US' dirty geopolitics again on display exposing its idea of 'fair competition': China Daily editorial

The great lengths the Joe Biden administration has gone to over the past months to prevent a Chinese enterprise from acquiring a mining company in the Democratic Republic of Congo testify to the new lows the US can stoop to in order to win its "competition" with China.

Chemaf Resources Limited, a copper and cobalt mining company based in the DRC, published a statement in June, saying it had reached an agreement to sell the company (and its subsidiaries) to China's Norin Mining. The statement also said the transaction was expected to be completed in the fourth quarter of this year, and the DRC government had approved the sale.

Chemaf's Etoile mine has produced more than 300,000 tons of copper and 55,000 tons of cobalt hydroxide over the past 20 years. The plan is to expand Etoile and build the Mutoshi copper-cobalt mine project, which could produce more than 75,000 tons of copper and 20,000 tons of cobalt hydroxide per year. These minerals are widely used in the manufacturing of jet fighters, drones and electric vehicle power batteries.

It is through "a highly competitive international auction process", as Jeremy Meynert, chief adviser to Chemaf Group of Companies, put it, that Norin Mining won the bid to acquire Chemaf. The Chinese mining and trading company has a portfolio of base metal projects across the African continent, including two operational in the DRC — Comica and Lamikal.

"We are pleased to have signed a transaction with Norin Mining which will allow CRL and Chemaf to meet their obligations to existing lenders and creditors," Meynert said.

However, over the past few weeks, the Biden administration has reportedly held talks with some North American companies — including KoBold Metals and Orion Resource Partners of the United States, and First Quantum Minerals of Canada — to persuade them to acquire the DRC-based company either jointly or alone.

According to reports in The Wall Street Journal, Washington's latest efforts to block the deal have apparently produced some effects. Sources familiar with the deal said the acquisition has been blocked due to pressure from the US, as the DRC government said it wants to "diversify" Chemaf's partnership, although a spokesperson for Chemaf asserted that the company is still committed to the deal with China's Norin Mining.

The Biden administration's focus now is on Chilean Cobalt Corp, a Pennsylvania-based critical minerals exploration and development company, whose CEO Duncan Blount had earlier rejected the idea of acquiring Chemaf, saying it was overpriced. However, Blount told the media recently that he was still interested in acquiring Chemaf and that he is communicating with the US State Department and forming a consortium with other companies to execute his plan.

Other Western companies on the Biden administration's wooing list that are reportedly interested in acquiring Chemaf include Anglo American, Rio Tinto and Freeport-McMoRan.

In recent years, the Biden administration has pledged to invest in infrastructure projects across Africa, including the DRC where the US promised to build a railway to facilitate the transportation of copper and cobalt to the Atlantic port of Lobito via Angola. However, due to the lack of modern infrastructure and skilled labor in the DRC, Washington has found it difficult to attract US investors to fund infrastructure projects in the country.

Although it is not known how the Biden administration has managed to dispel the Western companies' concerns on the DRC company's debt burdens, many see US geopolitics at play in the latest developments. In general, before investing in African countries, US investors usually want some "favors" from Washington, which could include financial support, guarantees against possible expropriation or sudden tax increases, or exemption from the Foreign Corrupt Practices Act.

The possibility of the US administration adopting a take-it-or-ruin-it approach to force bankruptcy upon Chemaf so as to block its deal with Norin Mining cannot be ruled out if it fails to persuade any Western company to acquire the DRC company. When it comes to the US, no abyss is deep enough for it to stoop to.