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Chemaf’s new US-Indian owners have signed settlement deals with creditors holding most of the Congolese copper miner’s $804 million debt, in agreements expected to cut what it owes by more than half even as the company seeks funds to complete projects, company documents reviewed by Semafor show.
The settlements would see creditors give up as much as $475 million, thereby removing one of the main obstacles to restarting Chemaf, which reports have suggested will reopen in January. The White House has described Chemaf as its flagship investment in DR Congo as part of the Trump administration’s wider strategic push to loosen China’s grip on critical minerals supply chains.
About $330 million of debt would remain at Chemaf after the settlements. Executives told investors during a May earnings call that completing the projects and restarting operations would require up to $260 million, raised through new borrowing, according to a transcript reviewed by Semafor. Existing creditors are absorbing the immediate cost of the turnaround by accepting less than they are owed.
Siddharth Gadekar, an analyst at Equirus Securities, told Semafor the value of the deal now depends on Chemaf returning to production. “If they are successful in restructuring the debt, then this can be a very big turnaround story,” he said.
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Virtus Lloyds, a joint venture between US-based Virtus Minerals and India’s Lloyds Metals & Energy, acquired Chemaf for up to $30 million in March after a cash crunch forced the miner to seek a buyer, leaving unfinished its $1 billion Mutoshi project, a new large-scale copper and cobalt mine and processing complex under construction near Kolwezi in southern Congo.
But Chemaf only changed hands after Washington and Kinshasa signed a minerals pact last December giving US and aligned companies preferential access to some mining assets in a sector where Chinese companies control roughly 80% of critical mineral production. Norinco Mining, part of China’s state-owned defense group, had previously agreed to buy Chemaf in a roughly $1.4 billion deal that included $920 million to clear its debt and $500 million to develop its mines. The transaction failed to win Congolese regulator approval amid reported US lobbying.
Lloyds expects Chemaf to reach commercial-scale production by July 2027. The miner remains out of production, with Etoile, its main operating plant near Lubumbashi, still shut beyond the two months employees were told in May. Juresse Lokosha, president of the Union for Social Peace, which represents workers at Chemaf, told Semafor that the delay was no longer workers’ main concern after the union secured an agreement keeping them employed and paid throughout the stoppage.
Step Back
Lloyds said the company owed about $500 million in principal, with accrued interest bringing the total to $804 million to Chemaf. A large part of the borrowing came from a 2022 $600 million financing package arranged by global commodities trader Trafigura, with Trade and Development Bank leading the lender syndicate. Trafigura declined to comment, while Lloyds did not respond to Semafor’s request for comment.
Notable
- Virtus, the US firm lined up for a key DR Congo minerals deal, overstated its mining experience, documents and sources show.