Reports suggest that DRC state-owned miner Gécamines intends to withdraw its 25-year lease contract with Chemaf should it proceed with its sale. 

Gécamines Chairman Guy-Robert Lukama told reporters that it is entitled to terminate Chemaf’s lease agreement should the company’s sale proceed. The DRC government claims Chemaf has been too slow in developing certain copper-cobalt assets since it secured the lease agreement in 2015. If Gécamines withdraws the approval of the permit, Chemaf’s efforts to find a buyer would be jeopardised, given that the DRC government needs to approve the transaction to change the lease ownership.

In 2022, Trafigura signed a US$600M loan agreement with Shalina Resources’ Chemaf, where funds would be used to assist Chemaf complete the mechanisation of the Mutoshi mine, which includes building a solvent extraction-electrowinning (SX-EW) processing plant in Kolwezi and expanding its Etoile SX-EW processing plant in Lubumbashi. Once operations commenced, Trafigura agreed to also help Chemaf market its cobalt hydroxide until the end of 2027. However, reports suggest that the project had exceeded its budget and could not be completed with the current loan, prompting Trafigura to seek additional financial backing of US$200M.

By the end of 2023, Chemaf put itself up for sale, citing high inflation, the unavailability of its full loan from Trafigura, and plummeting cobalt prices throughout the year made it difficult for it to advance its projects. Interested buyers had until October 17 2023 to submit non-binding offers, including an upfront commitment fee of US$250M – US$300M to help with construction activities. The deadline has since been extended and Chemaf is considering potential JVs to develop the projects instead of selling the company outright.

The DRC government has been proactively looking (and/or being seen to be looking) to secure the rights to buy foreign-owned Cu-Co assets and build its stocks to trade, notably having made an offer to buy three of ERG’s assets in recent months.