South African newspaper Mail & Guardian did some digging and uncovered some of the dealings of Israeli businessman Dan Gertler – aka Mr. Grab – who "has become synonymous with 'grabbing and flipping'" mining concessions in the Democratic Republic of Congo.
Gertler, 38, used his relationship with DRC president Joseph Kabila and Kabila's now late adviser Augustin Katumba Mwanke to bag mining projects "by stripping from others if necessary, only to sell them on at great profit."
Here is what M&G says happened to Canada's First Quantum Minerals in 2009:
- Toronto-listed First Quantum Minerals (alongside South Africa's Industrial Development Corporation and DRC state miner Gecamines, among others) owned the prized Kolwezi copper and cobalt tailings project in south-eastern DRC.
- By late 2009 First Quantum had, according a subsequent court filing, spent $430-million readying Kolwezi for production, which was imminent. But it came under increasing pressure from the authorities, who unceremoniously revoked its concession in January 2010 and passed it on to a new joint venture encompassing state-owned Gecamines (30%) and the mysterious Highwind group of companies (70%), registered in the British Virgin Islands.
- By August 2010, Gertler presided over a simultaneous set of transactions that saw both the completion of the grab and the flip, as follows: Camrose – the Gertler company in which [South African housing minister] Sexwale and company had invested – acquired the Highwind group and then sold half of Camrose to the London-listed Eurasian Natural Resources Corporation – so putting Eurasian and Gertler in joint control of Kolwezi
- Eurasian faced heated criticism as it appeared to have enabled even the initial grab through the back flow of its purchase consideration of $175-million – which happened to be way below the many hundreds, if not billions of dollars Kolwezi was worth by then.
- Even Eurasian appeared concerned, filing a "suspicious activity report" with British authorities as required under anti-corruption legislation. The report said: "There is a risk that the assets of the Highwind group may have been obtained by corruption and the transaction [Eurasian's acquisition of half of Camrose] may facilitate the acquisition, retention, use or control of criminal property by the Highwind Group-Dan Gertler and others, and may result in corrupt payments being made to public officials."
Continue reading at M&A about Kolwezi and Gertler's other deals including with Canadian firm Africo, South African presidential hopeful Tokyo Sexwale and New York hedge fund Och-Ziff.
The Financial Times in June also featured Gertler – grandson of Moshe Schnitzer, the founder of Israel’s diamond exchange – who "like other middlemen who have gained influence and wealth is finding it increasingly difficult to avoid the spotlight".
According to Gertler associates he arrived in Congo in 1997 "at the suggestion of friends from the Chabad orthodox Jewish community, which has deep roots in the country":
Shimon Cohen, Mr Gertler’s spokesman, says he has attracted $7bn of investment into the country. The problem is that the Congolese state appears to have seen very little direct gain from the deals he struck.
That’s an issue rising up the agenda for the international donors bankrolling the state, for anti-corruption organisations such as Global Witness and increasingly – for reputational and regulatory reasons – for investors.
“The pressure is getting stronger from all sides and for him to raise funding on the markets is not an easy call any more,” a leading Kinshasa businessman says, predicting that before long he may have to cash in and move elsewhere.