Congo State Miner Proposes Deal for Cobalt Producer Prized by US

The Democratic Republic of Congo’s state miner, Gecamines, has proposed a deal for the control of Chemaf, a cobalt producer whose output is critical to U.S. interests. This move aligns with a recent U.S.-Congo minerals agreement that gives American firms privileged access to the country’s key mineral resources.

Gecamines owns a permit that Chemaf leases for its Mutoshi project, giving the state miner considerable influence over the process. The company informed potential buyers of its plan last year, setting off a competitive race.

At least five companies have joined the bidding, including Virtus Minerals Inc., which partnered with Orion Resource Partners to submit a binding offer to Chemaf’s shareholders.

Why Did This Happen?

Congo signed a strategic minerals partnership with the U.S. in December, granting American investors preferential access to minerals like copper, cobalt, and lithium. This agreement is part of a broader peace initiative between the U.S., Congo, and Rwanda.

The state miner Gecamines has been a key actor in the country’s mining industry. Its decision to propose a new deal for Chemaf reflects the strategic importance of the project.

Buenassa Sarl, a firm aiming to establish Congo’s first locally owned copper and cobalt refinery, has also submitted a proposal. The firm said it would prioritize U.S. offtakers for Chemaf’s output, reinforcing the U.S.-Congo minerals pact.

How Did Markets React?

Chinese miner CMOC Group Ltd., the world’s largest cobalt producer, has maintained its production targets for 2026. The company sees copper output rising by as much as 11%, while cobalt output will stay within its previous range.

Congo, which produces about three-quarters of the world’s cobalt, has imposed a ban on exports and a quota system to manage supply. This has led to a sharp rise in cobalt prices, with hydroxide prices up 345% since February.

What Are Analysts Watching Next?

Several U.S.-linked companies are vying for Chemaf’s control. UCM, a U.S. firm chaired by Justin Dibb, is also considering a takeover. Other bidders include a subsidiary of India’s Jindal Steel & Power Ltd. and Global Critical Resources Corp., an entity controlled by Austrian investor Cevdet Caner.

The U.S. International Development Finance Corp. has also shown interest in the project by signing a letter of intent to discuss a financial stake in the venture.

Congo plans to send a list of strategic mineral projects to the U.S. soon, as part of the December agreement. The goal is to facilitate American investment in key mining assets.

What Are the Broader Implications?

The U.S. is seeking to reduce its reliance on China in critical mineral supply chains. This initiative comes as the U.S. and China compete for influence in global mining and processing of strategic minerals.

Congo is the world’s second-largest copper producer and the top supplier of cobalt. A shift in control toward U.S. firms could alter the dynamics of the global minerals market.

China’s dominance in the sector is under pressure from both U.S. policy and domestic efforts by other countries to diversify supply chains. For instance, CMOC and Zijin Mining Group Co. have expanded their domestic operations in China.

What Is the Long-Term Outlook?

Congo has also launched a $29 billion iron ore and logistics project called MIFOR. This project, which includes the construction of rail infrastructure and a deep-water port, marks a significant shift in the country’s mining strategy.

The U.S. and Congo’s partnership extends beyond mining. The recent peace agreement between the two countries includes broader geopolitical considerations, including security and stability in the region.

The outcome of the Chemaf deal and the U.S.-Congo minerals partnership will have long-term implications for global supply chains and investor positioning in the mining sector.