Last Friday (March 28), an American company acquired the largest cobalt and copper producer in the Democratic Republic of Congo, successfully preventing the assets from falling into the hands of the long-planned Chinese Communist Party (CCP). This move is seen as a significant victory for the Trump administration in the critical minerals competition between the United States and China.
According to The Wall Street Journal, the American company Virtus Minerals completed the acquisition of Chemaf, the cobalt and copper producer in the Democratic Republic of Congo. The initial investment for this acquisition was $30 million, with a commitment to raise an additional $720 million in investment.
Cobalt metal is widely used in fighter jets, mobile phones, and electric car batteries. Chemaf’s enterprise can produce approximately 5% of global cobalt annually. Virtus stated that all future production will be sold to buyers in the United States or those “aligned with the United States position.”
In terms of financing, Virtus will collaborate with the Indian mining company Lloyds Metals and Energy. They will make an initial investment of $200 million, with an additional $475 million coming from the New York investment firm Orion Resource Partners, and the remaining $75 million from other financing channels.
Officials from the US State Department stated that the US government “fully supports” this acquisition, calling it a “priority project.”
Previously, the CCP had attempted to acquire Chemaf and came close to succeeding. In June 2024, Chemaf agreed to sell to a CCP state-owned military enterprise, a subsidiary of “Norinco” called “Norin Mining,” for $9.2 billion.
Bloomberg reported, citing insider sources, that the deal fell through due to lack of approval from the Congolese government and opposition from the state-owned mining company Gecamines.
US officials had also pressured the Congolese government to block the deal. Republican members of the House Foreign Affairs Committee posted on social media platform X, stating: “The security of critical minerals is national security – do not let the CCP advance an inch!”
After the collapse of the CCP’s acquisition of Norin Mining, Virtus took action and commenced negotiations, leveraging US government support.
In February this year, the Congolese government proactively proposed granting mineral exploration rights to US companies in exchange for Washington’s support for President Félix Tshisekedi, to assist in dealing with armed rebellions within the country.
Senator Kanda Kalambayi from the Democratic Republic of Congo had previously written to US Secretary of State Marco Rubio, highlighting the government’s policy shift under the Tshisekedi administration as a rare opportunity for the US to establish a “direct and ethical supply chain.”
Chemaf currently carries a debt of approximately $1 billion. Virtus has reached an undisclosed agreement with Trafigura, the largest creditor and commodity trading giant. Trafigura had provided $600 million in financing for Chemaf in 2022, but with the drastic drop in cobalt prices in 2023, the project stalled.
Virtus is a small company with only eight employees, founded in 2022 by former Green Beret soldier Phil Braun and Harvard Business School graduate Andrew Powch.
There are doubts within the industry regarding their operational capabilities – a previous investment made by Virtus in the Democratic Republic of Congo in 2023 is still pending due to property disputes, and an additional $250 to $300 million investment is required for infrastructure upgrades at Chemaf.
Over the past decade, CCP enterprises have invested billions of dollars in an attempt to dominate mining in the Democratic Republic of Congo, which produces nearly 75% of global cobalt. Analysts point out that the successful acquisition by the American company is structurally significant for Western critical mineral security. However, whether Virtus can operate stably in the complex local environment remains to be seen.