Dan Gertler seeks to head off criticism of latest Congo mining deal


Sanctions-hit Israeli mining tycoon Dan Gertler has sought to head off criticism over his latest deal in the Democratic Republic of Congo with a public pledge to “share the wealth” with every Congolese citizen.

“We are going to offer sincere, real, transparent, professional partnership to the Congolese people”, Glencore’s former business partner in the country said in an address screened to reporters in a Kinshasa cinema on Monday. “This is the first time in history that the Congolese people will be the direct beneficiaries of the Congolese wealth.”

Mr Gertler amassed huge power and influence in the country’s mining sector after arriving as a 23-year-old diamond trader in 1997. Through his friendship with former president Joseph Kabila and a succession of deals with state-owned miner Gécamines, he secured access to some of the country’s most lucrative mineral assets and partnerships with international companies including Glencore and ENRC.

But he became mired in allegations of corruption. In 2017 the US Treasury imposed sanctions against Mr Gertler over his alleged involvement in transactions involving offshore companies that cost Congo more than $1.36bn in revenues between 2010 and 2012 alone. Mr Gertler denies all allegations of wrongdoing.

Without providing details, Mr Gertler said in the video address that he would enable all Congolese “brothers and sisters” to acquire the rights to revenues from some of the country’s mines, citing the Metalkol project, which is majority-owned by ENRC parent Eurasian Resources Group, as a “test case”.

Mr Gertler said he had acquired a royalty stream from the project from Gécamines in 2017 for $83m, and that parts of that royalty — worth 2.5 per cent of revenue — would be available to Congolese citizens in a scheme to launch before the end of the year.

Transparency campaigners dismissed Mr Gertler’s move as an effort to distract from the latest of his deals to come to light.

“What Gertler is actually revealing here is that he secretly bought yet another state asset through yet another shell company,” said Elisabeth Caesens, director of advocacy group Resource Matters. “What’s new, though, is that he’s now trying to convince the Congolese that this is good news for them.”

Under a 2011 government decree, any deal involving Congo’s natural resources must be published by the relevant ministry within 60 days of execution. But nothing was publicly disclosed regarding the Metalkol transaction until October, when the Congolese arm of the anti-corruption group Extractive Industries Transparency Initiative published a contract detailing the sale of the rights to Multree, a company registered in the British Virgin Islands. Willy Kitobo Samsoni, Congo’s mines minister, said he had no information on the matter and declined to comment further.

The US sanctions prohibit Mr Gertler from dealing in US dollars or with any American entity. Glencore has said it continues to pay Mr Gertler in euros for royalties he retained after selling his stake in two Glencore mining projects in 2017.

Mr Gertler said he had not yet received royalties from Metalkol, which is still increasing production, but that he expected them to accrue from 2021.

ERG and Gécamines did not immediately respond to requests for comment on the sale of Gécamines’s royalty from the project to Mr Gertler.

ERG’s Metalkol will produce 14,700 tonnes of cobalt this year, according to estimates from Darton Commodities, out of a global market of 130,000 tonnes. The company said it will also produce 77,000 tonnes a year of copper during the first phase of the project, worth $550m at current prices.

Over the past few years ERG has tried to market cobalt from the Metalkol project to big electric carmakers, but it is not clear if any contracts have been signed. The company is a member of the World Economic Forum’s Global Battery Alliance, a group that aims to build a “sustainable battery value chain.”

The Metalkol project, also known as Kolwezi Tailings, was previously owned by Canada’s First Quantum Minerals. First Quantum was stripped of the licence in 2009 by the Congolese government and the mine was transferred to Mr Gertler, who later sold the project to ENRC.

Mr Kabila stepped down in 2018 after a rigged election that allowed the former leader’s political coalition to retain substantial influence in government through its control of parliament. Mr Gertler, facing increased pressure from Congolese and international civil society groups, had become a much less visible figure until this address.




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