Global Witness on Monday revealed that Gecamines, the state mining company of the Democratic Republic of Congo last year signed over royalty rights in the Kamoto Copper Company (KCC) owned and operated by Switzerland’s Glencore to an offshore company belonging to a friend of the president.
According to Global Witness, a London-based human rights organization, the 2.5% royalty stream that was owned by Gecamines could generate as much as $880m when KCC mines and processing facilities go back into full production.
The Global Witness report shows that under the terms of the January 2015 agreement, royalties due to Gecamines from KCC were assigned to a Cayman Islands company called Africa Horizons Investment.
The Global Witness investigation traced Africa Horizons to Israeli billionaire and close friend of DRC President Joseph Kabila, Dan Gertler’s Fleurette Group. 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 Kabila’s father in charge of the resource rich country which is almost the size of Western Europe.
Gertler was also the Congo partner of US hedge fund Och-Ziff in deals for which it was charged by US authorities for foreign corruption, eventually paying out over $400m in a settlement. Gertler has been linked to several other suspicious mining deals in Congo says Global Witness.
A spokesperson for the Fleurette Group acknowledged the existence of the agreement but rejected the calculations made by Global Witness and called the report misleading.
Glencore owns an effective 75% of KCC through Toronto-listed Katanga Mining. In operation since end-2007 KCC mining and processing were suspended in September 2015 for refurbishment and expansion. The expansion project has the potential to nearly double current annual production to some 300,000 tonnes of copper and cobalt.
Glencore also confirmed the existence of the transaction but said it acted on instruction from Gecamines and was not involved in the Gecamines–African Horizons agreement.
Kabila was due to step down at the end of the year after a second term, but his government has postponed elections in the central African nation to April 2018 leading to deadly street protests by opposition supporters.
Global Witness points out that the sums involved in the royalties deal are more than the Congo’s annual health spending. The country sits at number 176 on the Human Development Index and has one of the lowest rates of GDP per capita in the world.
See below or click here for full Global Witness press release:
It is the DRC, why are people surprised? It would be news if this money was spent on roads, schools or hospitals.
how do you think 1% of Americans control 50% of assets in USA …you think you have a less corrupt system ?