Recent News Update:
Two informed sources have informed Reuters that the state-owned mining company Gecamines from the Democratic Republic of Congo is making a bid of $1 million to purchase the cobalt and copper assets of the mining company Chemaf, in order to prevent China from strengthening its control over the critical metals in the country.
Chemaf, a partner of the commodity trading firm Trafigura, agreed in June of this year to sell its copper and cobalt assets to the Chinese state-owned enterprise and defense and industrial giant “China North Industries Group Corporation” (Norinco).
Copper and cobalt are crucial materials for producing electric vehicles and clean energy infrastructure. In recent years, China has heavily invested in Africa and South America, extracting critical minerals and using tactics such as “overproduction and predatory pricing” to maintain its control over the global supply of critical minerals, prompting concerns from the United States and other Western countries.
The state-owned mining company Gecamines in the Democratic Republic of Congo, also known as the Democratic Republic of Congo or Congo (Kinshasa), holds the leasing rights to the Chemaf mine. Chemaf sought approval from Gecamines for the sale to “China North Industries” (referred to as Northern Industries), but was rejected.
Subsequently, Gecamines proactively made a bid for Chemaf’s assets, exacerbating an already complex deadlock. US officials have been lobbying against Chinese control of the resource-rich Copperbelt region in central Africa.
Sources informed Reuters that Gecamines has proposed a bid close to $1 million to purchase Chemaf’s mines and processing plants, and hopes to conduct an audit of Chemaf’s debt before finalizing a payment plan to resolve the borrowing issues.
Insiders revealed that Chemaf’s debt has soared to between $900 million and $1 billion, requiring an additional $300 million to expand production and achieve profitability.
One source mentioned that the Chinese state-owned enterprise Northern Industries has put forth a bid of $900 million to $1 billion, including addressing Chemaf’s debts and unpaid taxes. The source added that the Chinese mining company has pledged to advance Chemaf’s plans to increase copper and cobalt production to approximately 75,000 tons and 25,000 tons, respectively.
Robert Lukama, the Chairman of Gecamines, told Reuters, “I can confirm that we have made a better offer than China North Industries, with the condition that we conduct a thorough investigation of the debt.”
Lukama added, “More importantly, the government has rejected it and has notified Chemaf through a letter that they will not accept the deal from Northern Industries. We also confirm that apart from ourselves, we will not provide another opportunity to anyone else.”
Three sources informed Reuters that Northern Industries’ actions have drawn attention from the United States. US State Department officials are urging the Democratic Republic of Congo to block this transaction. One of the three sources mentioned that the US hopes the Democratic Republic of Congo can find an alternative to Northern Industries.
Sources indicated that US officials are also convening Western companies to consider purchasing Chemaf’s assets. China North Industries has been under US sanctions since 2021.
The Democratic Republic of Congo is the world’s largest supplier of cobalt. With Beijing’s support, Chinese mining companies have become major investors in the Democratic Republic of Congo. Beijing is actively seeking copper and cobalt resources to support China’s electric vehicle industry. Northern Industries already owns the Comica and Lamikal copper-cobalt businesses in Congo (Kinshasa), producing nearly 90,000 tons of copper last year.