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Trafigura secures US$600 million for Congo cobalt and copper mines
Deal involves enhancement of ESG compliance and responsible sourcing awareness
Michael Marray 30 Nov 2022

Singapore-based commodities trader Trafigura has closed a syndicated financing facility with Eastern and Southern African Trade and Development Bank (TDB) to develop copper and cobalt mines in the Democratic Republic of the Congo (DRC).

The facility will enable the completion of the new mechanized Mutoshi mine and processing plant in Kolwezi, and the expansion of the Etoile mine and processing plant in Lubumbashi.

The Mutoshi mine is expected to start production by the fourth quarter of 2023, and will become the world's third largest cobalt mine, with a production capacity of 16,000 tonnes of cobalt hydroxide and 48,000 tonnes of copper cathodes per year.

In January 2022 Trafigura concluded an initial US$600 million financing agreement with Chemaf Resources Ltd (formerly Shalina Resources) and Chemaf SA, a vertically integrated copper and cobalt producer in the DRC. Chemaf owns both the Mutoshi and Etoile mines.

Thereafter, TDB and other financial institutions were invited by Trafigura to participate in a secondary syndicated transaction, with TDB as mandated lead arranger.

An important component of the loan agreement involves the enhancement of environmental, social and governance (ESG) compliance and responsible sourcing awareness and implementation, in line with the performance standards of the International Finance Corporation and the guidelines of the Organization for Economic Co-operation and Development.

“We’re delighted that TDB and an initial syndicate of banks have chosen to join the facility," says Socrates Economou, head of nickel and cobalt trading at Trafigura. "We look forward to welcoming additional international and African banks to the syndicate in subsequent rounds of refinancing for these vital developments for the supply of critical minerals and the DRC economy.”

Africa – the DRC in particular – has some of the largest reserves of minerals required for the global net-zero energy transition. Resources such as cobalt and copper are among the key components of renewable energy infrastructure and technology such as wind turbines, storage systems, and electric vehicle batteries.

Established in 1985, TDB is a regional development finance institution, with investment-grade ratings and assets of US$8 billion. The bank serves 23 member states in its region, with the mandate to finance and foster trade, regional economic integration and sustainable development, through trade finance, project and infrastructure finance and asset management.

TDB is part of TDB Group, which also includes the Trade and Development Fund, Eastern and Southern African Trade Advisers Limited, and TDB Captive Insurance.

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