Gecamines has bid for Chemaf’s cobalt and copper assets amid the DRC government’s opposition to a sale to China’s Norin Mining. Chemaf, facing financial issues and debt, is seeking to finalize its sale to Norin to fulfill creditor obligations, although Gecamines aims to acquire the assets.
Gecamines, the state-owned mining company of the Democratic Republic of the Congo (DRC), has officially placed a bid for the cobalt and copper assets owned by Chemaf Resources (CRL), according to reports from Bloomberg News. This bid occurs in the context of the DRC government’s opposition to Chemaf’s planned sale of its mining operations to Norin Mining, a subsidiary of the state-backed China North Industries (Norinco), citing potential violations of existing lease agreements between Gecamines and Chemaf. Prior to this development, Chemaf had entered into an agreement in June 2024 with Norinco to sell its mining assets in the DRC. The company, which maintains a partnership with commodities trader Trafigura, has been actively seeking a buyer for nearly nine months. Despite government resistance, Chemaf is attempting to consummate its deal with Norinco. Sources indicate that Gecamines is interested in acquiring Chemaf’s assets, although specific details surrounding this bid remain under wraps. It is noteworthy that the Congolese Government holds a 5% equity stake in Chemaf. Chemaf’s decision to divest its mining assets stems from financial challenges that have hindered its capacity to advance the Etoile and Mutoshi projects amid declining cobalt prices. The management believes that the potential acquisition by Norin would facilitate the resumption of halted projects and allow for the fulfillment of creditor obligations. A spokesperson for Chemaf stated 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 also possesses several undeveloped copper and cobalt licenses in the DRC, and as of September 2023, reported approximately $690 million in debt.
The Democratic Republic of the Congo is rich in mineral resources, particularly cobalt and copper, making it a focal point for mining operations. The state-owned company, Gecamines, holds significant interests in the mining sector, reflecting government efforts to maintain control over critical resources. Chemaf Resources, in collaboration with international partners, has been attempting to navigate financial difficulties exacerbated by fluctuating global commodity prices, which has prompted it to seek a buyer for its assets. The backdrop of governmental pushback against foreign acquisitions underlines the sensitive nature of resource ownership in the DRC.
In summary, Gecamines’ bid for Chemaf’s cobalt and copper assets signals a significant move in the DRC’s ongoing struggle over mineral resource management. This situation reflects the complexities of local governance, international investment, and the challenges faced by mining companies. As Chemaf continues its efforts to finalize its deal with Norin Mining, the outcome will have broader implications for the Congolese economy and its mining sector.
Original Source: www.mining-technology.com
