Chemaf is planning to establish a major copper and cobalt mining operation in the DRC. Credit: Hans Benn from Pixabay.

Copper and cobalt mining company Chemaf is seeking potential buyers for the business as it faces a cash crunch, according to a document seen by Reuters.

The proposed sale comes after its mine expansion plans faced financial difficulties, requiring a fresh cash injection, reported Bloomberg.

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The miner requires up to $300m to complete the expansion projects at the Etoile and Mutoshi copper and cobalt mines in the Democratic Republic of Congo (DRC). These are currently 85% complete.

In the document, Chemaf said that these projects have been impacted by weakening cobalt prices and high inflation, and the current debt is not available for a complete draw.

Chemaf, a longtime partner of commodities trader Trafigura, is scouting for buyers to acquire the whole company.

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Besides developing the largest copper and cobalt mines in the DRC, Chemaf is constructing two additional processing facilities.

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In pursuit of these plans, Chemaf secured a $600m loan arranged by Trafigura in 2022.

The privately held copper and cobalt miner has a debt of $690m.

Trafigura battery metals head Daniel von Arx told Reuters via email: “We are supportive of Chemaf’s efforts to conclude a successful sale process.”

The deadline for investors to submit non-binding offers was 17 October 2023. Following this, Chemaf may choose to invite certain bidders to undertake a due diligence process.

However, the deadline has now been extended to provide additional time, reported Bloomberg News, citing a person familiar with the matter.

Chemaf is targeting around $1bn in valuation and is considering other options, including a joint venture.