(Ecofin Agency) - In June 2024, Chemaf agreed to sell its Étoile and Mutoshi copper and cobalt mines to China’s Norinco for $1.4 billion to pay off $900 million in debt. However, Gécamines, Congo's state-owned mining company, blocked the deal, citing violations of lease agreements signed in 2015.

China's Norinco has dropped its bid to acquire Chemaf’s assets. According to Bloomberg, the decision came after the Congolese government vetoed the transaction. This move has left Chemaf scrambling for alternative solutions to settle its debts.

In June 2024, Chemaf accepted Norinco's $1.4 billion offer to acquire its Étoile and Mutoshi copper and cobalt mines to address its $900 million debt. However, Gécamines, the Congolese state-owned mining company, blocked the deal. 

Gécamines had leased the mining licenses for these assets to Chemaf in 2015 for 25 years and expressed its intent to reclaim them. In November 2024, Gécamines proposed a competing offer of $1 million to Chemaf to regain control of the properties.

Despite Gécamines’ veto, Norinco attempted to salvage the deal. According to Reuters, the Chinese company proposed increasing the Congolese government’s stake in the mines from 5% to 15%. However, this latest development indicates that the Congolese government has not granted the required authorizations to finalize the agreement. 

Consequently, the deal expired on March 22, prompting both companies to abandon their plans. Chemaf informed its creditors about the situation and is now working with Congolese authorities on alternative solutions.

The DRC has been seeking to reduce China’s dominance in its mining sector. The government has been exploring partnerships with countries like Saudi Arabia and the USA, which are negotiating access to strategic minerals in exchange for security support against rebel groups.

The uncertainty surrounding this deal also delays progress on Chemaf’s Mutoshi project, which was expected to produce 50,000 tonnes of copper and 16,000 tonnes of cobalt annually.

This article was initially published in French by Aurel Sèdjro Houenou (intern)

Edited in English by Ola Schad Akinocho