Chemaf SA, a cobalt miner and long time partner of commodities trader Trafigura, has reached a deal to sell its assets in the Democratic Republic of Congo to Chinese miner Norin Mining, it said on Thursday.
The deal with Norin Mining will enable Chemaf to settle its debts and the new owner has the financial resources and technical capabilities to complete the expansion of two cobalt and copper projects in Congo, Chemaf said in a statement.
Chemaf, a privately-owned copper and cobalt miner, offered itself for sale last year due to a cash crunch that was also stalling progress at its Etoile and Mutoshi projects in Congo.
The company said it “found a new owner, Norin Mining, which has the experience and commitment to build on” work done by its founder and chairman Shiraz Virji.
Norin Mining, a unit of China North Industries Corp, will invest in advancing the two projects that were stalling as Chemaf struggled with debts and falling cobalt prices.
Chemaf said last year that it had about $690 million in debt and around $590 million of the borrowings were arranged by Trafigura.
The deal would help the Chinese giant strengthen its presence in Congo, the world’s No. 1 cobalt supplier, where it owns Comica and Lamikal copper and cobalt operations.
(By Felix Njini; Editing by Elaine Hardcastle and Emelia Sithole-Matarise)
