Gécamines Seeks to Block Chemaf Sale to China
The Democratic Republic of Congo’s state mining company, Gécamines, has submitted a $1 million bid to acquire the cobalt and copper assets of financially troubled Chemaf.
This move seeks to prevent further Chinese control of critical metals in the mineral-rich country, according to sources close to the matter.
Chemaf, a partner of global commodities trader Trafigura, had previously agreed to sell its assets to China’s state-owned industrial giant, Norinco, in June 2024. These assets include copper and cobalt mines critical for electric vehicles and clean energy infrastructure.
However, Gécamines, which owns the leases for Chemaf’s mines, rejected the proposed sale to Norinco. Instead, it submitted an unsolicited counteroffer and requested an audit of Chemaf’s substantial debts before finalizing a payment plan.
Norinco’s offer reportedly ranges between $900 million and $1 billion, covering Chemaf’s debts, taxes, and expansion plans to increase output to 75,000 metric tons of copper and 25,000 tons of cobalt annually.
In contrast, Gécamines’ offer of $1 million aims to pave the way for restructuring Chemaf’s debts, which range from $900 million to $1 billion, according to sources.
Gécamines Chairman Robert Lukama confirmed the bid, emphasizing that the Congolese government has already rejected the Norinco deal. “We made a better offer than Norinco, subject to due diligence of the debt,” Lukama stated. He added that the government has informed Chemaf it will not accept Norinco’s transaction.
The U.S. has also expressed concerns over Norinco’s growing influence in Congo, urging the government to block the sale. U.S. officials have been lobbying for alternative buyers and rallying Western companies to consider acquiring Chemaf’s assets.
Chemaf is grappling with severe financial challenges, with its debts skyrocketing and operations hindered by a lack of financing. The company requires an additional $300 million to expand its output and achieve profitability.
Currently, Chemaf is only processing stockpiles from its Etoile mine, as work at the Mutoshi mine remains suspended. The cash crunch has left the company struggling to pay its 3,500 workers, power bills, and security personnel.
In August 2023, Chemaf entered a 24-month creditor protection agreement, which is set to expire next year. While interim financing is an option, creditors are pushing for the Norinco deal to be concluded quickly to recover their investments.
Norinco’s acquisition would further consolidate China’s dominance in Congo’s mining sector, where Chinese companies, such as CMOC Group, already control significant cobalt and copper production.
CMOC is the world’s largest cobalt producer, following its acquisition of the Tenke Fungurume mine from U.S.-based Freeport-McMoRan.
This standoff between Gécamines, Norinco, and other stakeholders underscores the geopolitical and economic stakes surrounding Congo’s vast mineral wealth, as global powers vie for control of critical resources essential for the energy transition.
