Congo to OK first mine sale in US deal

The Democratic Republic of Congo (DRC) is reportedly ready to approve the sale of Chemaf to U.S.-based Virtus Minerals, advancing a strategic minerals partnership between Washington and the African nation with the first deal for a local mine. 

Virtus agreed to acquire Chemaf’s equity for $30 million and plans to invest about $750 million to complete stalled projects, according to sources cited by Bloomberg News this week.

Virtus will also assume debts owed to creditors including commodities trader Trafigura, whose $600 million loan in 2022 funded construction at Mutoshi copper and cobalt project and expansion at the similar Etoile operation.

The transaction tests a broader US–Congo minerals agreement signed in December alongside a Washington-brokered peace deal between Congo and Rwanda. It marks a key step in a deal involving one of the DRC’s most contested mining assets, and a potential blueprint for how preferential access for U.S. investors will work in practice.

Financial strain

Congo’s mines minister, Louis Watum, notified Virtus last week that the government intends to clear the takeover, Bloomberg said. Chemaf put itself up for sale in in 2023 after financial strain stalled the development of Mutoshi, planned as one of the world’s largest cobalt mines.

The DRC has become part of the U.S. strategy to reduce reliance on China for critical minerals, given the Central African country’s vast reserves of copper, cobalt, lithium and tantalum. 

State role

Virtus signed the purchase agreement in February with trustees representing roughly 95% of Chemaf’s shares, though Congolese law requires state approval for changes of control over mining permit holders.

The DRC has wielded significant influence over the sale through state miner Gecamines, which holds a key permit leased by Chemaf for Mutoshi, after previously blocking a proposed deal with a Chinese state-backed firm. 

The acquisition is one of several projects underpinning the US–Congo pact, alongside Orion CMC’s preliminary deal to acquire stakes in Glencore’s (LSE: GLEN) Congolese copper-cobalt mines and a proposed railway by Portugal’s Mota Engil SGPS linking the copperbelt to Angola’s Atlantic coast, highlighting a broader push to reshape supply chains for critical metals.