A transaction to change ownership of the lease without prior approval from Gecamines would be “void” if it includes the license where Chemaf is developing its Mutoshi project, Gecamines chairman Guy-Robert Lukama said in an interview. “If they sell, we will withdraw the lease agreement.”

Responding to questions on Friday, Chemaf said it has been engaging at the “highest level” of government in Congo and has already secured approval from the mines minister for a proposed transaction.

“Following these approvals we are preparing to seek formal approval from Gecamines SA, our respected partner in Mutoshi,” a spokesperson for Chemaf said.

Kizito Pakabomba was sworn in as Congo’s new mining minister earlier this week, replacing Antoinette N’Samba Kalambayi. Neither responded to requests for comment sent outside office hours.

Chemaf arranged a $600 million loan from Trafigura in late 2022 to fund its expansion, but the mine development overshot its budget and the commodity trading giant was forced to seek new funding. Chemaf offered itself for sale shortly afterward, asking prospective bidders to commit the $250 million to $300 million still needed to complete construction of its projects.

The company, whose relationship with Trafigura dates back more than 15 years, has been planning a large complex at Mutoshi, in Congo’s Lualaba province, since at least 2018. The site would be capable of producing 16,000 tons of cobalt and 50,000 tons of copper a year.

Any move by Gecamines to withdraw the permit may threaten efforts to find a buyer by complicating the fate of the unfinished mining complex, but it wouldn’t impact the dozens of other licenses that Chemaf owns directly.

Trafigura said that as “one of the creditors to Chemaf,” it is “not managing or influencing decisions on the investment process.”

‘Non-performing’ lease

Gecamines has contacted Isle of Man-registered Chemaf on several occasions since the closely held firm — owned by businessman Shiraz Virji — began the sale process, but hasn’t received a reply, according to Lukama. The 25-year lease agreement secured in 2015 is “non-performing,” which makes Gecamines “entitled to terminate it,” he said.

Chemaf said on Friday it has invested about $520 million in developing Mutoshi, which is about 80% complete. The company has previously blamed the funding gap on “inflationary pressures across the global mining sector,” a “soft cobalt pricing environment” and the unavailability of the full loan from Trafigura.

(By William Clowes and Michael J. Kavanagh)