned to structured underground copper mining in early 2025, with it being the first time such activity took place in the area in decades. 

Today, Copper 360 holds rights to mine on over 19,000 hectares that contain 12 historical mines and over 60 exploration targets. 

Despite this progress, the company is still far from profitable, with it having to shift its approach to scale back its expansion plans. 

To become profitable, the company has pivoted away from processing dumps into copper cathodes to focus on producing copper concentrate. 

It said that to make the production of cathodes profitable, the company would have to invest significant capital to expand the plant.

Copper 360 has also focused on quality over volume after it tried to mitigate losses by pushing higher volumes of easily accessible material. 

This negatively impacted margins and pushed the company to process higher-grade underground ore, which is more lucrative. 

However, this does require some more capital investment to access higher-grade ore underground at its mines. These pivots are expected to result in a more simplified, focused company in the coming years.