Welcome to the Forum Rmaybon:
Chimnies are very hard to deal with; If you no longer use it I would recommend removing it at least down below the roof line. Any penetration of the roof is a potential leak and chimnies are the worse.
I had mine torn down below the roof line and covered over, closed the damper and use ventless gas logs in the fireplace. We still have the cozy look without the roof problems.
If you still need yours, the best material would be vinyl. Make sure you have adequate ventilation, replace all rotten wood in the area and seal the roof tightly, using step flashing with the shingles and counter flashing over that. Also any cracks or missing mortar in the chimney must be replaced and using a sheet metal cap would help to keep the water out.
Glenn
