Gecamines has submitted a bid for Chemaf’s cobalt and copper assets after the DRC government opposed Chemaf’s sale to Norin Mining, citing lease agreement violations. Chemaf, facing financial difficulties, is still pursuing the deal with Norin, which it believes will help it meet its creditor obligations.
Gecamines, the state-owned mining company of the Democratic Republic of Congo (DRC), has placed a bid for the cobalt and copper assets belonging to Chemaf Resources (CRL), as reported by Bloomberg News. This action follows the DRC government’s objection to Chemaf’s proposed sale of its mining assets to China’s Norin Mining, which it deems a violation of existing lease agreements between Gecamines and Chemaf. Norin Mining is a subsidiary of the state-owned China North Industries Group (Norinco). In June 2024, Chemaf, which has established a partnership with commodities trader Trafigura, finalized its agreement to sell mining assets in the DRC to Norinco. Despite having sought a buyer for approximately nine months, Chemaf is endeavoring to finalize this transaction even amid significant governmental and Gecamines’ opposition. According to insiders, Gecamines is actively pursuing the acquisition of Chemaf’s assets, although specific details regarding the bid remain unspecified. The Congolese government holds a 5% interest in Chemaf, and the latter initiated the sale due to ongoing financial challenges, which have impeded the advancement of its Etoile and Mutoshi projects during a period of declining cobalt prices. Chemaf is optimistic that the acquisition by Norin would facilitate the completion of stalled projects and enable it to meet obligations towards its creditors. In an email correspondence with the news agency, a spokesperson from Chemaf remarked that the company “remains committed to completing the proposed transaction with Norin Mining, which will enable it to address its overdue loans and trade creditors while securing employment for its local Congolese workforce.” Furthermore, Chemaf possesses other undeveloped copper and cobalt licenses within the DRC and reported approximately $690 million in debt as of September 2023.
The Democratic Republic of Congo is rich in natural resources, particularly cobalt and copper, making it a focal point for global mining interests. Chemaf Resources has been in a precarious financial situation, which has compelled it to seek buyers for its valuable mining assets. The state’s involvement, particularly through Gecamines, emphasizes the government’s intent to control valuable mineral resources and ensure that any transactions respect existing agreements and contribute to local economic stability. The opposition to the sale to Norin Mining underscores the complexities inherent in international mining agreements and the strategic interests of both domestic and foreign investors.
In summary, Gecamines has positioned itself as a strong contender for Chemaf Resources’ cobalt and copper assets amid ongoing governmental opposition to Chemaf’s proposed sale to Norin Mining. The financial struggles faced by Chemaf underscore the broader economic pressures within the global cobalt market. This developing situation highlights the intricate balance of local interests in resource management and international mining operations.
Original Source: www.mining-technology.com
