The government of the Democratic Republic of Congo (DRC) has opposed Chemaf SA’s plan to sell its copper and cobalt mines to China’s Norin Mining, according to a document reviewed by Reuters.
In June, Chemaf, a long-time partner of commodities trader Trafigura, announced its agreement to sell its mining operations in the DRC to a subsidiary of China North Industries Corp (Norinco), a state-backed defense and industrial giant.
The sale was driven by financial difficulties that had delayed the expansion of Chemaf’s Etoile and Mutoshi projects amid falling cobalt prices.
However, DRC’s Mines Minister, Kizito Pakabomba, has stated that the proposed deal violates lease agreements between Chemaf and the state miner Gecamines.
The council of ministers adopted the Ministry of Mines’ recommendation to halt the transaction, citing a breach of contract.
“Given the clear violation of the terms of the farm-out contract between Gecamines and Chemaf, it was recommended that the current transaction be stopped following Gecamines’ opposition,” the council’s minutes noted.
A spokesperson for Chemaf indicated that the company would continue discussions with DRC authorities to move the transaction forward.
Gecamines, which holds the mineral rights to Chemaf’s mines, has also expressed opposition to the deal with Norin Mining.
China, through its state-backed mining companies, has become the largest investor in the DRC as it seeks to secure copper and cobalt resources for its rapidly growing electric vehicle industry.
Norinco already operates the Comica and Lamikal copper and cobalt mines in the DRC, the world’s top cobalt producer.
