The government of Democratic Republic of Congo is seeking to review of some mining contracts with foreign companies.
The country’s President Félix Tshisekedi made the announcement and said that this follows warnings that the that the country will potentially lose at least US $3.7 billion in skewed mining and oil deals with controversial Israeli billionaire Dan Gertler.
Congo is the world’s largest source of cobalt and Africa’s biggest copper producer. Mr Gertler’s companies own royalty streams from three of the world’s biggest cobalt projects run by Glencore Plc and Eurasian Resources Group Sarl, which could soon produce more than 70,000 tonnes of cobalt a year – about half of total global output in 2019. They are also significant copper producers.
Mr Gertler’s companies took over the royalties from state-owned miner Gecamines in a series of transactions over a decade, some of which are being scrutinised by activists and foreign regulators from the US, UK and Switzerland.
Incurred loss
According to a coalition of Congolese and international organisations, which has urged the government to review the deals, Kinshasa has already lost out on nearly US $2 billion in revenue by selling mining and oil assets to Mr Gertler. Companies owned by Mr Gertler, who is under US sanctions for alleged corruption in Congo, stand to gain US $1.76 billion in the next 20 years from copper and cobalt projects in the country, said the lobby, Congo Is Not For Sale.
“The coalition calls on Congolese authorities to end their silence on this matter and take urgent measures to ensure that Congo’s mineral wealth benefits the DRC Treasury and its people,” said the group in a report.
According to a financial investigation by the group, DRC lost US $1.95 billion in revenues between 2003 and 2021. A further US $1.76 billion in future royalty payments to Gertler’s companies will have been paid by 2039.
The lobby’s report builds on calculations published in 2013 by former UN Secretary-General the late Kofi Annan-led Africa Progress Panel, which alleged that Congo lost out on $1.36 billion through the under-pricing of mining assets bought by companies linked to Mr Gertler.
Mr Gertler through his spokesman denied the deals for the royalties were mis-priced and, in reference to his most recent royalty transaction in 2017 involving a tailings project, said the valuation was done “in line with industry standards.”