Gecamines has bid for Chemaf Resources’ mining assets in Congo after government opposition to Chemaf’s sale to Norin Mining. Chemaf is experiencing financial difficulties, seeking to conclude a deal to meet creditor obligations. The DRC government is involved in ensuring compliance with existing agreements.
Gecamines, the state-owned mining company of the Democratic Republic of the Congo (DRC), has officially submitted a bid to acquire the cobalt and copper assets belonging to Chemaf Resources (CRL), according to a report from Bloomberg News. This development arises in the wake of concerns from the DRC government regarding Chemaf’s attempted sale of its mining assets to Norin Mining, a subsidiary of the China North Industries Corporation (Norinco), which the government argues infringes upon existing lease agreements held by Gecamines. In June 2024, Chemaf, which is partnered with the commodities trading firm Trafigura, had reached an agreement to sell its assets in the DRC to Norinco. Despite these efforts, Chemaf has found itself at an impasse as the Congolese government and Gecamines have expressed strong opposition to this transaction. Reports indicate that Gecamines is now pursuing the acquisition of Chemaf’s assets, although additional details regarding this bid remain private. The DRC government maintains a 5% equity stake in Chemaf, which has been facing significant financial difficulties, particularly in advancing its Etoile and Mutoshi projects amidst declining cobalt prices. Chemaf has been actively seeking a buyer for its operations over the past nine months and believes that if the transaction with Norin is finalized, it would facilitate the completion of its stalled projects and help fulfill its obligations to creditors. A spokesperson from Chemaf emphasized the company’s ongoing commitment to resolving its financial challenges and securing employment for its local workforce by stating its dedication to the transaction with Norin Mining, as it aims to address outstanding loans and trade obligations.
The Democratic Republic of the Congo is a key player in the global cobalt market, with companies like Chemaf Resources managing significant assets in this sector. Chemaf has been navigating financial difficulties, primarily due to struggling cobalt prices which have hindered project expansions. The local government is vigilant in protecting its interests and ensuring that mining activities comply with regulatory frameworks, particularly emphasizing existing agreements with state-owned enterprises like Gecamines. Gecamines’ bid for Chemaf’s assets reflects a strategic attempt to consolidate control over the lucrative mining sector amid rising international interest and competition, especially from Chinese companies.
In summary, Gecamines has made a strategic move by bidding for Chemaf Resources’ cobalt and copper assets amidst governmental opposition to Chemaf’s proposed sale to Norin Mining. Chemaf seeks to resolve its financial challenges while the Congolese government aims to enforce existing agreements and maintain oversight of its mining resources. The outcome of this bid could significantly impact Chemaf’s future operations and the broader landscape of the DRC’s mining sector.
Original Source: www.mining-technology.com
