Party A: China North Industries Corporation（Norinco）
Party B. Chemaf 

Party A 

China North Industries Corporation (Norinco) was established in 1980 and is a wholly owned subsidiary of China North Industries Group Corporation Limited, a major state-owned enterprise under the direct supervision of the State-owned Assets Supervision and Administration Commission of the State Council (SASAC). Originally focused on military trade, Norinco has evolved into a comprehensive and international enterprise that integrates military-civilian integration, international engineering contracting, mineral resource investment and development, new energy equipment manufacturing, and infrastructure construction. Norinco has branches or representative offices across five continents, with business operations spanning emerging markets such as the Middle East, Africa, Eastern Europe, and Latin America.
The company actively engages in the exploration, development, production, and trade of overseas oil and mineral resources. Along the Belt and Road Initiative (BRI) corridor, Norinco has built and operates major projects such as the East Baghdad Oilfield in Iraq and copper-cobalt mines in the Democratic Republic of the Congo (DRC), establishing a distinctive industrial development model for oil and mineral resource commercialization.With nearly 30 years of experience in the African market, Norinco has participated in numerous infrastructure projects—such as railways, highways, and power plants—and has launched multiple investment and cooperation projects in the mineral resources sector in countries including the DRC, Angola, and Namibia.
In recent years, China’s new energy vehicle (NEV) industry has seen rapid global growth. Cobalt, a critical and irreplaceable material in ternary lithium batteries, has emerged as a key element of national strategic concern due to its supply stability. To strengthen its strategic position in the field of new energy materials and ensure a stable and reliable supply of raw materials for domestic downstream enterprises, Norinco seeks to invest in or acquire controlling stakes in high-grade cobalt mines in Africa.

Party B 
Founded in 2001, Chemaf is a key subsidiary of Shalina Resources, a privately held company headquartered in Dubai, United Arab Emirates. Chemaf specializes in the mining and refining of copper and cobalt. It owns two major mining assets in the Democratic Republic of the Congo (DRC): the Étoile and Mutoshi mines. The company also operates a large-scale smelter in Lubumbashi, making it one of the few indigenous African enterprises with a complete value chain—from ore extraction to refined metals.
The Étoile Mine is located approximately 20 kilometers north of Lubumbashi. It is a high-grade open-pit copper-cobalt mine currently undergoing expansion. Estimated reserves include 500,000 tonnes of copper and 100,000 tonnes of cobalt. The Mutoshi Mine is situated in the Kolwezi area in the southwest. Proven reserves in the northern and northeastern sections of the Mutoshi deposit include approximately 280,000 tonnes of copper and 120,000 tonnes of cobalt. This mine was previously operated by Katanga Mining and later acquired by Chemaf. It is one of the largest cobalt mines in the DRC. Chemaf has an annual ore processing capacity of 800,000 tonnes and can produce up to 7,000 tonnes of refined cobalt per year. Its main export destinations are China, Belgium, and South Korea.
The Democratic Republic of the Congo (DRC) is a vast country—covering approximately 2.344 million square kilometers, making it the second-largest nation in Africa. It is endowed with a wide variety of natural resources. In addition to housing the world’s second-largest equatorial rainforest and substantial petroleum reserves, the DRC is also rich in numerous minerals and metals. Remarkably, the country holds nearly half of the world’s cobalt reserves. Cobalt is a rare and highly versatile mineral, essential for manufacturing many high-tech products and driving the global transition to renewable energy. It has been called the "diamond of modern industry." Not only is the DRC richly endowed with cobalt, but the mineral is also easier to mine, of higher quality, and cheaper to produce there than in most other producing countries.

Negotiation Process
In 2024, Norinco seeks to acquire full or controlling ownership of two key mining sites—Étoile and Mutoshi—operated by the UAE-based company Chemaf in the Democratic Republic of the Congo (DRC), in order to secure a long-term and stable supply of cobalt and copper resources. Chemaf is currently burdened with over USD 900 million in outstanding bank and supply chain debt, including several short-term bonds that are nearing maturity. To avoid bankruptcy and restructuring, the company urgently needs to bring in a strong strategic investor.
Norinco has proposed a cooperation model that includes equity acquisition combined with a government-backed capital injection. As part of this proposal, Norinco has suggested increasing the shareholding of the DRC’s state-owned mining company Gécamines from 5% to 15% in order to enhance the legitimacy and feasibility of the transaction. However, this deal has faced strong opposition from Gécamines, which argues that the proposed transaction may violate existing lease agreements. In addition, the United States, concerned about China’s growing control over global cobalt resources, has actively intervened in the negotiation process, encouraging U.S. companies to bid for Chemaf’s assets.
This case simulates Norinco’s participation as the acquiring party in negotiations over Chemaf’s cobalt mining rights in the DRC. The negotiation simulation is set to take place in Xi’an, China. During the negotiation, both parties will discuss the following key issues:
·Investment valuation and pricing terms.
·Controlling stake and corporate governance structure.
·Interest alignment with existing partners (e.g., Gécamines, the state-owned mining company).
·Environmental and Social Governance (ESG) commitments.
·Impacts of bids by U.S. companies and other third-party competitors, and strategies in response.
·Other related matters.

The Negotiating Objectives
Norinco and the UAE-based company Chemaf have reached a negotiated agreement on the acquisition (transfer) of cobalt mining rights located in the Democratic Republic of the Congo (DRC).