DRC State Miner Gecamines Requires Approval for Chemaf Resources Acquisition
The Democratic Republic of Congo’s state miner, Gecamines, has asserted that any acquisition of cobalt producer Chemaf Resources Ltd. must receive its approval if the new owner intends to take over a crucial mining permit.
Chemaf, which put itself up for sale in September, stated in March that the process was in its “final stage,” but a winning bid has yet to be announced.
Backed by the Trafigura Group, Chemaf is working to develop one of the largest copper-cobalt mines and processing plants in Congo on a permit leased from Gecamines.
Gecamines Chairman Guy-Robert Lukama emphasized that any ownership transfer involving the Mutoshi project license, without prior approval from Gecamines, would be “void.” He warned, “If they sell, we will withdraw the lease agreement.”
In response, Chemaf stated on Friday that it has been engaging with the highest levels of government in Congo and has already obtained approval from the mines minister for a proposed transaction.
“Following these approvals, we are preparing to seek formal approval from Gecamines SA, our respected partner in Mutoshi,” a Chemaf spokesperson said.
Earlier this week, Kizito Pakabomba was sworn in as Congo’s new mining minister, replacing Antoinette N’Samba Kalambayi. Neither has responded to requests for comment.
In late 2022, Chemaf secured a $600 million loan from Trafigura to fund its expansion, but the mine development exceeded its budget, prompting the company to seek new funding. Consequently, Chemaf offered itself for sale, asking prospective bidders to commit an additional $250 million to $300 million to complete its projects.
Chemaf’s long-standing relationship with Trafigura dates back over 15 years. The company has been planning a large complex at Mutoshi, in Congo’s Lualaba province, since at least 2018. The site is expected to produce 16,000 tons of cobalt and 50,000 tons of copper annually.
Any move by Gecamines to withdraw the permit could complicate the sale process by jeopardizing the unfinished mining complex, though it wouldn’t affect the numerous other licenses Chemaf owns directly.
Trafigura stated that as “one of the creditors to Chemaf,” it is “not managing or influencing decisions on the investment process.”
Gecamines has repeatedly contacted Isle of Man-registered Chemaf since the sale process began but has not received a response, according to Lukama.
The 25-year lease agreement, secured in 2015, is considered “non-performing,” giving Gecamines the right to terminate it, he said.
Chemaf reported on Friday that it has invested about $520 million in developing Mutoshi, which is approximately 80% complete. The company attributed the funding gap to “inflationary pressures across the global mining sector,” a “soft cobalt pricing environment,” and the incomplete loan from Trafigura.
