Chemaf Drops Acquisition Deal with China’s Norin Mining, Signaling a US Win in Critical Minerals Battle
Chemaf Resources Ltd., a copper and cobalt producer backed by Trafigura Group, has officially terminated its sale agreement with Norin Mining Ltd., a subsidiary of China’s state-owned Norinco Group. The deal collapse is being viewed as a strategic win for the US, which has been pushing to counter China’s dominance over global critical mineral supply chains.
The Democratic Republic of Congo (DRC), home to some of the world’s largest cobalt reserves, played a key role in blocking the transaction by withholding approval. The DRC government’s stance, influenced by US diplomatic intervention, ultimately led to the deal’s collapse.
Key Factors Behind the Failed Sale
The Norin Mining takeover was first announced nine months ago as part of Chemaf’s effort to raise capital for its cobalt and copper projects. However, the transaction faced immediate resistance from Congo’s state mining company, Gecamines, which owns the primary mining permits leased to Chemaf.
Major obstacles to the deal:
- Government Objections: The Congolese government refused to grant regulatory approval, citing concerns over foreign control of its strategic mineral resources.
- US Diplomatic Pressure: US officials lobbied Congo’s government to block the Chinese acquisition, arguing it would further strengthen China’s grip on global mineral supplies.
- Licensing Rights Dispute: Gecamines claimed it had the final say over any transfer of control regarding the cobalt mining license, effectively stalling the deal.
The Geopolitical Battle for Critical Minerals
The DRC is the world’s largest producer of cobalt and the second-biggest supplier of copper, making its mineral sector highly strategic.
- China’s dominance: Chinese firms control more than 70% of Congo’s cobalt production and hold major stakes in key mining operations.
- US countermeasures: The US has been working to diversify its critical mineral sourcing to reduce dependence on China.
The Chemaf-Norin deal was part of China’s broader strategy to consolidate its hold on cobalt, a mineral essential for lithium-ion batteries used in electric vehicles (EVs), smartphones, and renewable energy storage.
Implications of the Failed Acquisition
The termination of the Chemaf-Norin deal carries significant implications for both the DRC’s mining sector and the global critical minerals market.
1. Victory for US Influence in the DRC
The deal’s collapse highlights the growing influence of the US in Congo’s mining policies.
- US-Congo relations: Since February 2025, the DRC has been offering the US exclusive access to mining and infrastructure projects in exchange for security assistance against armed groups backed by neighboring Rwanda.
- Strategic resource partnership: The US aims to secure cobalt and copper supplies from Congo, reducing its dependence on Chinese-controlled sources.
2. Blow to China’s Critical Mineral Strategy
The blocked sale is a setback for China’s efforts to consolidate its dominance in the global cobalt market.
- China’s dependence on DRC cobalt: More than 60% of China’s cobalt supply originates from the DRC, making it a vital strategic interest.
- Geopolitical risks: The deal’s failure may complicate future Chinese investments in the DRC’s mining sector, as the US expands its influence.
3. Financial Fallout for Chemaf and Creditors
The abandoned sale leaves Chemaf in financial limbo, as it still requires hundreds of millions of dollars in investment to develop its key projects.
- Debt concerns: The sale would have allowed Chemaf to repay creditors, including Trafigura, in full. With the deal off the table, repayment plans remain uncertain.
- Funding challenges: The company now faces a cash crunch, forcing it to seek new investors or financial backers.
Market Reaction and Investor Sentiment
The collapse of the Norin deal has caused volatility in global cobalt and copper markets:
- Cobalt futures on the London Metal Exchange rose 3.7% following news of the deal’s termination, reflecting tightening supply concerns.
- Copper prices climbed 2.4% on expectations of reduced output from the DRC.
- Mining stocks rally: Shares of US-based cobalt miners surged, with Jervois Global Ltd. gaining 4.2%, as investors bet on reduced Chinese competition.
Chemaf’s Strategic Outlook Moving Forward
Following the failed acquisition, Chemaf Resources faces key strategic decisions:
- Seeking alternative buyers: The company may pursue a US or European buyer to align with Washington’s interests and secure funding.
- Partnership with DRC government: Chemaf may strengthen ties with Gecamines to protect its mining licenses and gain local support.
- Increased Western interest: With the Norin deal blocked, US and European investors could target Chemaf’s projects to reduce China’s influence.
Global Impact on Critical Mineral Supply Chains
The Chemaf-Norin collapse could have long-term implications for global supply chains:
- Cobalt supply disruptions: The DRC’s tighter control over its mineral sector may lead to lower cobalt exports, driving prices higher.
- Western influence grows: The US and its allies are likely to increase investments in African mining projects to counter China’s dominance.
- EV battery costs: With cobalt prices rising, EV manufacturers may face higher production costs, impacting consumer prices.
Conclusion: A Strategic Win for US Interests
The termination of Chemaf’s sale to Norin Mining is a geopolitical victory for the US, curbing China’s growing influence in the DRC’s critical mineral sector. However, the fallout leaves Chemaf in financial uncertainty, raising questions about the company’s future financing prospects.
Moving forward, the US and its allies are likely to strengthen partnerships with African nations to secure access to critical minerals, reducing their dependence on Chinese-controlled supplies.
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