DRC mining billionaire turns 29,900% profit on oil deal
Billionaire mining financier Dan Gertler has been accused by human rights group Global Witness of a strip and flip transaction in the Democratic Republic of Congo.
Bloomberg reports according to official records Nessergy, an oil driller owned by the Israeli businessman, paid $500,000 for 95% of Congo’s portion of the offshore block in 2006.
Congo’s government paid $150 million to buy it back last year, according to le Soft, a Kinshasa-based newspaper, but none of the details of the transaction has been made public despite DRC government regulations requiring large contracts involving the country’s natural resources be made publicly available within 60 days.
Bloomberg could not secure comments from either Nessergy nor the African nation’s Oil Minister, while Gertler’s financing firm, the Fleurette Group, said it is protected by confidentiality agreements with the DRC and Angola, which are jointly developing the field.
Reuters quotes a Fleurette spokesperson as saying the $500,000 signing bonus was “the standard amount companies paid to Congo for oil rights at the time the contract was agreed” and that the block’s value had risen sharply since discoveries in nearby Angolan fields.
It is not the first time Gertler’s name has been mentioned with regard to questionable natural resource deals in the DRC.
Gertler is the grandson of Moshe Schnitzer, Israeli diamond exchange founder, and arrived in the Congo in 1997 shortly after the military coup that put current president Joseph Kabila’s father in charge of the resource rich country which is almost the size of Western Europe.
Gertler is said to have used his relationship with the younger Kabila and his now late adviser Augustin Katumba Mwanke to bag mining projects “by stripping from others if necessary, only to sell them on at great profit.”
Now delisted Kazakh mining group ENRC, was forced to pay out $1.25 billion to Canadian mining firm First Quantum in 2012 after the DRC government expropriated First Quantum’s Kolwezi copper projects in the country only to sell them onto ENRC via Gertler.
ENRC acquired a 50.5% stake in Camrose, a company controlled by the Gertler family trust, for $550 million last year.
Camrose owns a stake in Africo Resources, listed in Toronto, which partners with DRC’s state-owned Gecamines in various copper-cobalt, gold and iron projects and dominates the DRC diamond trade.
Kabila has on occasion dispatched Gertler as special peace envoy for the DRC and Gertler answers his critics by saying he’s attracted $7 billion worth of much-needed investment to the war-torn country.
Image of street scene in the DRC capital of Kinshasa by Tomas