Aluminum and Copper

Gertler mining deals could cost Congo $1.76bn in royalties

Gertler mining deals could cost Congo $1.76bn in royalties
Mining News Pro - Congo could lose out on $1.76-billion in potential royalty payments from its copper and cobalt mining deals with Israeli mining magnate Dan Gertler, an anti-corruption group said on Wednesday, calling on the government to open an investigation.
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The US Treasury sanctioned Gertler and more than 30 of his businesses in December 2017 and June 2018, accusing him of leveraging his friendship with former Congo President Joseph Kabila to secure lucrative mining deals.

Gertler has denied any wrongdoing.

Using data including recently published contracts on the mining ministry website, the campaign group Congo is Not for Sale (CNPAV) estimated that deals with Gertler for cobalt, copper and oil concessions have already cost the state around $1.95-billion.

In a report, CNPAV accused Gertler of acquiring mining and oil licences at "knockdown prices before selling them on to international partners, or even back to the government, for incredible profits".

Congo could lose out on an additional $1.76-billion in royalty payments if the contracts are not reviewed, CNPAV said, bringing total losses as high as $3.71-billion.

"The Congolese government cannot ignore the haemorrhage of billions of dollars from its coffers when it desperately needs the funds to rebuild its economy and pull its citizens out of poverty," said Jean Claude Mputu from CNPAV.

A spokesman for Gertler told Reuters that CNPAV was "simply making up numbers in an effort to generate the media interest on which their funding relies".

Congo's government spokesman said he could not immediately respond to the allegations.

Congo produces more than 70% of global cobalt supplies and is Africa's biggest copper miner, but it remains one of the world's poorest countries.

Its foreign exchange reserves stood at just $506-million in April, corresponding to two weeks of imports of goods and services, according to central bank data.

Potential further losses could accrue from the State mining company Gecamines' transfer of the right to collect royalties to companies affiliated with Gertler through a series of complex financial deals, CNPAV said in the report.

The largest chunk is expected to come from Swiss miner Glencore's KCC and Mutanda Mining concessions, worth around $1.46-billion over the next 19 years, CNPAV said. Glencore declined to comment.


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