Norinco bids $900m for Chemaf’s assets, covering debt, plus $500m pledged for Etoile and Mutoshi mine expansions.

Wedoany.com Report-Feb 25, China North Industries (Norinco), a major Chinese conglomerate, is working to advance its $1.4 billion (10.15 billion yuan) proposal to acquire copper and cobalt assets from Chemaf in the Democratic Republic of the Congo (DRC). Reuters, citing two informed sources, reports that Norinco aims to resolve delays by offering the DRC government a larger share in the deal. Initially proposed in June, the bid has encountered challenges due to a competing offer from Gecamines, Congo’s state-owned mining entity.

To address the deadlock, Norinco has suggested increasing the DRC government’s stake in the Mutoshi and Etoile mines from 5% to up to 15%, at no extra cost, subject to further talks. This adjustment would grant the government a proportional share of the metal output for sale. Norinco, which already operates the Comica and Lamikal mines in the DRC, presented this revised proposal through Chemaf, its partner alongside commodities trader Trafigura, to Congolese authorities last month.

The deal, valued at approximately $900 million (Dh3.31 billion) including debt repayment, also includes a $500 million commitment to expand the Etoile and Mutoshi projects. However, Gecamines, which controls the Mutoshi mine lease, has withheld approval. Gecamines chair Robert Lukama stated in November: “The offer of around $1 million for the assets is viable,” indicating no agreement with Norinco has been reached. Chemaf has claimed Gecamines is hindering the sale and has not provided a substantial counteroffer.

Norinco remains open to refining the ownership structure while seeking to retain a majority stake. The company’s plan would deliver about $920 million immediately to Chemaf’s creditors—including Trafigura, First Bank, and Trade & Development Bank—who have awaited repayment for 18 months. An additional $500 million would support mine development. Chemaf emphasized in a letter to Gecamines that any buyer must cover roughly $920 million in debt and fund the $500 million expansion, aligning with Norinco’s terms.

The central African Copperbelt, where these assets are located, is a vital region for global copper and cobalt supplies. The situation has drawn international attention, with U.S. officials expressing concerns over foreign influence in the area’s mineral resources. Despite this, Norinco’s focus remains on securing the deal through negotiations with the DRC government and addressing local stakeholder needs.

Gecamines has acknowledged its current lack of funds to acquire and develop the assets independently. Chemaf’s financial pressures underscore the urgency of a resolution, with creditors pushing for a swift outcome. Norinco’s proposal aims to balance these interests, offering immediate financial relief and long-term investment in the mines. Discussions continue as all parties navigate the complexities of ownership, funding, and regional resource priorities, with the outcome set to impact the DRC’s mining sector.