The Democratic Republic of Congo’s state miner, Gecamines, has asserted that any acquisition of cobalt producer Chemaf Resources must receive its approval if the new owner intends to take over a critical mining permit.
Chemaf announced its sale in September, with the process reportedly nearing completion as of March. However, the winning bid has yet to be disclosed.
The company, backed by Trafigura Group, aims to develop one of Congo’s largest copper-cobalt mines and processing facilities on a permit leased from state-owned Gecamines.
In an interview, Gecamines Chairman Guy-Robert Lukama stated that any attempt to change ownership of the lease without Gecamines’ prior consent, especially concerning the Mutoshi project area, would render the transaction “void.” He emphasized, “If they sell, we will withdraw the lease agreement.”
Responding to inquiries, Chemaf indicated it has engaged with the highest levels of the Congolese government and has already obtained approval from the mines minister for the proposed transaction. “Following these approvals, we are preparing to seek formal approval from Gecamines SA, our esteemed partner in Mutoshi,” a Chemaf spokesperson affirmed.
Recently appointed Mining Minister Kizito Pakabomba, replacing Antoinette N’Samba Kalambayi, did not respond to requests for comment outside office hours.
Chemaf secured a $600 million loan from Trafigura in late 2022 to finance its expansion plans. However, cost overruns during mine development necessitated additional funding.
Subsequently, Chemaf initiated the sale process, seeking commitments of $250 million to $300 million to complete construction projects.
Established in 2015, the Mutoshi project in Congo’s Lualaba province, where Chemaf plans significant operations, has seen investments totaling approximately $520 million, with completion nearing 80%. Challenges cited include global mining sector inflation, soft cobalt prices, and funding constraints.
While Gecamines has expressed concern over the “non-performing” lease and attempts to contact Chemaf regarding the sale process, Chemaf has not responded.
Lukama indicated that under the circumstances, Gecamines could terminate the 25-year lease agreement.
Trafigura clarified its role as a creditor to Chemaf, affirming it does not manage or influence investment decisions in the company.
The potential withdrawal of the permit by Gecamines may complicate efforts to secure a buyer for the unfinished mining complex at Mutoshi, but it does not affect other licenses held directly by Chemaf.
