Chemaf to cease operations without investor

A copper and cobalt miner in the Democratic Republic of Congo that’s become a symbol of the growing competition for mineral deals between the US and China said it will stop production in November if it can’t secure an investor.

Chemaf Resources Ltd. put itself up for sale more than two years ago after financial troubles left the company unable to complete development projects. The firm – backed by Trafigura Group – abandoned a transaction with a unit of Chinese state-owned arms manufacturer Norinco Group in March after Congo withheld the necessary approvals.

“We have intensified our efforts to identify a suitable investor,” Chemaf chairman Shiraz Virji said in an email sent to employees on Sept. 16. However, “significant and unsustainable financial pressure” means the company will cease production and related operations at the end of November “if no investor is in place,” according to the email, which was seen by Bloomberg News.

Chemaf — which has about 3,000 direct employees — didn’t respond to a request for comment.

The company produced a modest 20,000 tons of copper last year, but is building what would become one of the world’s largest cobalt mines – the two metals are extracted together in Congo.

The sale to Norin Mining was scrapped six months ago after Congo’s state miner Gecamines – which owns the permit Chemaf leases for its flagship Mutoshi project – objected to the deal. US officials also urged President Felix Tshisekedi’s administration to prevent the transfer to the Chinese firm.

The US and Congolese governments are discussing a partnership that would see American companies offered access to the central African nation’s rich deposits of metals including copper, cobalt, lithium and tantalum. Congo has become an important element of the White House’s plans to loosen China’s grip over supply chains of key minerals.

Bloomberg reported in July that a US consortium involving ex-special forces and intelligence personnel was negotiating the purchase of Chemaf and had moved into pole position to acquire the company. That proposal involves New York-headquartered Orion Resource Partners.

Trading house Trafigura arranged a $600 million loan for Chemaf in 2022 to finance the upgrade of the existing Etoile mine and the construction of Mutoshi, which was designed to produce 16,000 tons of cobalt and 50,000 tons of copper a year.

A spokesperson for Trafigura declined to comment.

Chemaf is still aiming “to achieve a transaction that enables the repayment of our debts” and the completion of the unfinished projects, Virji wrote. The company is working with Congolese authorities and its partners to “identify and secure” potential investors, he said.

Congo — which mines about three-quarters of the world’s cobalt — has banned exports of the metal used in electric-vehicle batteries as well as the aerospace and defense industries.

The government will allow some shipments to resume from mid-October and has announced strict export quotas of about 97,000 tons for both 2026 and 2027. Those volumes are less than half of the cobalt produced last year in Congo.

(By William Clowes)