Gecamines has submitted a bid to acquire Chemaf Resources’ cobalt and copper assets after the DRC government opposed Chemaf’s sale to Norin Mining, citing violations of lease agreements. Chemaf, facing financial difficulties, continues to pursue the sale to Norin to address its debts while also engaging with Gecamines amidst ongoing regulatory challenges in the DRC mining sector.
Gecamines, the state-owned mining company of the Democratic Republic of the Congo (DRC), has expressed its intent to acquire the cobalt and copper assets of Chemaf Resources (CRL), as reported by Bloomberg News. This development arises in the wake of the DRC government’s opposition to Chemaf’s proposed sale of its mining operations to Norin Mining, a subsidiary of the state-owned China North Industries Corporation (Norinco). Officials argue that such a transaction would contravene existing lease agreements established between Gecamines and Chemaf. In June 2024, Chemaf, which has partnered with commodities trader Trafigura, had initially reached an agreement to divest its mining assets in the DRC to Norinco. Despite being under pressure from the Congolese government and Gecamines, Chemaf continues to pursue the closure of this agreement, which it initiated after encountering financial challenges that impeded the progression of its Etoile and Mutoshi projects due to declining cobalt prices. Furthermore, the Congolese government maintains a 5% ownership stake in Chemaf. It is known that Chemaf’s outstanding financial obligations amount to approximately $690 million as of September 2023. A spokesperson for the company stated that completing the transaction with Norin is vital to addressing its overdue debts and supporting the livelihoods of the local workforce. As Gecamines stands poised to gain control over Chemaf’s assets, greater detail concerning their bid remains undisclosed, indicating a potentially significant shift in the mining sector dynamics in the region.
The Democratic Republic of the Congo possesses vast mineral resources, notably cobalt and copper, which are critical for global supply chains, particularly in the electronics and electric vehicle industries. Gecamines, the state-owned enterprise, is tasked with managing these resources, but it has often faced financial and operational challenges. In contrast, Chemaf Resources, a significant miner in the region, has sought to sell its assets amidst financial difficulties exacerbated by falling cobalt prices. The ongoing negotiations between Chemaf and potential buyers highlight the tensions and complexities of resource management in the DRC, a nation rich in minerals yet plagued by regulatory challenges and financial instability.
In summary, Gecamines has formulated a bid for Chemaf’s cobalt and copper mining assets in response to the DRC government’s assertion that Chemaf’s previous sale to Norin Mining is not permissible under existing agreements. The financial pressures and operational challenges faced by Chemaf have led it to seek a buyer, with current stakeholders aiming to safeguard employment and resolve financial obligations. As the situation evolves, Gecamines’ ambitions to expand its portfolio may reshape the competitive landscape of the Congolese mining sector.
Original Source: www.mining-technology.com
