DRC’s Gecamines Offers $1M To Block Chinese Deal with Cobalt Miner Chemaf
November 23rd, 2024
Via Reuters, a report on a contested DRC mining project:
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Chemaf cash crunch worsens as Norinco deal stalls
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US officials say alternative to Norinco must be found, source says
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Gecamines says China’s Norinco will not buy Chemaf assets
The Democratic Republic of Congo’s state miner Gecamines is offering $1 million to buy cobalt and copper assets of indebted mining firm Chemaf to prevent China from increasing its control of critical metals in the country, two sources familiar with the details told Reuters.
Chemaf, a partner of commodities trader Trafigura, agreed to sell its copper and cobalt assets to Chinese defence and industrial giant, China North Industries Corp(CNIGC.UL) , or Norinco in June.
Gecamines, which owns the lease to Chemaf’s mines, whose copper and cobalt are used in electric vehicles and clean energy infrastructure, was asked by Chemaf to approve the sale, but declined.
Gecamines later submitted an unsolicited bid for the Chemaf assets, deepening a standoff that has been complicated by U.S. officials lobbying against China’s grip on the mineral-rich central African Copperbelt.
Chinese companies are major investors in Congo’s mining sector. CMOC Group (603993.SS), opens new tab is now the world’s biggest cobalt miner as it boosts output at Tenke Fungurume Mine it bought from U.S.-based Freeport-McMoRan (FCX.N), opens new tab just four years ago.
Gecamines offered to pay just under $1 million for the mines and processing plant, and wants to conduct an audit of Chemaf’s debts before structuring a payment plan to settle the borrowing, said the sources, who cannot be named because of the sensitivity of the matter.
Chemaf, whose debts have ballooned to $900 million to $1 billion, needs an additional $300 million to expand output and operate profitably, the sources said.
Norinco has offered between $900 million and $1 billion, including settling Chemaf’s debts and outstanding taxes, one of the sources said.
The Chinese miner also pledged to advance Chemaf’s plans to raise copper and cobalt output to about 75,000 metric tons and 25,000 tons, respectively, the source added.
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