Congo civil society groups demand transparency in SOKIMO deal with AJN
Civil society groups and a member of Parliament in Congo are raising concerns that state-owned gold company SOKIMO failed to follow an open and transparent bidding process before agreeing to sell its stakes in six gold assets, including 10% of Congo’s biggest gold mine, Kibali, to Canada’s AJN Resources.
The criticism follows action by Barrick Gold to block the proposed sale to AJN, after AJN on Feb. 6 said it had reached a memorandum of understanding with SOKIMO. Barrick and AngloGold Ashanti each own 45% of Kibali, and SOKIMO may not sell or transfer its Kibali stake without their approval.
Barrick last week said SOKIMO had not sought approval for the sale, and said “nor will it be granted.” On Wednesday, Reuters reported that Barrick had issued a cease-and-desist order to block the sale.
AJN’s Canada-listed shares have plunged 48.7% since the cease-and-desist order was reported, including a decline of 28.6% on Friday.
Civil society demanded that government justify the deal, under which SOKIMO would sell its 30% stakes in the Zani-Kodo, Nizi and Kibali South projects, and 35% stakes in Giro Goldfields and Wanga (Tendao), as well as the Kibali stake.
“For us, this transaction is very unfavourable for the Congolese state,” said Jean-Pierre Okenda, Democratic Republic of Congo country manager for the Natural Resource Governance Institute.
SOKIMO’s assets should have been independently valued before the memorandum of understanding was signed, and they should have been put to open tender in accordance with Congolese law, Okenda added.
Roger Abotome Bekabisya, a National Assembly representative of Watsa district in Haut-Uele province, wrote to DRC’s minister of portfolio on Monday demanding the details of the deal and the value of the stakes SOKIMO would sell to AJN.
“It is best that we get an official response, in order to know the truth,” Abotome Bekabisya said by telephone Friday. Watsa is the nearest town to Kibali gold mine.
COGEP, a Congolese natural resource governance NGO, said Prime Minister Sylvestre Ilunga should intervene to halt the sale and demanded the minister of portfolio make a public statement to clarify the situation.
DRC’s minister of portfolio manages the country’s state-owned enterprises and approved the AJN-SOKIMO memorandum of understanding, according to AJN’s chief executive, Klaus Eckhof.
According to the memorandum of understanding, SOKIMO would exchange its assets for a 60% stake in a newly capitalised AJN, but with only two out of five board seats.
Eckhof did not respond to requests for comment on Friday. The prime minister’s office declined to answer Reuters’ questions.
AJN’s Canada-listed shares were trading at C$0.4 by 1711 GMT, below where they traded prior to the SOKIMO deal announcement on Feb. 6, which had sent the stock up 140%.
(By Helen Reid and Stanis Bujakera; Editing by Leslie Adler)