Posted on 01 Jul 2024
Norin Mining Kingco, a subsidiary of Chinese miner Norin Mining, has agreed to acquire Democratic Republic of Congo-focused cobalt miner Chemaf Resources (CRL), Kallanish reports.
As a part of a strategic review, Chemaf put itself for sale last year due to financial constraints that impacted the progress of its two projects in the DRC.
The Trafigura-backed company has been focusing on the expansion of its Etoile mine in Katanga province, alongside the development of a new mine at Mutoshi in Lualaba province. Together, the two projects are estimated to produce over 75,000 tonnes/year of copper and 20,000 t/y of cobalt hydroxide, the company said Thursday.
Despite investing over $600 million in the projects, additional funding was required due to the drop in copper and cobalt prices, which impacted Etoile mine’s cash flow. This led the company to launch a strategic review last year.
“I am pleased to have found a new owner that can invest in completing the development of Etoile Phase 2 and Mutoshi, which will be to the benefit of the DRC for decades to come,” says Chemaf founder and chairman, Shiraz Virji. “Norin Mining has a proven track record in mining operations and development, particularly in the DRC, and is ideally positioned to bring Etoile Phase 2 and Mutoshi into production.”
Under a share purchase agreement with CRL’s parent company Chemaf Group, the Norin subsidiary will acquire all of Chemaf Group’s shares in CRL. The company has also agreed to acquire chairman Shiraz Virji’s direct interest in Chemaf.
Chemaf will use the proceeds from the sale to settle its debts, meet creditor obligations, and introduce a new owner. Though the deal has been approved by the DRC government, it is still subject to customary conditions, such as approval of Chemaf’s partner and Chinese regulatory approvals.
The financial details of the deal have not been disclosed.
Source:Kallanish
